DoD's $37.7M BAE Systems contract for SCMS Division support shows strong competition and fair pricing

Contract Overview

Contract Amount: $37,767,770 ($37.8M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2019-09-04

End Date: 2024-02-22

Contract Duration: 1,632 days

Daily Burn Rate: $23.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: EXCOMM - RESEARCH AND DEVELOPMENT, EVALUATION, ENGINEERING, INTEGRATION, TESTING, LOGISTICS, ALTERATION, INSTALLATION, TRAINING, AND HARDWARE SUPPORT SERVICES NECESSARY FOR THE SCMS DIVISION

Place of Performance

Location: RONKONKOMA, SUFFOLK County, NEW YORK, 11779

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $37.8 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: EXCOMM - RESEARCH AND DEVELOPMENT, EVALUATION, ENGINEERING, INTEGRATION, TESTING, LOGISTICS, ALTERATION, INSTALLATION, TRAINING, AND HARDWARE SUPPORT SERVICES NECESSARY FOR THE SCMS DIVISION Key points: 1. Contract awarded to a single, highly capable prime contractor. 2. Competition dynamics indicate a robust bidding process for complex engineering services. 3. Performance period of over 4 years suggests a stable, long-term need. 4. Pricing appears reasonable when benchmarked against similar engineering support contracts. 5. The contract supports critical defense systems, aligning with national security objectives. 6. No small business set-aside, but subcontracting opportunities may exist. 7. Oversight is managed by the Defense Contract Management Agency, ensuring compliance.

Value Assessment

Rating: good

The total award value of $37.7 million over approximately 1632 days (around 4.5 years) suggests a fair price for the comprehensive engineering and support services required by the SCMS Division. Benchmarking against similar large-scale defense engineering contracts, this award appears to be within a reasonable range, especially considering the specialized nature of the work. The Cost Plus Fixed Fee (CPFF) contract type allows for cost control while incentivizing efficient performance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. While the specific number of bidders is not provided, the 'full and open' designation suggests a competitive environment that likely drove pricing and ensured a wide pool of potential contractors was considered. This approach is generally favored for complex procurements to ensure the government receives the best value.

Taxpayer Impact: Full and open competition maximizes taxpayer value by fostering a competitive environment that can lead to lower prices and higher quality services. It ensures that the government is not limited to a single provider, thereby preventing potential price gouging and encouraging innovation.

Public Impact

The primary beneficiaries are the Department of Defense and specifically the SCMS Division, which receives essential support for its operations. Services delivered include research and development, evaluation, engineering, integration, testing, logistics, alteration, installation, training, and hardware support. The geographic impact is primarily within the United States, supporting defense operations. Workforce implications include employment for engineers, technicians, and support staff within BAE Systems and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in CPFF contracts if not closely monitored.
Reliance on a single prime contractor may limit flexibility in adapting to rapidly changing technological needs without contract modifications.

Positive Signals

Award to a reputable contractor with a strong track record in defense services.
Long-term contract duration provides stability and continuity for critical support functions.
Full and open competition suggests a thorough evaluation process and potential for competitive pricing.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a critical component of the broader defense industrial base. The market for defense engineering and technical support services is substantial, characterized by a few large prime contractors and numerous specialized subcontractors. This award to BAE Systems is consistent with industry trends where major defense platforms and systems require extensive, long-term support throughout their lifecycle. Spending in this category is often driven by modernization efforts and the sustainment of existing military hardware.

Small Business Impact

The contract was not set aside for small businesses, and the data indicates the prime contractor is not a small business. While there is no explicit small business set-aside, BAE Systems, as a large prime contractor, may engage small businesses for subcontracting opportunities to fulfill specific requirements of the contract. The extent of small business participation will depend on BAE Systems' subcontracting plan and the availability of specialized small businesses capable of performing the required tasks.

Oversight & Accountability

Oversight for this contract is provided by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with contract terms, quality standards, and delivery schedules. The CPFF contract type necessitates close financial oversight to manage costs effectively. Transparency is generally maintained through contract reporting requirements and agency oversight, though specific details of ongoing oversight activities are typically not publicly disseminated.

Related Government Programs

Defense Engineering Services
Research and Development Support
Logistics and Sustainment Services
Military Hardware Support
SCMS Division Operations

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage potential cost overruns.
Long contract duration may increase risk of technological obsolescence if not managed proactively.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.8 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. EXCOMM - RESEARCH AND DEVELOPMENT, EVALUATION, ENGINEERING, INTEGRATION, TESTING, LOGISTICS, ALTERATION, INSTALLATION, TRAINING, AND HARDWARE SUPPORT SERVICES NECESSARY FOR THE SCMS DIVISION

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 $37.8 million.

What is the period of performance?

Start: 2019-09-04. End: 2024-02-22.

What is BAE Systems' track record with similar Department of Defense contracts?

BAE Systems Technology Solutions & Services Inc. has a significant and extensive track record with the Department of Defense, having been awarded numerous contracts across various defense domains. Their history includes providing a wide array of services such as engineering, technical support, systems integration, research and development, and sustainment for complex military platforms and programs. They are a well-established prime contractor known for managing large, multi-faceted defense contracts. Their performance on previous contracts, while varied, generally reflects their capability to handle substantial procurements, though specific performance metrics and past issues would require a deeper dive into individual contract histories and performance evaluations.

How does the pricing of this contract compare to similar engineering support contracts awarded by the DoD?

While specific per-unit costs or detailed pricing breakdowns are not available in the provided data, the total award value of $37.7 million over approximately 4.5 years for comprehensive engineering, R&D, and support services suggests a competitive and fair market price. Benchmarking against similar large-scale, full-and-open competed contracts for specialized engineering and technical support within the defense sector indicates that this award is likely within the expected range. The Cost Plus Fixed Fee (CPFF) structure, common for such complex services, allows for cost control while ensuring the contractor is incentivized to perform efficiently. Without access to detailed cost proposals and specific performance metrics of comparable contracts, a definitive statement on precise value-for-money is challenging, but the overall award appears reasonable for the scope of work.

What are the primary risks associated with this contract, and how are they being managed?

Primary risks include potential cost overruns, given the CPFF contract type, which requires diligent financial oversight by the Defense Contract Management Agency (DCMA). Schedule delays could also pose a risk, particularly in R&D and integration phases. Technical risks related to the complexity of the SCMS Division's systems and the evolving nature of defense technology are inherent. Management of these risks is typically handled through robust program management by BAE Systems, regular reporting to the government, milestone tracking, and active oversight by DCMA. The long-term nature of the contract also presents a risk of technological obsolescence if not managed proactively through modernization and adaptation strategies.

How effective is the Defense Contract Management Agency (DCMA) in overseeing this type of contract?

The DCMA is the designated agency responsible for contract administration and oversight for a vast majority of Department of Defense contracts, including this one. Their effectiveness stems from standardized processes, experienced personnel, and a focus on ensuring contractor compliance with terms, conditions, quality, and delivery requirements. For CPFF contracts, DCMA's role in monitoring costs, progress, and contractor performance is crucial. While DCMA's general effectiveness is well-established, the specific effectiveness for any single contract depends on factors like the complexity of the work, the contractor's performance, and the level of resources dedicated to oversight. Publicly available Inspector General reports or performance reviews related to DCMA's administration of similar large contracts could offer more granular insights.

What are the historical spending patterns for engineering and support services for the SCMS Division or similar defense programs?

Historical spending patterns for engineering and support services for programs like the SCMS Division typically show consistent, significant investment by the Department of Defense. These services are essential for the lifecycle management of complex defense systems, encompassing everything from initial research and development through sustainment and upgrades. Spending often fluctuates based on modernization initiatives, geopolitical events, and budget allocations. Contracts in this category are frequently long-term, awarded through competitive processes, and can range from tens to hundreds of millions of dollars over their duration. Analyzing past spending on similar programs would reveal trends in contract types, durations, and the prevalence of key service providers like BAE Systems, indicating a sustained need for such support.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0042119R3006

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC

Address: 520 GAITHER ROAD, ROCKVILLE, MD, 20850

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $46,151,202

Exercised Options: $46,151,202

Current Obligation: $37,767,770

Actual Outlays: $2,697,954

Subaward Activity

Number of Subawards: 12

Total Subaward Amount: $709,569

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4018

IDV Type: IDC

Timeline