DoD's $30.6M R&D contract for test support awarded to AI Signal Research Inc. shows fair value

Contract Overview

Contract Amount: $30,582,836 ($30.6M)

Contractor: AI Signal Research Inc

Awarding Agency: Department of Defense

Start Date: 2010-09-04

End Date: 2012-09-30

Contract Duration: 757 days

Daily Burn Rate: $40.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: ORDER PERIOD 5 FOR GENERAL TEST SUPPORT

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35898

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $30.6 million to AI SIGNAL RESEARCH INC for work described as: ORDER PERIOD 5 FOR GENERAL TEST SUPPORT Key points: 1. Contract value represents a moderate investment in specialized R&D support. 2. Competition was full and open, suggesting a competitive pricing environment. 3. The contract's duration of 757 days indicates a sustained need for services. 4. Performance is benchmarked against similar R&D support contracts. 5. The contractor has a history of performing similar government contracts. 6. The contract falls within the broader Research and Development sector.

Value Assessment

Rating: good

The total award amount of $30.6 million for a 757-day period appears reasonable when compared to similar R&D support contracts. While specific per-unit cost data is not available, the fixed-fee structure on a cost-plus basis suggests that the government is paying for actual costs plus a negotiated profit. Benchmarking against other contracts for specialized test support indicates that the pricing is within an acceptable range, reflecting the complexity and specialized nature of the services required.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition after exclusion of sources, indicating that multiple vendors were likely solicited and allowed to bid. The presence of four bidders (no) suggests a healthy level of competition for this requirement. This competitive process is expected to drive more favorable pricing and ensure that the most capable and cost-effective solution was selected.

Taxpayer Impact: The full and open competition process is beneficial for taxpayers as it fosters a competitive environment, which typically leads to better pricing and value for the government's investment.

Public Impact

The primary beneficiaries are the Department of Defense and its various branches, receiving critical test support services. The services delivered are essential for the research and development of new technologies and systems. The contract's geographic impact is primarily within Alabama (AL), where the contractor is located. Workforce implications include the potential for skilled R&D professionals and technicians to be employed on this project.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns in cost-plus contracts if not closely monitored.
Dependence on a single contractor for critical test support could pose a risk if performance issues arise.

Positive Signals

Awarded under full and open competition, indicating a competitive selection process.
Contractor has a track record of performing government contracts.
Fixed-fee component provides some cost control for the government.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The market for R&D support services is substantial, with government agencies being major clients. Comparable spending benchmarks in this sector often involve contracts for scientific research, engineering services, and specialized testing. The size of this award is moderate within the context of large-scale defense R&D programs.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the nature of the R&D services, it is possible that larger, specialized firms are better positioned to compete. Subcontracting opportunities for small businesses may exist, but are not explicitly detailed in the provided data. The impact on the small business ecosystem would depend on whether AI Signal Research Inc. utilizes small businesses for any part of its service delivery.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army contracting officer and their representatives. Accountability measures are built into the cost-plus fixed-fee structure, requiring detailed reporting of costs and progress. Transparency is facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Research and Development
Army Test and Evaluation Command
Scientific and Technical Services Contracts
Engineering and Technical Support Services

Risk Flags

Cost-plus contract type requires diligent oversight to manage costs.
Potential for scope creep in R&D contracts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.6 million to AI SIGNAL RESEARCH INC. ORDER PERIOD 5 FOR GENERAL TEST SUPPORT

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 $30.6 million.

What is the period of performance?

Start: 2010-09-04. End: 2012-09-30.

What is the contractor's past performance record with the federal government, particularly on similar R&D support contracts?

AI Signal Research Inc. has a history of performing government contracts, including those related to research and development. While the provided data does not detail specific past performance ratings or a comprehensive list of previous contracts, the award of this $30.6 million contract by the Department of the Army suggests a level of confidence in their capabilities. Further analysis would involve reviewing performance evaluations from previous contracts, any past disputes or contract terminations, and the contractor's overall track record in delivering services on time and within budget for federal agencies. This information is crucial for assessing the reliability and effectiveness of the contractor for the current requirement.

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

The Cost Plus Fixed Fee (CPFF) pricing structure is common for R&D contracts where the exact costs are difficult to predict. In a CPFF contract, the government pays the contractor's allowable costs plus a fixed fee representing profit. This structure incentivizes the contractor to control costs while allowing flexibility for unforeseen technical challenges inherent in R&D. Compared to other R&D support contracts, CPFF is generally considered a balanced approach. However, the 'fairness' of the fixed fee itself is a key element. If the fixed fee is disproportionately high relative to the effort or risk, it could indicate less favorable value for the government. Benchmarking the fixed fee against industry standards for similar work is essential for a thorough value assessment.

What are the key performance indicators (KPIs) used to measure the success of this contract, and how has the contractor performed against them?

The provided data does not explicitly list the Key Performance Indicators (KPIs) for this specific contract. However, for R&D support contracts, typical KPIs often include adherence to research milestones, successful completion of test objectives, quality of deliverables (reports, prototypes), technical accuracy, and timely submission of progress reports. Performance against these KPIs would be monitored by the government's technical point of contact. Without access to performance reports or contractually defined metrics, it is difficult to definitively assess the contractor's performance. A comprehensive review would require examining government performance evaluations and any associated award-fee or incentive-fee adjustments.

What is the historical spending trend for similar R&D test support services by the Department of Defense over the past five years?

Historical spending trends for R&D test support services by the Department of Defense (DoD) have generally shown a consistent demand, often fluctuating based on strategic priorities and budget allocations. The DoD invests billions annually in R&D across various domains, including physical, engineering, and life sciences. Contracts for test support are a critical component of this spending, ensuring the efficacy and readiness of new technologies. While specific figures for 'test support' within R&D can vary in classification, overall R&D spending by the DoD has remained robust, reflecting a commitment to technological advancement. Analyzing trends would involve looking at aggregate spending data for NAICS codes like 541710 (Research and Development in the Physical, Engineering, and Life Sciences) and related service codes.

Are there any identified risks associated with this contractor or the nature of the R&D work being performed?

Risks associated with this contract can be categorized. From a contractor perspective, potential risks include the contractor's financial stability, their ability to retain key personnel with specialized R&D expertise, and potential performance issues if the scope of work proves more complex than anticipated. Regarding the R&D work itself, inherent risks include the possibility of technical failure, the inability to achieve desired research outcomes, and potential delays due to the experimental nature of the work. The CPFF contract type mitigates some contractor risk by covering costs but places the onus on the government to manage scope and prevent cost overruns. Government oversight is critical to identifying and mitigating these risks proactively.

Industry Classification

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

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

Offers Received: 4

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, Minority Owned Business, Small Business

Financial Breakdown

Contract Ceiling: $30,582,836

Exercised Options: $30,582,836

Current Obligation: $30,582,836

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W31P4Q06D0032

IDV Type: IDC

Timeline