DoD awards $69.1M contract for Combat System Support Services to BAE Systems, with 3 bidders

Contract Overview

Contract Amount: $69,154,697 ($69.2M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2023-01-08

End Date: 2027-01-07

Contract Duration: 1,460 days

Daily Burn Rate: $47.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: COMBAT SYSTEM SUPPORT SERVICES SCSC, WALLOPS ISLAND, VA

Place of Performance

Location: WALLOPS ISLAND, ACCOMACK County, VIRGINIA, 23337

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $69.2 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: COMBAT SYSTEM SUPPORT SERVICES SCSC, WALLOPS ISLAND, VA Key points: 1. Contract value of $69.1M over 4 years suggests a significant investment in specialized engineering support. 2. Full and open competition indicates a potentially competitive bidding environment, which can drive better pricing. 3. The contract's duration of 1460 days allows for sustained support but also carries long-term financial commitment. 4. Engineering services are critical for maintaining complex defense systems, impacting operational readiness. 5. The award to BAE Systems, a major defense contractor, places this contract within a known industry player. 6. The Cost Plus Fixed Fee (CPFF) pricing structure can lead to cost overruns if not carefully managed. 7. The contract is a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: good

The contract value of $69.1M over approximately four years averages to about $17.3M annually. Benchmarking this against similar large-scale engineering support contracts for naval combat systems is difficult without more specific service details. However, the presence of multiple bidders in a full and open competition suggests that pricing was likely scrutinized. The CPFF structure, while common for complex services, requires diligent oversight to ensure value for money and prevent uncontrolled cost growth.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. With three bidders participating, the competition level appears moderate. This suggests that while there was some level of market interest, it may not represent the full breadth of potential providers, which could influence price discovery and potentially limit the most competitive offers.

Taxpayer Impact: A competitive bidding process generally benefits taxpayers by encouraging lower prices and better service offerings. The moderate number of bidders in this instance suggests a reasonable, though not exhaustive, level of competition, likely leading to a fair market price.

Public Impact

The primary beneficiaries are the Department of the Navy, receiving essential support for its combat systems. Services delivered include engineering support crucial for the maintenance, upgrade, and operational readiness of naval combat systems. The contract is geographically focused on Wallops Island, Virginia, impacting the local workforce and economy there. The contract supports specialized engineering roles, potentially creating or sustaining high-skilled jobs within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contracts can incentivize contractors to increase costs to maximize profit if not managed tightly.
The duration of the contract (4 years) represents a significant, long-term financial commitment for the government.
Limited competition (3 bidders) might mean less aggressive pricing than a more crowded field.
The specific nature of 'Combat System Support Services' can be broad, requiring clear performance metrics to ensure effective service delivery.

Positive Signals

Awarded under full and open competition, indicating a broad solicitation and potential for competitive pricing.
The contract is with BAE Systems, a well-established defense contractor with a track record in similar services.
The contract duration allows for sustained support, potentially leading to greater efficiency and system knowledge.
The delivery order structure suggests it aligns with a broader strategic procurement vehicle, potentially offering efficiencies.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a critical component of the broader defense industrial base. The defense engineering services market is substantial, driven by the continuous need to maintain, upgrade, and develop complex military platforms. Spending in this area is often characterized by long-term contracts, specialized expertise, and significant government oversight. Comparable spending benchmarks would typically involve other large-scale support contracts for naval vessels or other defense systems.

Small Business Impact

This contract does not appear to have a small business set-aside (ss=false, sb=false). While BAE Systems is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on BAE Systems' procurement practices and the specific requirements of the combat system support services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a Cost Plus Fixed Fee contract, rigorous financial oversight is essential to monitor costs and ensure they align with the fixed fee and the contract's objectives. Transparency is typically managed through contract reporting requirements and performance reviews. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Combat Systems Modernization Programs
Defense Engineering and Technical Services
Department of the Navy Ship Maintenance Contracts
BAE Systems Defense Contracts

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage potential cost overruns.
Moderate competition level (3 bidders) may limit optimal price discovery.
Long contract duration (4 years) represents a significant long-term financial commitment.
Specificity of 'Combat System Support Services' requires clear performance metrics to ensure value.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $69.2 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. COMBAT SYSTEM SUPPORT SERVICES SCSC, WALLOPS ISLAND, VA

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 $69.2 million.

What is the period of performance?

Start: 2023-01-08. End: 2027-01-07.

What is the historical spending pattern for Combat System Support Services at Wallops Island?

Analyzing historical spending for 'Combat System Support Services' specifically at Wallops Island requires access to detailed contract databases and search functionalities beyond the provided data. However, the current award of $69.1M over four years suggests a significant and ongoing need for these services. Typically, such contracts are awarded periodically, reflecting the lifecycle of defense systems. Past awards might have been with the same or different contractors, potentially under different contract types or competition levels. Understanding historical spending would involve tracking awards for similar services to this location or for similar combat systems to identify trends in contract value, duration, and contractor selection.

How does the pricing of this contract compare to similar engineering support contracts for naval systems?

Directly comparing the pricing of this $69.1M contract to similar naval engineering support contracts is challenging without specific details on the scope of work, labor categories, overhead rates, and profit margins. The Cost Plus Fixed Fee (CPFF) structure means the government pays allowable costs plus a negotiated fixed fee. Benchmarking would involve analyzing the fixed fee percentage relative to total costs and comparing the estimated total cost against similar contracts. Factors like the complexity of the combat systems, the security requirements, and the geographic location can significantly influence pricing. The fact that it was competed suggests the pricing was vetted against market expectations, but a detailed cost analysis by the government would be the primary method for ensuring value.

What are the key performance indicators (KPIs) for this contract, and how is performance measured?

The provided data does not specify the Key Performance Indicators (KPIs) for this 'Combat System Support Services' contract. However, for such a contract, typical KPIs would likely revolve around system availability, response times for support requests, successful implementation of upgrades or modifications, adherence to maintenance schedules, and quality of engineering documentation. Performance measurement would involve regular reviews by the contracting officer's representative (COR), technical assessments of delivered work, and potentially contractor self-reporting against defined metrics. Failure to meet KPIs could result in penalties, reduced fees, or contract termination, depending on the contract's terms and conditions.

What is BAE Systems' track record with similar DoD contracts, particularly in combat system support?

BAE Systems is a major defense contractor with extensive experience in providing a wide range of services to the Department of Defense, including combat system support. They have a significant history of developing, integrating, and maintaining complex defense systems for various branches of the military. Their track record typically includes large-scale contracts for naval platforms, electronic warfare systems, and weapon systems. While specific performance details for past contracts are not provided here, BAE Systems generally operates within the established defense industrial base and is accustomed to the rigorous oversight and performance expectations associated with DoD procurements. Their past performance is a key factor considered during the source selection process for new contracts.

What are the potential risks associated with a Cost Plus Fixed Fee (CPFF) contract for engineering services?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost growth. While the fee is fixed, the government bears the risk of increased costs incurred by the contractor in performing the work. If the contractor's costs escalate due to inefficiencies, unforeseen technical challenges, or scope creep not properly managed, the total contract value (costs + fee) can significantly exceed initial estimates. This necessitates robust government oversight to monitor expenditures, validate costs, and ensure the contractor is managing resources efficiently. Another risk is that the contractor may have less incentive to control costs compared to fixed-price contracts, as their profit (the fee) is guaranteed regardless of cost efficiency, although they are incentivized to complete the work within the scope to earn that fee.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0017821R3029

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corporation

Address: 520 GAITHER RD, 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: $142,909,196

Exercised Options: $113,205,404

Current Obligation: $69,154,697

Subaward Activity

Number of Subawards: 58

Total Subaward Amount: $14,751,991

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D7224

IDV Type: IDC

Timeline