DoD's $41.5M Navy IT contract to BAE Systems for systems maintenance awarded via full and open competition

Contract Overview

Contract Amount: $41,484,587 ($41.5M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2015-11-23

End Date: 2018-12-31

Contract Duration: 1,134 days

Daily Burn Rate: $36.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF OPERATIONS AND MAINTENANCE OF NAVY COMMUNICATION, ELECTRONIC, AND COMPUTER SYSTEMS.

Place of Performance

Location: WAHIAWA, HONOLULU County, HAWAII, 96786

State: Hawaii Government Spending

Plain-Language Summary

Department of Defense obligated $41.5 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: IGF::OT::IGF OPERATIONS AND MAINTENANCE OF NAVY COMMUNICATION, ELECTRONIC, AND COMPUTER SYSTEMS. Key points: 1. Contract awarded to a single, large business prime contractor. 2. Services include IT, electronic, and computer systems maintenance. 3. Contract duration of over three years suggests a need for sustained support. 4. Fixed-price contract type may offer cost certainty for the government. 5. Awarded as a delivery order, indicating it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle. 6. Geographic focus on Hawaii for communication and computer systems.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without knowing the specific services and performance metrics. The fixed-price nature provides some cost control, but the total value of $41.5 million over three years for IT systems maintenance is substantial. Comparisons to similar contracts for Navy communication and electronic systems maintenance in the Pacific region would be necessary for a more precise value assessment. The number of bids (2) suggests some level of competition, but the ultimate value for money depends on the quality of service delivered and the pricing structure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. Two bids were received, which suggests a moderate level of competition. While more than one bidder is positive, a higher number of bids typically leads to more robust price discovery and potentially lower prices for the government. The specific details of the solicitation and evaluation criteria would further inform the assessment of competition effectiveness.

Taxpayer Impact: The full and open competition, despite receiving only two bids, aims to ensure that taxpayer funds are used efficiently by seeking the best value. The presence of multiple bidders, even if limited, provides a basis for negotiation and price comparison.

Public Impact

The Department of the Navy benefits from the continued operation and maintenance of its critical communication, electronic, and computer systems. Service members and civilian personnel in Hawaii are supported by reliable IT infrastructure. The contract ensures the functionality of essential command and control systems. Potential for indirect workforce support in Hawaii through BAE Systems' operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bids) may not have driven the lowest possible price.
Reliance on a single large business prime could limit subcontracting opportunities for smaller firms.
The fixed-price nature might incentivize cost-cutting that could impact service quality if not closely monitored.

Positive Signals

Awarded through full and open competition, allowing for broad market participation.
Fixed-price contract type offers budget predictability.
Sustained support over three years indicates a stable operational requirement.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computer systems design and related services. The market for IT maintenance and support for government agencies is significant, with numerous large and small businesses competing for these contracts. The Department of Defense represents a major client base within this sector, often requiring specialized support for complex and mission-critical systems. Benchmarking this contract's value against similar IT maintenance contracts for defense agencies would provide further context on its market positioning.

Small Business Impact

The contract was awarded to a large business prime contractor and does not indicate any specific small business set-aside provisions. There is no explicit information on subcontracting goals for small businesses. This suggests that opportunities for small businesses may be limited to those that can secure subcontracts directly from BAE Systems, rather than through direct set-aside awards.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Department of the Navy. Performance monitoring, quality assurance, and adherence to contract terms are key oversight functions. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Navy Information Technology Support Services
Defense Communication Systems Maintenance
Computer Systems Integration Services
IT Operations and Maintenance Contracts

Risk Flags

Limited Competition
Potential for Cost Overruns (if scope poorly defined)
Contractor Performance Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.5 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. IGF::OT::IGF OPERATIONS AND MAINTENANCE OF NAVY COMMUNICATION, ELECTRONIC, AND COMPUTER SYSTEMS.

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 $41.5 million.

What is the period of performance?

Start: 2015-11-23. End: 2018-12-31.

What is the track record of BAE Systems Technology Solutions & Services Inc. in performing similar IT systems maintenance contracts for the Department of Defense?

BAE Systems Technology Solutions & Services Inc. has a significant history of performing IT and technical support services for the Department of Defense. Their portfolio often includes complex systems integration, maintenance, and lifecycle support for various defense platforms and infrastructure. Analyzing their past performance on similar contracts, particularly those involving communication, electronic, and computer systems for the Navy, would reveal their ability to meet performance requirements, manage costs, and deliver quality services. Specific metrics such as past performance ratings, any contract disputes, or awards for exceptional service would provide a clearer picture of their reliability and capability in fulfilling this type of requirement.

How does the pricing structure of this $41.5 million contract compare to industry benchmarks for similar IT maintenance services?

Assessing the pricing structure requires a detailed breakdown of labor categories, rates, and any material costs included in the $41.5 million total. Without this granular data, direct comparison to industry benchmarks is difficult. However, the fixed-price nature suggests that the government sought to cap its exposure. If the contract included time and materials or labor hour CLINs, then benchmarking hourly rates against market data for similar skill sets in Hawaii would be crucial. Given the duration and scope, the average annual cost of approximately $13.8 million needs to be evaluated against the complexity and criticality of the systems being maintained. A comprehensive benchmark would involve comparing the proposed rates and total price against government databases (like the Contractor Cost Data Reporting system, if applicable) and commercial IT service provider pricing models.

What are the primary risks associated with this contract, and what mitigation strategies are likely in place?

Key risks include potential underperformance by the contractor, leading to degraded IT system functionality, and cost overruns if the fixed-price contract contains poorly defined scope or escalation clauses. Given the limited competition (two bids), there's also a risk that the government did not achieve the most competitive pricing. Mitigation strategies likely involve robust performance monitoring by the COR, clear service level agreements (SLAs) within the contract, and regular performance reviews. The fixed-price structure itself is a risk mitigation tool for cost certainty. For competition risk, the government relies on thorough market research prior to solicitation to ensure adequate competition is solicited.

How effective is the competition level (2 bids) in ensuring value for money for this specific IT systems maintenance requirement?

A competition level of two bids is generally considered adequate but not optimal for ensuring the best possible value for money. While it demonstrates that multiple companies were interested and capable, a higher number of bidders typically intensifies price competition and encourages more innovative solutions. The effectiveness here depends heavily on the pre-solicitation market research conducted by the Navy to determine if more bidders could have been attracted. If the market for these specialized services is inherently limited, two bids might represent a reasonable outcome. However, taxpayers may be foregoing potential savings that could have been realized with a more robustly competed contract.

What is the historical spending pattern for IT systems maintenance by the Department of the Navy in Hawaii, and how does this contract fit within that trend?

Analyzing historical spending patterns for IT systems maintenance by the Department of the Navy in Hawaii would provide crucial context. This includes examining previous contracts awarded for similar services, their values, durations, and the contractors involved. If this $41.5 million contract represents a significant increase or decrease compared to prior spending, it warrants further investigation. It could indicate a change in the scope of services, an increase in system complexity, or a shift in contracting strategy. Understanding this trend helps determine if the current award is consistent with established needs and budget allocations or if it represents a deviation that requires justification.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0060415R3008

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 520 GAITHER ROAD, ROCKVILLE, MD, 20850

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

Financial Breakdown

Contract Ceiling: $41,820,604

Exercised Options: $41,820,604

Current Obligation: $41,484,587

Actual Outlays: $-853,791

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: GS00Q09BGD0017

IDV Type: GWAC

Timeline