DoD's $353M BAE Systems Contract for SSBN Replacement CMC Lacks Competition

Contract Overview

Contract Amount: $353,067,700 ($353.1M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2016-10-01

End Date: 2021-09-30

Contract Duration: 1,825 days

Daily Burn Rate: $193.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: IGF::CT::IGF SP2012 SSBN REPLACEMENT CMC

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $353.1 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: IGF::CT::IGF SP2012 SSBN REPLACEMENT CMC Key points: 1. Significant contract value of $353M awarded to a single vendor. 2. Sole-source award raises concerns about potential price inflation and lack of market testing. 3. Engineering services sector often sees complex, specialized needs, but competition should still be explored. 4. Long contract duration of 5 years may not align with evolving technological requirements.

Value Assessment

Rating: questionable

The contract's Cost Plus Incentive Fee structure, combined with a sole-source award, makes it difficult to assess value. Without competitive bidding, it's hard to benchmark pricing against similar services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as market forces are not leveraged.

Taxpayer Impact: The lack of competition for a $353M contract means taxpayers may be paying a premium for these engineering services.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. Lack of transparency in the procurement process can erode public trust. Missed opportunity to foster innovation and efficiency through market competition.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Cost-plus contract type
Long contract duration

Positive Signals

Specific engineering services for critical defense asset (SSBN replacement)

Sector Analysis

This contract falls within the Engineering Services sector, specifically related to the complex and high-stakes area of submarine replacement. Spending in this specialized sector can be substantial, but competitive procurement is crucial for managing costs.

Small Business Impact

The data does not indicate any subcontracting to small businesses. Further analysis would be needed to determine if small businesses were considered or could have participated.

Oversight & Accountability

The sole-source nature of this large contract warrants scrutiny. Oversight should focus on ensuring the government is receiving fair value and that the contractor is meeting performance expectations.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Limited transparency
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $353.1 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. IGF::CT::IGF SP2012 SSBN REPLACEMENT CMC

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 (Department of the Navy).

What is the total obligated amount?

The obligated amount is $353.1 million.

What is the period of performance?

Start: 2016-10-01. End: 2021-09-30.

What specific justifications were provided for the sole-source award, and were alternative procurement methods considered?

Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For a contract of this magnitude and importance, the justification would need to be exceptionally strong, detailing why competition was not feasible. This could involve unique technical expertise, proprietary technology, or urgent, unforeseen needs. A thorough review of the justification documentation is essential to understand the rationale and assess its validity.

How does the Cost Plus Incentive Fee (CPIF) structure ensure cost control and performance for this sole-source contract?

A CPIF contract aims to incentivize the contractor to control costs and meet performance targets by sharing cost savings or overruns with the government. However, with a sole-source award, the baseline for 'target cost' is critical and potentially less rigorously defined than in a competitive scenario. Oversight must ensure the incentive targets are challenging yet achievable and that the government actively monitors performance and cost drivers to maximize the effectiveness of the fee structure.

What is the long-term strategy for ensuring continued innovation and cost-effectiveness in SSBN replacement engineering services beyond this contract?

Given the critical nature of the SSBN replacement program, a long-term strategy is vital. This should involve exploring future competitive opportunities, fostering industry partnerships for technological advancement, and establishing clear performance metrics and cost benchmarks. Regular market research and engagement with potential future vendors can help ensure that subsequent procurements benefit from competition and drive innovation, preventing vendor lock-in and ensuring sustained value for taxpayer investment.

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: N0003017Q0001

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corporation

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: $738,507,424

Exercised Options: $717,821,763

Current Obligation: $353,067,700

Actual Outlays: $24,140,852

Subaward Activity

Number of Subawards: 60

Total Subaward Amount: $19,090,923

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline