DoD's $175.6M TRIDENT SWS Systems contract awarded to BAE Systems, a sole-source, cost-plus-fixed-fee agreement

Contract Overview

Contract Amount: $175,558,438 ($175.6M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2013-10-01

End Date: 2016-09-30

Contract Duration: 1,095 days

Daily Burn Rate: $160.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SP2012 UK TRIDENT SWS SYSTEMS

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $175.6 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: SP2012 UK TRIDENT SWS SYSTEMS Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Cost-plus-fixed-fee structure may incentivize cost increases. 3. Long duration of 1095 days suggests a significant, ongoing need. 4. Awarded by the Defense Contract Management Agency, indicating a focus on defense-related services. 5. Engineering services (NAICS 541330) are critical for complex defense systems. 6. No small business set-aside indicates potential for large prime contractor focus.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and specific defense application. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex R&D or services where costs are uncertain, can lead to higher overall expenditures compared to fixed-price contracts. Without comparable sole-source contracts for similar TRIDENT SWS systems, assessing whether the $175.6 million represents a fair price is difficult. The contract's duration and the nature of engineering services suggest a high degree of specialized expertise required, which can command premium pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The lack of competition means that price discovery through market forces was absent, potentially leading to higher costs for the government than if multiple bids had been solicited.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Sole-source awards reduce the government's leverage to negotiate the lowest possible price.

Public Impact

The primary beneficiaries are the U.S. Navy's strategic weapons systems, ensuring continued support and development. Services delivered include critical engineering and technical support for the TRIDENT Submarine Warfare Systems. Geographic impact is likely concentrated around naval bases and defense contractor facilities, primarily in Maryland (ST MD). Workforce implications involve highly skilled engineers and technical specialists employed by BAE Systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost-plus-fixed-fee contract type can incentivize higher costs.
Lack of transparency in sole-source justification requires careful review.
Long contract duration may mask potential inefficiencies over time.

Positive Signals

BAE Systems is a major defense contractor with established expertise in complex systems.
Engineering services are essential for maintaining and upgrading sophisticated defense platforms.
Contract awarded by a specialized defense agency suggests alignment with critical national security needs.

Sector Analysis

This contract falls within the Defense Engineering Services sector, a critical component of the broader aerospace and defense industry. The market for specialized defense engineering is characterized by high barriers to entry, significant R&D investment, and long-term relationships between contractors and government agencies. Spending in this sector is driven by national security priorities and the need to maintain technological superiority. Comparable spending benchmarks are difficult to establish due to the unique nature of TRIDENT systems and the sole-source award.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. This suggests that the prime contractor, BAE Systems, is expected to perform the majority of the work. The absence of small business participation in this specific award means no direct benefit to the small business ecosystem through this contract, though BAE Systems may engage small businesses in its broader supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are inherent in the contract terms, particularly the fixed-fee component, which ties a portion of the contractor's profit to performance. Transparency is limited due to the sole-source nature, but contract awards are generally reported in federal databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

TRIDENT II (D5) Submarine Program
Strategic Weapons Systems
Naval Sea Systems Command (NAVSEA) Contracts
Defense Engineering Services
Missile Defense Systems

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Lack of competition
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $175.6 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. SP2012 UK TRIDENT SWS SYSTEMS

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $175.6 million.

What is the period of performance?

Start: 2013-10-01. End: 2016-09-30.

What is the specific nature of the TRIDENT SWS Systems engineering services provided by BAE Systems under this contract?

The contract data indicates 'Engineering Services' (NAICS 541330) for 'SP2012 UK TRIDENT SWS SYSTEMS'. While specific details are not provided, TRIDENT Submarine Warfare Systems (SWS) are integral to the UK's strategic nuclear deterrent. Therefore, the engineering services likely encompass a broad range of activities including design, development, integration, testing, maintenance, and lifecycle support for the complex electronic and combat systems aboard TRIDENT submarines. This could involve software engineering, hardware engineering, systems integration, cybersecurity, and technical documentation, all crucial for ensuring the operational readiness and effectiveness of these critical national security assets.

How does the cost-plus-fixed-fee (CPFF) contract type compare to other pricing structures in terms of potential cost to the government for similar defense engineering services?

Cost-plus-fixed-fee (CPFF) contracts are often used when the scope of work is not well-defined or involves significant uncertainty, such as research and development or complex system integration. The government agrees to pay the contractor's actual allowable costs plus a predetermined fixed fee representing profit. Compared to fixed-price contracts, CPFF offers less cost certainty for the government, as the final price can exceed initial estimates if costs escalate. However, it can be advantageous when innovation or flexibility is paramount and risks are high. For well-defined engineering services, fixed-price contracts generally offer better cost control for the government. The CPFF structure here suggests a high degree of technical uncertainty or a need for flexibility in the TRIDENT SWS systems support.

What are the implications of a sole-source award for taxpayer value and accountability in defense contracting?

Sole-source awards, like the one to BAE Systems for TRIDENT SWS Systems, bypass the competitive bidding process. This inherently limits the government's ability to leverage market forces to achieve the lowest possible price, potentially resulting in higher costs for taxpayers. Accountability is primarily maintained through contract oversight, performance metrics, and audits. However, without the pressure of competing bids, the incentive for the contractor to aggressively control costs and maximize efficiency might be reduced. Transparency is also diminished, making it harder for the public and oversight bodies to independently assess the fairness of the pricing and the value received. Justification for sole-source awards must be robust to ensure they are truly necessary and in the government's best interest.

What is BAE Systems' track record with the TRIDENT program and similar large-scale defense engineering contracts?

BAE Systems is a major global defense contractor with extensive experience supporting complex naval and strategic systems. They have a long-standing relationship with the UK Ministry of Defence and the US Department of Defense, including significant involvement in the TRIDENT program. BAE Systems is known to be a key industrial partner for the UK's TRIDENT Strategic Weapons System, providing support and maintenance. Their track record includes managing large, technologically advanced projects, often under complex contractual arrangements. While specific performance metrics for this particular $175.6 million contract are not detailed here, BAE Systems' overall profile suggests they possess the necessary capabilities and experience for such critical defense engineering work.

How does the $175.6 million contract value compare to historical spending on TRIDENT SWS systems or similar defense engineering efforts?

Comparing the $175.6 million contract value requires context regarding the specific services rendered and the contract duration (1095 days, or 3 years). This equates to an average annual value of approximately $58.5 million. Historical spending on TRIDENT SWS systems is substantial, given the program's strategic importance and long lifecycle. However, without knowing the exact scope of work (e.g., sustainment, upgrades, specific system support), direct comparisons are difficult. Generally, major defense engineering contracts for strategic platforms can range from tens of millions to billions of dollars over their lifespan. This $175.6 million award appears to be a significant, but not unprecedented, investment for specialized engineering support over a multi-year period for a critical defense system.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0003014R0009

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 520 GAITHER ROAD, ROCKVILLE, MD, 20850

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $177,367,345

Exercised Options: $176,604,520

Current Obligation: $175,558,438

Subaward Activity

Number of Subawards: 28

Total Subaward Amount: $5,146,068

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline