DoD's $28.9M R&D contract with AI Signal Research Inc. shows mixed value and competition signals

Contract Overview

Contract Amount: $28,939,694 ($28.9M)

Contractor: AI Signal Research Inc

Awarding Agency: Department of Defense

Start Date: 2012-05-23

End Date: 2018-09-30

Contract Duration: 2,321 days

Daily Burn Rate: $12.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: TASK ORDER 0002

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35898

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $28.9 million to AI SIGNAL RESEARCH INC for work described as: TASK ORDER 0002 Key points: 1. The contract's value proposition appears fair, with a cost-plus-fixed-fee structure that allows for flexibility but requires careful oversight. 2. Competition was conducted under 'full and open competition after exclusion of sources,' suggesting a potentially limited but deliberate bidding process. 3. Risk indicators are moderate, stemming from the cost-plus contract type and the R&D nature of the work, which inherently involves uncertainty. 4. Performance context is limited without specific task order details, but the extended duration suggests ongoing R&D efforts. 5. The contract falls within the R&D sector, specifically focusing on physical, engineering, and life sciences. 6. The fixed fee component of the contract provides some cost control, but the overall cost is subject to the actual expenses incurred.

Value Assessment

Rating: fair

The contract's cost-plus-fixed-fee (CPFF) structure is common for R&D efforts where scope can evolve. While CPFF can lead to higher costs than fixed-price contracts if not managed well, the fixed fee provides a ceiling on the contractor's profit. Benchmarking against similar R&D contracts is difficult without more specific details on the research performed. However, the total award amount of approximately $28.9 million over a period of roughly six years suggests a moderate annual spend for this type of research.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'full and open competition after exclusion of sources.' This solicitation method indicates that while the competition was intended to be open, certain sources were specifically excluded, potentially limiting the number of bidders. The rationale for exclusion is not provided, but it could be due to specific technical capabilities or prior performance. The limited nature of the competition might impact price discovery, potentially leading to less competitive pricing than a truly unrestricted full and open competition.

Taxpayer Impact: The exclusion of certain sources, even within an open competition framework, could mean taxpayers did not benefit from the broadest possible range of competitive offers, potentially impacting the final price paid.

Public Impact

The primary beneficiaries are the Department of Defense and its research initiatives, advancing scientific and technological capabilities. The services delivered are research and development in physical, engineering, and life sciences, excluding biotechnology. The geographic impact is primarily within Alabama, where the contractor is located, but the research outcomes could have national defense implications. Workforce implications include employment for researchers, scientists, and support staff at AI Signal Research Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' in the competition method raises questions about the extent of true market competition and potential fairness.
Cost-plus contracts, while flexible for R&D, carry inherent risks of cost overruns if not rigorously monitored.
The R&D nature of the contract means outcomes are not guaranteed, posing a risk to the return on investment.

Positive Signals

The contract was awarded to a single entity, AI Signal Research Inc., suggesting a focused relationship for specific R&D needs.
The duration of the contract (over 6 years) indicates a sustained effort and potential for significant research advancements.
The R&D focus aligns with the DoD's strategic goals for technological superiority.

Sector Analysis

This contract falls under the Research and Development (R&D) sector, specifically within the NAICS code 541712 for Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology). This sector is critical for defense innovation, driving advancements in areas like materials science, advanced manufacturing, and complex systems engineering. The market for defense R&D is characterized by specialized firms, long development cycles, and significant government investment. Comparable spending benchmarks are difficult without knowing the specific R&D focus, but the annual spend of roughly $4.8 million is within the typical range for specialized R&D contracts.

Small Business Impact

There is no indication that this contract included small business set-asides, nor is there information suggesting subcontracting plans specifically targeting small businesses. The contract was awarded to AI Signal Research Inc., a single entity. Without explicit set-aside provisions or subcontracting goals, the direct impact on the small business ecosystem from this specific contract is likely minimal, though the prime contractor may engage small businesses as part of their supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army contracting officers and program managers. The cost-plus-fixed-fee structure necessitates close monitoring of expenditures and progress to ensure funds are used effectively and efficiently. Transparency is generally maintained through contract reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Research and Development Programs
Army Science and Technology Investments
Physical and Engineering Sciences Research
Life Sciences Research Contracts

Risk Flags

Limited competition due to source exclusion.
Cost-plus contract type requires diligent oversight to manage costs.
R&D inherently involves uncertainty in outcomes and potential for cost escalation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.9 million to AI SIGNAL RESEARCH INC. TASK ORDER 0002

Who is the contractor on this award?

The obligated recipient is AI SIGNAL RESEARCH INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $28.9 million.

What is the period of performance?

Start: 2012-05-23. End: 2018-09-30.

What specific research projects were undertaken under this contract, and what were their key outcomes?

Specific details on the research projects and their outcomes are not publicly available within the provided data. The contract falls under NAICS code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology).' This broad category could encompass a wide range of activities, from materials science and advanced engineering to fundamental biological research relevant to defense applications. Without access to the contract's statement of work, technical reports, or final deliverables, it is impossible to detail the specific projects or their tangible results. Such information is often classified or proprietary due to the sensitive nature of defense research.

How does the pricing structure (Cost Plus Fixed Fee) compare to other R&D contracts of similar scope within the DoD?

The Cost Plus Fixed Fee (CPFF) pricing structure is a common and often appropriate choice for research and development contracts where the scope of work is not fully defined at the outset or is expected to evolve. Compared to fixed-price contracts, CPFF offers flexibility, allowing the contractor to incur necessary costs while working towards project goals. However, it also shifts some of the cost risk to the government. For R&D of similar scope, CPFF is generally preferred over fixed-price contracts because it incentivizes the contractor to pursue innovative solutions without being overly constrained by a rigid budget. The 'fixed fee' component provides the contractor with a predetermined profit margin, which is negotiated upfront. Benchmarking the 'fairness' of the fee requires detailed analysis of the contractor's labor rates, overhead, and the complexity of the R&D effort, which is not available in this summary data.

What were the primary reasons for excluding certain sources during the 'full and open competition after exclusion of sources' process?

The 'full and open competition after exclusion of sources' solicitation method implies that while the competition was intended to be open to all responsible sources, specific entities were deliberately excluded from bidding. The reasons for such exclusions are typically documented in the contract file and can include factors such as the need for highly specialized knowledge or technology possessed by only a few entities, prior performance issues with certain contractors, or national security considerations. Without access to the contract's justification and approval (J&A) document or related procurement records, the precise reasons for excluding sources remain unknown. This method aims to balance competition with the need for specific capabilities, but it inherently limits the pool of potential bidders.

What is the track record of AI Signal Research Inc. in performing similar R&D contracts for the federal government?

Information regarding the specific track record of AI Signal Research Inc. in performing similar R&D contracts for the federal government is not detailed in the provided data. However, the award of this approximately $28.9 million contract by the Department of the Army suggests a level of capability and past performance deemed sufficient by the agency. To assess their track record thoroughly, one would need to review their contract history, including past performance evaluations, any awards or penalties, and the successful completion of previous R&D projects. Government contract databases and performance assessment systems (like CPARS) would typically hold this information.

How does the total contract value of $28.9 million over approximately six years translate into an annual spending rate, and is this rate typical for R&D in this domain?

The total contract value of $28,939,693.51 was awarded over a period from May 23, 2012, to September 30, 2018, which is approximately 6.3 years. Dividing the total value by the duration yields an average annual spending rate of roughly $4.59 million per year ($28.9M / 6.3 years). This annual rate is considered moderate for specialized R&D contracts within the Department of Defense, particularly those involving physical, engineering, or life sciences. The typical spending rate can vary significantly based on the specific research area, the maturity of the technology, and the project's objectives. However, this figure suggests a sustained investment in the contractor's R&D capabilities.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 3411 TRIANA BLVD SW, HUNTSVILLE, AL, 35805

Business Categories: Asian Pacific American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $28,939,694

Exercised Options: $28,939,694

Current Obligation: $28,939,694

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W31P4Q11D0008

IDV Type: IDC

Timeline