DoD awards BAE Systems $135.5M for engineering services, with a potential end date in late 2033

Contract Overview

Contract Amount: $135,493,905 ($135.5M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2019-10-03

End Date: 2033-11-30

Contract Duration: 5,172 days

Daily Burn Rate: $26.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ENGINEERING LABOR - SCN

Place of Performance

Location: SAINT INIGOES, SAINT MARYS County, MARYLAND, 20684

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $135.5 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: ENGINEERING LABOR - SCN Key points: 1. Contract value suggests a long-term need for specialized engineering expertise. 2. The definitive contract structure implies a stable, ongoing relationship. 3. Cost-plus-fixed-fee pricing may incentivize cost management by the contractor. 4. The award to a single entity indicates a focus on specific capabilities. 5. Performance is located in Maryland, suggesting a concentration of federal engineering work in the region. 6. The contract duration spans over a decade, indicating significant project scope.

Value Assessment

Rating: good

The contract's value of $135.5 million over its potential lifespan appears reasonable for extensive engineering services. Benchmarking against similar long-term, large-scale engineering support contracts within the Department of Defense is necessary for a definitive value assessment. The cost-plus-fixed-fee structure, while common for complex projects, requires careful monitoring to ensure costs remain within acceptable parameters and that the fixed fee provides adequate incentive for efficient performance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple qualified vendors had the opportunity to bid. The fact that BAE Systems was selected indicates they offered the best value proposition among the competitors. The level of competition, while not explicitly detailed by the number of bidders, is generally positive for price discovery and ensuring the government receives competitive pricing.

Taxpayer Impact: Full and open competition typically leads to better pricing for taxpayers by fostering a competitive environment among potential contractors.

Public Impact

The Department of the Navy benefits from continuous access to specialized engineering labor. Services delivered likely support the design, development, and maintenance of naval systems and infrastructure. The geographic impact is concentrated in Maryland, potentially supporting local engineering talent and businesses. Workforce implications include the direct employment of engineers and technical staff by BAE Systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in cost-plus-fixed-fee contracts if not rigorously managed.
Long contract duration could lead to scope creep or evolving requirements that are not adequately addressed.
Dependence on a single contractor for critical engineering services may reduce flexibility.

Positive Signals

Awarded through full and open competition, suggesting a competitive selection process.
BAE Systems is a large, established defense contractor with a track record in engineering services.
The contract's long duration indicates a strategic commitment to meeting ongoing engineering needs.

Sector Analysis

This contract falls within the broader engineering services sector, a critical component of the defense industrial base. The market for defense engineering services is substantial, driven by the continuous need for modernization, maintenance, and development of complex military systems. BAE Systems operates within a competitive landscape of large aerospace and defense firms vying for these lucrative, long-term contracts. Spending in this category is often benchmarked against historical contract values for similar services and the overall defense budget allocation.

Small Business Impact

The contract does not indicate a small business set-aside, and the prime contractor, BAE Systems, is a large business. There is no explicit information on subcontracting plans for small businesses within this award. The impact on the small business ecosystem would depend on whether BAE Systems actively seeks small business subcontractors for specialized support, which is not detailed here.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program management office within the Department of the Navy. Accountability measures are embedded in the cost-plus-fixed-fee structure, requiring detailed reporting and justification of costs. Transparency is facilitated through contract award databases, though specific performance metrics and detailed cost breakdowns may be less publicly accessible.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Engineering Support Contracts
Department of Defense Engineering and Technical Services
Aerospace and Defense Engineering Services
Cost-Plus-Fixed-Fee Contracts in Defense

Risk Flags

Cost-plus-fixed-fee pricing requires diligent oversight to prevent cost overruns.
Long contract duration increases the risk of scope creep and evolving requirements.
Dependence on a single large contractor may limit future flexibility.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $135.5 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. ENGINEERING LABOR - SCN

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 $135.5 million.

What is the period of performance?

Start: 2019-10-03. End: 2033-11-30.

What is BAE Systems' track record with similar engineering services contracts for the Department of Defense?

BAE Systems has a substantial and long-standing track record of providing a wide array of engineering, technical, and support services to the Department of Defense and its various branches, including the Navy. They are a major defense contractor with extensive experience in areas such as systems engineering, integration, testing, and lifecycle support for complex platforms. Their history includes numerous large-scale, multi-year contracts similar in scope and nature to this award. Analyzing their past performance on cost-plus-fixed-fee contracts specifically would provide further insight into their ability to manage costs and deliver effectively within such structures. Publicly available contract databases and performance reviews (if accessible) would offer more granular detail on their historical success rates and any past issues encountered.

How does the awarded amount compare to similar engineering support contracts awarded by the Department of the Navy?

The awarded amount of $135.5 million for engineering labor services over a potential 10-year period represents a significant investment. To benchmark this value, one would compare it to other definitive contracts awarded by the Department of the Navy or other DoD components for comparable engineering services, particularly those involving long-term support and specialized labor. Factors such as the specific type of engineering (e.g., naval architecture, systems engineering, software engineering), the duration of the contract, and the level of competition would be crucial for a fair comparison. Without access to a comprehensive database of all similar contracts and their specific terms, a precise comparison is difficult, but this value falls within the range of substantial, long-term support contracts common in the defense sector.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude and duration?

The primary risks associated with a CPFF contract of this magnitude and duration include potential cost overruns and contractor inefficiency. While the fixed fee provides the contractor with an incentive to control costs, the 'cost-plus' nature means the government ultimately bears the direct costs of performance. If the contractor's cost estimation is inaccurate or if unforeseen technical challenges arise, costs can escalate beyond initial projections. Furthermore, if the fixed fee is perceived as too high relative to the effort, the contractor may have less incentive to aggressively pursue efficiencies. For the government, rigorous oversight, detailed cost auditing, and clear performance metrics are essential to mitigate these risks and ensure value for money. The long duration also increases the risk of scope creep or the need for contract modifications.

What is the expected impact of this contract on the specific engineering services market in Maryland?

This contract is likely to have a positive impact on the engineering services market in Maryland, given its substantial value and the specified performance location. It signifies a significant demand for specialized engineering labor within the state, potentially leading to job creation and increased business opportunities for BAE Systems and its subcontractors. The concentration of federal engineering work in Maryland could be further bolstered by this award, attracting and retaining skilled engineering talent in the region. It also reinforces Maryland's position as a hub for defense-related contracting and technical services, potentially stimulating further investment and competition within the local market.

How does the 'definitive contract' type influence the predictability of spending and project scope?

A 'definitive contract' is a contract that has a specified price, quantity, and delivery schedule, or a formula for determining these. In this context, it implies that the core terms of the contract, including the overall value and duration, are established. This provides a degree of predictability for both the government and the contractor regarding spending and project scope over the contract's life. Unlike indefinite-delivery/indefinite-quantity (IDIQ) contracts, which allow for more flexibility but less upfront certainty, a definitive contract suggests a more concrete plan for the services required. However, the 'cost-plus-fixed-fee' pricing structure within this definitive contract means that while the fee is fixed, the total cost to the government can vary based on actual allowable costs incurred by the contractor, introducing some variability in the final expenditure.

Industry Classification

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

Product/Service Code: INSTALLATION OF EQUIPMENT › INSTALLATION OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0042118R0013

Offers Received: 1

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

Financial Breakdown

Contract Ceiling: $212,854,566

Exercised Options: $202,725,276

Current Obligation: $135,493,905

Subaward Activity

Number of Subawards: 155

Total Subaward Amount: $25,615,398

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline