DoD's $24M contract for custom programming services awarded to BAE Systems, with a 7-year duration

Contract Overview

Contract Amount: $24,185,617 ($24.2M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2005-05-25

End Date: 2012-12-31

Contract Duration: 2,777 days

Daily Burn Rate: $8.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS INCENTIVE FEE

Sector: IT

Official Description: 200508!243968!1700!N68335!NAVAL AIR ENGINEERING STATION !N6833505C0278 !A!N! !N! ! !20050525!20060525!797032372!876861790!217304393!N!BAE SYSTEMS NATIONAL SECURITY !10920 TECHNOLOGY PL !SAN DIEGO !CA!92127!66000!073!06!SAN DIEGO !SAN DIEGO !CALIFORNIA!+000004689046!N!N!000010689046!6695!COMBINATION & MISCELLANEOUS INSTRUMENTS !C9E!ALL OTHER SUPPLIES AND EQUIPMENT !000 !* !541511!A!A!3! ! ! ! ! !20200930!B! ! !A! !A!U!V!2!003!B! !A!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! !Y!1710!N68335!0001! !

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $24.2 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: 200508!243968!1700!N68335!NAVAL AIR ENGINEERING STATION !N6833505C0278 !A!N! !N! ! !20050525!20060525!797032372!876861790!217304393!N!BAE SYSTEMS NATIONAL SECURITY !10920 TECHNOLOGY PL !SAN DIEGO !CA!92127!66000!073!06!SAN DIEGO !SAN … Key points: 1. The contract's value of $24.4 million over seven years suggests a significant investment in specialized IT services. 2. Awarded under full and open competition, indicating a competitive bidding process that could lead to better pricing. 3. The Cost Plus Incentive Fee (CPIF) contract type introduces performance-based incentives, potentially driving efficiency. 4. The contract's duration of over seven years implies a long-term need for these custom programming services. 5. The primary contractor, BAE Systems, is a major defense contractor with a substantial presence in the sector. 6. The contract falls under the 'Custom Computer Programming Services' NAICS code, highlighting its focus on software development and IT solutions.

Value Assessment

Rating: good

The total value of $24.4 million over approximately seven years averages to about $3.5 million per year. This figure appears reasonable for complex custom programming services for a major defense agency. Benchmarking against similar large-scale IT development contracts within the Department of Defense would provide a more precise value-for-money assessment. However, given the duration and scope, the annual spend is not immediately indicative of overpricing.

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 presence of three bidders, as indicated by the 'no' field, points to a healthy level of competition for this requirement. This competitive environment is generally favorable for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: The full and open competition process likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition award. It ensures that the government explored the market to find the best value.

Public Impact

The Department of Defense benefits from specialized custom computer programming services to support its operational and technological needs. This contract likely supports the development, maintenance, or enhancement of critical software systems for naval aviation engineering. The geographic impact is primarily within the United States, with BAE Systems' operations likely centered in San Diego, CA, and potentially supporting naval facilities. The contract supports a workforce of skilled IT professionals, including programmers, developers, and systems analysts, within BAE Systems and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Incentive Fee (CPIF) structure, while incentivizing, can lead to cost overruns if not carefully managed and monitored.
Long-term contracts of this nature carry inherent risks related to technological obsolescence and evolving requirements.
Reliance on a single large contractor like BAE Systems could present risks if performance issues arise or if the contractor's strategic direction shifts.

Positive Signals

Awarded through full and open competition, suggesting a robust market assessment and competitive pricing.
The CPIF contract type includes incentives, which can drive contractor performance and efficiency towards defined goals.
BAE Systems is a well-established defense contractor with significant experience in complex IT and engineering services.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on custom computer programming services. The market for such services is vast and highly competitive, driven by the continuous need for software development, system integration, and IT modernization across all industries, particularly in the defense sector. The Department of Defense is a major consumer of these services, often requiring highly specialized solutions tailored to unique operational environments. Comparable spending benchmarks would involve analyzing other large-scale IT development and support contracts awarded by DoD agencies.

Small Business Impact

This contract does not appear to have a specific small business set-aside component, as indicated by 'ss' being false. However, large prime contractors like BAE Systems are often required to meet small business subcontracting goals. The extent to which small businesses will participate as subcontractors on this contract will be crucial for assessing its broader impact on the small business ecosystem within the IT services sector.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The Cost Plus Incentive Fee structure necessitates close monitoring of costs and performance against established targets. Transparency is generally maintained through contract reporting requirements, though specific details of performance metrics and cost breakdowns may be considered sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense IT Modernization Programs
Naval Air Systems Command (NAVAIR) IT Support Contracts
Custom Software Development Services
Defense Information Systems Agency (DISA) Contracts

Risk Flags

Potential for cost overruns due to CPIF structure
Risk of technological obsolescence over the contract's long duration
Dependency on a single large contractor
Complexity in defining and measuring performance incentives for custom software

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.2 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. 200508!243968!1700!N68335!NAVAL AIR ENGINEERING STATION !N6833505C0278 !A!N! !N! ! !20050525!20060525!797032372!876861790!217304393!N!BAE SYSTEMS NATIONAL SECURITY !10920 TECHNOLOGY PL !SAN DIEGO !CA!92127!66000!073!06!SAN DIEGO !SAN DIEGO !CALIFORNIA!+000004689046!N!N!000010689046!6695!COMBINATION & MISCELLANEOUS INSTRUMENTS !C9E!ALL OTHER SUPPLIES AND EQUIPMENT !000 !* !541511!A!A!3! ! ! ! ! !202

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 $24.2 million.

What is the period of performance?

Start: 2005-05-25. End: 2012-12-31.

What is the track record of BAE Systems National Security in delivering similar custom programming services to the Department of Defense?

BAE Systems is a major defense contractor with extensive experience in providing a wide range of services, including IT, engineering, and systems integration, to the DoD. While specific performance data for this particular contract (N6833505C0278) is not detailed here, the company's overall track record suggests a capacity to handle complex projects. However, a deeper dive into past performance reviews, contract modifications, and any disputes or awards associated with their previous DoD IT contracts would be necessary for a comprehensive assessment. Their long-standing presence in the defense sector implies a level of established capability and familiarity with government contracting processes.

How does the average annual cost of this contract compare to similar custom programming services procured by the DoD?

The average annual cost for this contract is approximately $3.5 million ($24.4 million / 7 years). Benchmarking this against similar large-scale custom programming contracts within the DoD is complex due to variations in scope, complexity, security requirements, and contract types. However, for a contract involving potentially mission-critical systems and a major contractor like BAE Systems, this annual figure appears within a reasonable range. Contracts for highly specialized software development, system integration, or cybersecurity solutions for defense applications can often exceed this amount, especially when factoring in extensive research, development, and long-term support.

What are the primary risks associated with the Cost Plus Incentive Fee (CPIF) contract type for this specific service?

The primary risk with a CPIF contract is the potential for cost overruns if the incentive targets are not well-defined or if the contractor's efforts to achieve incentives lead to unforeseen expenses. For custom programming, defining objective and measurable performance metrics can be challenging. If the government's cost estimation is inaccurate or if the contractor's actual costs significantly exceed projections, the incentive fee could inflate the total price. Effective oversight is crucial to ensure that the incentives align with the government's true objectives and that costs remain controlled throughout the contract's lifecycle.

What is the historical spending pattern for custom computer programming services by the Naval Air Warfare Center Weapons Division (NAWCWD) or similar entities?

Historical spending on custom computer programming services by entities like NAWCWD typically reflects the evolving technological needs of naval aviation and warfare systems. This includes significant investment in software for aircraft systems, simulation and training, data analysis, command and control, and cybersecurity. Spending patterns often show an increasing trend in IT services as systems become more digitized and interconnected. Analyzing past contract awards within the 'Custom Computer Programming Services' (NAICS 541511) category for NAWCWD and related Naval Air Engineering Station commands would reveal the scale and nature of their IT procurements, highlighting the importance of such services to their mission.

How does the duration of this contract (over 7 years) impact the risk of technological obsolescence for the delivered programming services?

A contract duration exceeding seven years for custom programming services inherently carries a risk of technological obsolescence. Software development is a rapidly evolving field, and the technologies, programming languages, and platforms used at the beginning of such a long contract may be outdated by its end. This necessitates careful planning for technology refresh cycles, modular system design, and potentially incorporating provisions for future upgrades or re-architecture within the contract. The government must actively manage this risk through continuous monitoring of technological advancements and proactive engagement with the contractor to ensure the delivered solutions remain relevant and effective throughout their lifecycle.

Industry Classification

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

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: COST PLUS INCENTIVE FEE (V)

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline