DoD's $209.5M contract for R&D services awarded to International Consultants, Inc. shows potential value concerns

Contract Overview

Contract Amount: $20,950,100 ($21.0M)

Contractor: HII Mission Technologies Corp

Awarding Agency: Department of Defense

Start Date: 2003-01-23

End Date: 2008-08-10

Contract Duration: 2,026 days

Daily Burn Rate: $10.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: 200304!002365!2100!AE07 !TACOM - WARREN !DAAE0703DS011 !A!N! !N!0001 !20030123!20080202!194053971!122525991!110341133!N!INTERNATIONAL CONSULTANTS, INC!4134 LINDEN AVENUE, STE 3!DAYTON !OH!45432!18000!049!39!COLUMBUS !FRANKLIN !OHIO !+000002877355!N!N!000000000000!AD21!RDTE/SERVICES-BASIC RESEARCH !S1 !SERVICES !1000!NOT DISCERNABLE OR CLASSIFIED !561499!E! !5!A!M! !E! !99990909!B! ! !B! !A!N!U!2!002!N!3A!Z!Y!Z! ! !N!A!Y!N!A! ! ! !C!C!001!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: WARREN, MACOMB County, MICHIGAN, 48091, UNITED STATES OF AMERICA

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $21.0 million to HII MISSION TECHNOLOGIES CORP for work described as: 200304!002365!2100!AE07 !TACOM - WARREN !DAAE0703DS011 !A!N! !N!0001 !20030123!20080202!194053971!122525991!110341133!N!INTERNATIONAL CONSULTANTS, INC!4134 LINDEN AVENUE, STE 3!DAYTON !OH!45432!18000!049!39!COLUMBUS !FRANK… Key points: 1. The contract's cost-plus-fixed-fee structure may incentivize cost overruns. 2. Limited competition could lead to suboptimal pricing for taxpayers. 3. The contract duration of over 5 years raises questions about long-term necessity and adaptability. 4. Performance context is lacking, making it difficult to assess the value delivered. 5. The services procured fall under a broad 'All Other Business Support Services' NAICS code, suggesting potential for scope creep or unclear objectives. 6. The contractor's track record and specific performance on this contract require deeper investigation.

Value Assessment

Rating: questionable

The total award amount of $209.5 million over approximately five years warrants scrutiny. Without detailed performance metrics or comparable contract data, it's challenging to definitively benchmark value. The cost-plus-fixed-fee (CPFF) pricing structure, while common for R&D, can sometimes lead to higher costs if not tightly managed, as the contractor is reimbursed for allowable costs plus a fixed fee. This contrasts with fixed-price contracts where the contractor bears more risk for cost overruns. Benchmarking against similar R&D services contracts within the Department of Defense or across government would be necessary for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. However, the data indicates only two bids were received. While full and open competition is generally preferred, a low number of bids can sometimes suggest barriers to entry, lack of market interest, or insufficient outreach, potentially limiting price discovery and innovation.

Taxpayer Impact: While full and open competition was utilized, the low number of bidders suggests that taxpayers may not have benefited from the most competitive pricing possible. Further analysis into why only two bids were received could reveal opportunities for improving future competition.

Public Impact

The primary beneficiaries are likely the Department of the Army and potentially other Department of Defense entities requiring research, development, and technical support services. The contract delivers essential R&D and basic research services, contributing to technological advancement and national security objectives. The geographic impact is centered around the contractor's location in Dayton, Ohio, and the Army's operational needs. Workforce implications include employment opportunities for researchers, engineers, and support staff at International Consultants, Inc. and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee structure may not incentivize cost efficiency.
Low number of bidders in a full and open competition raises concerns about market engagement.
Broad NAICS code (561499) could indicate a lack of specificity in requirements.
Contract duration of over 5 years requires justification for long-term need.
Lack of publicly available performance data hinders value assessment.

Positive Signals

Awarded under full and open competition, adhering to procurement best practices.
Contracting for R&D services is crucial for maintaining technological superiority.
The fixed fee component provides some level of cost predictability for the government.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically focusing on research and development (R&D). The NAICS code 561499, 'All Other Business Support Services,' is quite broad and encompasses a wide range of activities. The Department of Defense is a significant consumer of R&D services, investing heavily in innovation to maintain a technological edge. Comparable spending benchmarks would involve analyzing other large R&D contracts awarded by DoD agencies for similar types of services, considering factors like contract type, duration, and specific technical domains.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss=false, sb=false). As a large contract awarded to International Consultants, Inc., there are no direct set-aside benefits for small businesses. However, the potential for subcontracting opportunities exists, which could indirectly benefit small businesses if International Consultants, Inc. engages them for specialized support. The impact on the small business ecosystem would depend on the extent of any subcontracting.

Oversight & Accountability

Oversight for this contract would primarily reside within the Department of the Army, specifically the TACOM - WARREN contracting office. Accountability measures are typically embedded in the contract terms, including performance standards, reporting requirements, and payment schedules tied to milestones. Transparency is facilitated through contract databases like FPDS, which provide basic award information. The Inspector General's office for the Department of Defense would have jurisdiction to investigate fraud, waste, or abuse related to this contract.

Related Government Programs

Department of Defense Research and Development Contracts
Army R&D Services
Professional, Scientific, and Technical Services Contracts
Cost-Plus Contracts
Full and Open Competition Awards

Risk Flags

Potential for cost overruns due to CPFF structure.
Limited competition despite full and open award.
Broad NAICS code lacks specificity.
Lack of publicly available performance data.
Long contract duration requires justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.0 million to HII MISSION TECHNOLOGIES CORP. 200304!002365!2100!AE07 !TACOM - WARREN !DAAE0703DS011 !A!N! !N!0001 !20030123!20080202!194053971!122525991!110341133!N!INTERNATIONAL CONSULTANTS, INC!4134 LINDEN AVENUE, STE 3!DAYTON !OH!45432!18000!049!39!COLUMBUS !FRANKLIN !OHIO !+000002877355!N!N!000000000000!AD21!RDTE/SERVICES-BASIC RESEARCH !S1 !SERVICES !1000!NOT DISCERNABLE OR CLASSIFIED !561499!E! !5!A!M! !E! !99990909!B

Who is the contractor on this award?

The obligated recipient is HII MISSION TECHNOLOGIES CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $21.0 million.

What is the period of performance?

Start: 2003-01-23. End: 2008-08-10.

What is the specific nature of the R&D services provided under this contract, and how do they align with the Army's strategic objectives?

The contract specifies 'RDTE/SERVICES-BASIC RESEARCH' and falls under NAICS code 561499 ('All Other Business Support Services'). This broad classification makes it difficult to ascertain the precise nature of the R&D. Basic research aims to advance fundamental knowledge and understanding. Without more specific details on the project's technical focus, it's challenging to directly link it to current Army strategic objectives. Typically, R&D contracts would detail specific research areas, technological goals, or scientific challenges the contractor is expected to address. The vagueness here suggests a need for further clarification on the scope and purpose of the research funded by this $209.5 million award.

How does the $209.5 million award amount compare to similar R&D contracts awarded by the Department of the Army in the past five years?

Comparing the $209.5 million award to similar R&D contracts requires access to a comprehensive database of Army R&D procurements, filtered by contract type (Cost Plus Fixed Fee), duration (approx. 5 years), and service category (basic research/technical services). Anecdotally, $200 million+ is a substantial sum for a single R&D contract. However, the Army procures a wide range of R&D, from fundamental science to applied engineering for major weapon systems. To provide a precise comparison, one would need to analyze the average award value for contracts with similar scope and duration within the 'RDTE/SERVICES-BASIC RESEARCH' or related categories. Without this granular data, it's difficult to definitively state if this contract is high, low, or average in value relative to its peers.

What were the specific criteria used to evaluate proposals and select International Consultants, Inc. for this contract?

As this contract was awarded under 'Full and Open Competition,' the evaluation criteria would have been outlined in the solicitation document (e.g., Request for Proposal - RFP). Standard evaluation factors for R&D contracts often include technical approach, past performance, management capability, key personnel, and price. For Cost Plus Fixed Fee contracts, the government typically places significant emphasis on the technical merit of the proposed approach and the contractor's ability to successfully execute the research. Price is also a factor, but often weighted less heavily than technical factors in R&D procurements where innovation and feasibility are paramount. The specific weighting of these factors would have been detailed in the RFP, and the selection of International Consultants, Inc. implies they best met or exceeded the government's requirements across these criteria.

Are there any documented performance issues or contractor deficiencies associated with International Consultants, Inc. on this or similar government contracts?

Assessing documented performance issues requires accessing contractor performance assessment reporting tools (e.g., Contractor Performance Assessment Reporting System - CPARS) or conducting targeted searches of contract databases and news archives for relevant information. Publicly available data from FPDS does not typically include detailed performance histories or deficiency reports. Without access to these specialized systems or further investigation, it is not possible to definitively state whether International Consultants, Inc. has faced performance issues on this or similar contracts. A thorough risk assessment would necessitate reviewing their past performance record.

What is the historical spending trend for 'RDTE/SERVICES-BASIC RESEARCH' or similar services by the Department of the Army over the last decade?

Analyzing the historical spending trend for 'RDTE/SERVICES-BASIC RESEARCH' by the Department of the Army requires querying federal procurement data over a ten-year period. This would involve filtering contract awards by agency (Department of the Army), fiscal year, and relevant Product Service Codes (PSCs) or NAICS codes related to basic research and R&D services. The trend analysis would reveal whether spending in this category has increased, decreased, or remained relatively stable. Such an analysis could indicate shifts in Army priorities, budget allocations for research, or the overall market demand for these types of services. Without performing this specific data query, a precise trend cannot be provided.

Given the CPFF contract type and duration, what mechanisms are in place to ensure cost control and prevent contractor inefficiency?

Cost-Plus-Fixed-Fee (CPFF) contracts, while reimbursing allowable costs, include a fixed fee that does not change regardless of the final cost. This provides some incentive for the contractor to control costs, as exceeding them reduces their overall profit margin (fee as a percentage of total cost). Additional cost control mechanisms include rigorous government oversight of incurred costs, audits by the Defense Contract Audit Agency (DCAA), defined ceilings on allowable costs, and performance metrics that must be met to receive payments. The Contracting Officer's Representative (COR) plays a crucial role in monitoring performance and ensuring work is progressing as planned and within scope. Regular reviews and reporting requirements also contribute to cost management.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Business Support Services › All Other Business Support Services

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: NEW Mountain Finance Sbic, LP (UEI: 052371981)

Address: 635 DISCOVERY DR, HUNTSVILLE, AL, 35806

Business Categories: Category Business, Not Designated a Small Business, Subchapter S Corporation

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DAAE0703DS011

IDV Type: IDC

Timeline