DoD's $143.9M Engineering Services Contract with BAE Systems: A Deep Dive into Value and Competition

Contract Overview

Contract Amount: $143,882,604 ($143.9M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2009-11-04

End Date: 2017-07-31

Contract Duration: 2,826 days

Daily Burn Rate: $50.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: TECHNICAL DATA, COMPUTER SOFTWARE AND COMPUTER SOFTWARE DOCUMENTATION RIGHTS

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $143.9 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: TECHNICAL DATA, COMPUTER SOFTWARE AND COMPUTER SOFTWARE DOCUMENTATION RIGHTS Key points: 1. The contract's value of $143.9 million over its period of performance suggests a significant investment in engineering services. 2. BAE Systems, a major defense contractor, secured this award, indicating a competitive landscape for large-scale engineering support. 3. The Cost Plus Fixed Fee (CPFF) contract type introduces potential for cost overruns, necessitating robust oversight. 4. Performance spanned over 8 years, from 2009 to 2017, providing a long-term engagement for engineering solutions. 5. The 'Engineering Services' category (NAICS 541330) is critical for defense readiness and technological advancement. 6. The absence of small business set-aside flags suggests this contract was not specifically targeted for smaller enterprises.

Value Assessment

Rating: fair

Benchmarking the value of this $143.9 million contract is challenging without specific deliverables or comparable engineering service contracts. The CPFF structure, while common for complex projects where costs are uncertain, carries inherent risks of exceeding initial estimates. Without detailed performance metrics or a clear comparison to industry standards for similar engineering services, assessing the true value-for-money is difficult. The fixed fee component provides some cost certainty for the contractor's profit, but the overall cost to the government is variable.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. With 4 bidders identified, this suggests a reasonably competitive process for securing these engineering services. A competitive environment generally leads to better pricing and innovation, although the specific outcomes depend on the nature of the services and the bidding strategies employed.

Taxpayer Impact: A full and open competition, even with a moderate number of bidders, is generally favorable for taxpayers as it encourages competitive pricing and reduces the risk of inflated costs compared to sole-source awards.

Public Impact

The Department of Defense benefits from advanced engineering expertise to support its technological and operational requirements. This contract likely supported the development, testing, and sustainment of complex defense systems. The geographic impact is primarily centered in Maryland, where the contract was managed by the Defense Contract Management Agency. The contract's duration implies sustained employment for engineers and technical staff within BAE Systems and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contracts can lead to cost overruns if not managed diligently.
The long performance period (over 8 years) may obscure current market value or evolving service needs.
Lack of specific performance metrics makes it hard to gauge the efficiency and effectiveness of the services rendered.

Positive Signals

Awarded through full and open competition, suggesting a robust bidding process.
BAE Systems is a well-established defense contractor with a track record in complex engineering.
The contract duration indicates a stable, long-term need for these engineering services within the DoD.

Sector Analysis

Engineering services are a critical component of the defense sector, encompassing design, development, testing, and sustainment of military platforms and systems. The market for these services is substantial, driven by continuous modernization efforts and the complexity of modern defense technology. This contract fits within the broader category of professional services supporting government acquisition and program management, where large, established firms like BAE Systems often compete for significant awards.

Small Business Impact

This contract does not appear to have included a small business set-aside. The award to a large prime contractor like BAE Systems suggests that subcontracting opportunities may have existed for small businesses, but this would depend on BAE's specific subcontracting plan. Without explicit set-aside provisions, the direct impact on the small business ecosystem is likely limited to potential subcontracting roles.

Oversight & Accountability

Oversight for this contract would have been primarily managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. The CPFF structure necessitates close monitoring of costs and progress to prevent overruns. Transparency would be facilitated through contract reporting requirements, though detailed public access to performance data may be limited due to the sensitive nature of defense contracts.

Related Government Programs

Department of Defense Research, Development, Test, and Evaluation (RDT&E)
Defense Engineering Support Services
BAE Systems Defense Contracts
Professional Services Contracts (DoD)

Risk Flags

Cost Overrun Risk (CPFF)
Long Performance Period Obscurity
Lack of Specific Performance Metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $143.9 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. TECHNICAL DATA, COMPUTER SOFTWARE AND COMPUTER SOFTWARE DOCUMENTATION RIGHTS

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 $143.9 million.

What is the period of performance?

Start: 2009-11-04. End: 2017-07-31.

What was the specific nature of the engineering services provided under this contract?

The provided data indicates the contract was for 'Engineering Services' (NAICS 541330) awarded to BAE Systems Technology Solutions & Services Inc. by the Department of Defense. While the exact nature of the services is not detailed, this classification typically encompasses a wide range of activities including system design, integration, testing, analysis, and technical support for complex defense systems. Given the substantial value ($143.9 million) and the long performance period (over 8 years), it likely involved significant engineering efforts related to major defense platforms, weapon systems, or advanced technological development programs. Specifics would require access to the contract's statement of work (SOW).

How does the $143.9 million contract value compare to similar engineering services contracts within the DoD?

A direct comparison of the $143.9 million value requires access to a database of similar DoD engineering services contracts with comparable scope and duration. However, for a contract spanning over 8 years, this figure represents a substantial investment. Large defense contractors frequently receive contracts in the tens to hundreds of millions of dollars for complex engineering support. The value suggests a significant, long-term requirement for specialized engineering expertise, likely supporting critical defense programs. Without more granular data on the specific services and the number of bidders, it's difficult to definitively benchmark this as high or low relative to its peers.

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

The primary risk with a CPFF contract of this $143.9 million magnitude is the potential for cost escalation. While the 'fixed fee' provides a defined profit margin for the contractor, the 'cost plus' portion means the government reimburses allowable costs incurred by the contractor. If costs are not meticulously managed and controlled, the total expenditure can significantly exceed initial projections. For the government, this means a less predictable final cost. Robust oversight, detailed cost tracking, and clear performance metrics are crucial to mitigate these risks and ensure the government receives good value.

What does the 'full and open competition' with 4 bidders imply for cost efficiency and contractor performance?

Awarding a contract through 'full and open competition' with 4 bidders generally implies a healthy level of market interest and a competitive environment. This suggests that multiple capable firms vied for the work, which typically drives down prices and encourages innovation as contractors seek to offer the most compelling value proposition. For taxpayers, this competitive process is favorable as it increases the likelihood of obtaining services at a reasonable cost. The presence of 4 bidders indicates that the market is not overly concentrated, providing the agency with options and leverage during negotiations.

What is the historical spending trend for engineering services within the Department of Defense?

Historical spending on engineering services within the Department of Defense is consistently high, reflecting the continuous need for technical expertise in designing, developing, and maintaining complex military systems. Annual spending often runs into the tens of billions of dollars across various categories of engineering and technical support. This $143.9 million contract, awarded between 2009 and 2017, represents a portion of that larger trend. Factors influencing spending include geopolitical events, technological advancements, and modernization programs. The DoD's reliance on external engineering expertise underscores the critical role these services play in maintaining military readiness and technological superiority.

What is the significance of BAE Systems Technology Solutions & Services Inc. being awarded this contract?

BAE Systems Technology Solutions & Services Inc. is a major subsidiary of BAE Systems, a global defense, aerospace, and security company. Their involvement in a $143.9 million DoD contract signifies their established position and capabilities within the defense sector. Winning such awards typically reflects a strong track record, technical expertise, and the capacity to manage large, complex projects. For the DoD, awarding contracts to established prime contractors like BAE Systems can provide a single point of accountability for significant engineering efforts, leveraging their extensive resources and experience.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N6523608R0024

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Compagnie DE Developpement DE L'eau S.A.

Address: 1601 RESEARCH BLVD, 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: $233,566,437

Exercised Options: $233,566,437

Current Obligation: $143,882,604

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline