DoD's $167M Engineering Services Contract with BAE Systems: A Long-Term Award

Contract Overview

Contract Amount: $167,207,428 ($167.2M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2001-06-25

End Date: 2013-03-31

Contract Duration: 4,297 days

Daily Burn Rate: $38.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Place of Performance

Location: SAINT INIGOES, ST. MARY'S County, MARYLAND, 20684

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $167.2 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: Key points: 1. The contract awarded to BAE Systems Technology Solutions & Services Inc. for engineering services represents a significant, long-term commitment by the Department of the Navy. 2. With a duration of over 11 years, this contract highlights a sustained need for specialized engineering support within the defense sector. 3. The 'Cost Plus Fixed Fee' pricing structure suggests potential for cost overruns, though the fixed fee component aims to control contractor profit. 4. The absence of small business participation indicates a focus on large, established prime contractors for this specific requirement.

Value Assessment

Rating: fair

The contract's value of $167 million over more than 11 years averages to approximately $15 million annually. This figure needs to be benchmarked against similar long-term, complex engineering service contracts awarded by the DoD to assess its relative value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the long duration and specialized nature of the services may have limited the number of viable bidders, potentially impacting the ultimate price discovery.

Taxpayer Impact: While competition was intended, the extended period of performance and cost-plus structure warrant scrutiny to ensure taxpayer funds are used efficiently and effectively over the contract's life.

Public Impact

Long-term defense contracts can impact the availability of resources for other critical defense needs. Sustained spending on engineering services supports jobs and technological development within the defense industrial base. The 'Cost Plus Fixed Fee' model requires careful monitoring to prevent scope creep and ensure cost control. The lack of small business involvement may limit opportunities for innovative smaller firms in this sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 11 years)
Cost-plus pricing structure
No small business participation

Positive Signals

Full and open competition awarded
Established contractor with significant experience

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the defense industry. Spending in this area is often driven by complex system development, maintenance, and modernization efforts. Benchmarks for similar long-term engineering contracts are essential for evaluating cost-effectiveness.

Small Business Impact

The contract explicitly states no small business participation (sb: false). This suggests that the requirement was likely fulfilled by a large prime contractor, potentially limiting opportunities for smaller, specialized firms to contribute to this specific defense need.

Oversight & Accountability

The long duration of this contract necessitates robust oversight from the Department of the Navy to ensure performance standards are met, costs remain controlled, and the contract continues to align with evolving defense requirements. Regular reviews and audits are crucial for accountability.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Long contract duration may reduce flexibility
Cost-plus structure can lead to cost overruns
Lack of small business participation limits diversity
Potential for contractor lock-in over time

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $167.2 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. See the official description on USAspending.

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 $167.2 million.

What is the period of performance?

Start: 2001-06-25. End: 2013-03-31.

What specific engineering services were provided under this contract, and how did they contribute to the Department of the Navy's mission objectives?

The contract data indicates 'Engineering Services' (NA: 541330) were procured by the Department of the Navy. These services likely encompassed a broad range of technical support, design, analysis, and integration activities essential for naval systems and platforms. The specific contributions would align with the Navy's operational and strategic goals, potentially including R&D support, system upgrades, or lifecycle management of key assets.

Given the 'Cost Plus Fixed Fee' structure and long duration, what mechanisms were in place to mitigate cost overruns and ensure value for taxpayers?

The 'Cost Plus Fixed Fee' (PT: COST PLUS FIXED FEE) structure inherently carries risk of cost escalation. Mitigation would rely on stringent contract management, including detailed cost tracking, performance metrics, and regular audits by the Department of Defense. The fixed fee component provides a ceiling on contractor profit, but effective oversight is paramount to prevent scope creep and ensure the final cost reflects the value delivered.

How did the 'full and open competition' process ensure the best possible pricing and technical solutions for the Department of the Navy over the contract's extended period?

Full and open competition theoretically allows any responsible source to submit an offer, fostering a competitive environment to drive down prices and encourage innovative solutions. However, for long-term, specialized contracts like this, the pool of qualified bidders might be limited. The effectiveness of the competition in securing optimal value depends on the clarity of the solicitation, the evaluation criteria, and the government's ability to negotiate favorable terms throughout the contract's lifecycle.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 1601 RESEARCH BLVD, ROCKVILLE, MD, 08

Business Categories: Category Business, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Contract Characteristics

Cost or Pricing Data: YES

Timeline