DoD's $98M AEGIS Missile Systems R&D contract awarded to Johns Hopkins APL raises value and competition questions
Contract Overview
Contract Amount: $97,965,014 ($98.0M)
Contractor: THE Johns Hopkins University Applied Physics Laboratory LLC
Awarding Agency: Department of Defense
Start Date: 2013-02-01
End Date: 2018-12-14
Contract Duration: 2,142 days
Daily Burn Rate: $45.7K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: IGF::OT::IGF TASK ORDER AWARD FOR AEGIS MISSILE SYSTEMS
Place of Performance
Location: LAUREL, HOWARD County, MARYLAND, 20723
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $98.0 million to THE JOHNS HOPKINS UNIVERSITY APPLIED PHYSICS LABORATORY LLC for work described as: IGF::OT::IGF TASK ORDER AWARD FOR AEGIS MISSILE SYSTEMS Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Significant investment in research and development for a critical defense system. 3. Long contract duration suggests a sustained need for specialized expertise. 4. Lack of competition raises concerns about achieving optimal value for taxpayer funds. 5. The specific R&D focus is on advanced missile defense capabilities. 6. Contractor's established role in missile defense may justify sole-source award, but requires scrutiny.
Value Assessment
Rating: questionable
Benchmarking the value of this sole-source R&D contract is challenging due to the lack of comparable bids. The cost-plus-fixed-fee structure means costs could escalate, and the final price is not predetermined. While Johns Hopkins APL is a recognized leader in this field, the absence of competition prevents a direct assessment of whether the pricing represents a fair market value. Further analysis of the contractor's historical performance and cost efficiency on similar projects would be necessary to fully evaluate value for money.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning no other vendors were solicited or considered. This approach is typically used when a specific contractor possesses unique capabilities or when urgency precludes a competitive process. The lack of competition means there was no opportunity for price negotiation or comparison against alternative solutions, which can lead to higher costs for the government and taxpayers.
Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible price through competitive bidding, potentially resulting in less efficient use of taxpayer funds.
Public Impact
Benefits the Department of Defense by advancing critical missile defense technology. Services delivered include research and development for the AEGIS missile system. Geographic impact is primarily within Maryland, where the contractor is located. Workforce implications include specialized R&D roles for scientists and engineers.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to inflated costs.
- Cost-plus-fixed-fee contract type carries inherent risk of cost overruns.
- Long contract duration could mask inefficiencies if not closely monitored.
- Sole-source award limits transparency in pricing.
Positive Signals
- Contractor is a highly specialized research institution with a strong track record in defense.
- Focus on R&D for a critical national security system addresses a vital need.
- Contract award supports advanced technological development in a key defense area.
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on advanced defense technologies. The market for specialized missile defense R&D is highly concentrated, often dominated by a few key institutions and contractors with unique expertise. Comparable spending in this niche area is difficult to pinpoint without more specific project details, but significant government investment is typical for developing and maintaining cutting-edge defense systems.
Small Business Impact
This contract does not appear to have a small business set-aside component, nor is there information suggesting significant subcontracting opportunities for small businesses. The specialized nature of the R&D work likely requires highly specific expertise, which may not be readily available from small businesses in this domain. Further investigation into subcontracting plans would be needed to assess any potential impact on the small business ecosystem.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices, potentially with involvement from the Missile Defense Agency's Inspector General. The cost-plus-fixed-fee structure necessitates rigorous financial oversight to ensure costs are reasonable and allocable. Transparency would be enhanced through regular reporting requirements and audits, though the sole-source nature limits public visibility into the negotiation process.
Related Government Programs
- AEGIS Combat System
- Missile Defense Programs
- Department of Defense Research and Development
- Advanced Weapons Systems
Risk Flags
- Sole-source award
- Cost-plus-fixed-fee contract type
- Lack of competition
- Potential for cost overruns
Tags
department-of-defense, missile-defense-agency, research-and-development, aegis-missile-systems, sole-source, cost-plus-fixed-fee, maryland, university-affiliated-research-center, advanced-technology, national-security
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $98.0 million to THE JOHNS HOPKINS UNIVERSITY APPLIED PHYSICS LABORATORY LLC. IGF::OT::IGF TASK ORDER AWARD FOR AEGIS MISSILE SYSTEMS
Who is the contractor on this award?
The obligated recipient is THE JOHNS HOPKINS UNIVERSITY APPLIED PHYSICS LABORATORY LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Missile Defense Agency).
What is the total obligated amount?
The obligated amount is $98.0 million.
What is the period of performance?
Start: 2013-02-01. End: 2018-12-14.
What is the track record of The Johns Hopkins University Applied Physics Laboratory LLC on similar Department of Defense contracts?
The Johns Hopkins University Applied Physics Laboratory LLC (JHU APL) has a long and distinguished history of supporting the Department of Defense (DoD) and other government agencies, particularly in the areas of research, development, and engineering for complex defense systems. JHU APL is a University Affiliated Research Center (UARC) and has been instrumental in the development and advancement of numerous critical defense programs, including the AEGIS missile system itself, ballistic missile defense, and various other advanced technologies. Their extensive experience and specialized expertise in areas like systems engineering, advanced modeling and simulation, and rapid prototyping make them a frequent and often sole-source provider for highly specialized R&D efforts. Their track record generally indicates successful delivery of complex technical solutions, though the nature of R&D often involves evolving requirements and challenges.
How does the pricing structure of this contract compare to industry standards for similar R&D efforts?
This contract utilizes a Cost Plus Fixed Fee (CPFF) pricing structure. CPFF contracts are common for research and development efforts where the scope of work is not fully defined at the outset, making it difficult to establish a firm fixed price. The government agrees to pay the contractor's allowable costs plus a fixed fee representing profit. While standard for R&D, this structure carries inherent risks of cost overruns if not meticulously managed and audited. Benchmarking the 'fixed fee' component against industry standards for similar R&D projects is crucial for assessing value. Without access to the specific fee negotiated and detailed cost breakdowns, a precise comparison is difficult. However, the absence of competition means the government did not benefit from potential price reductions that could arise from a competitive bidding process.
What are the primary risks associated with this sole-source, cost-plus-fixed-fee contract?
The primary risks associated with this sole-source, Cost Plus Fixed Fee (CPFF) contract are twofold. Firstly, the sole-source nature means there was no competitive bidding process, which inherently limits the government's ability to ensure it is receiving the best possible price and value. Without competing offers, the negotiated price may be higher than what could have been achieved in a competitive environment. Secondly, the CPFF structure, while suitable for R&D, places the cost risk primarily on the government. If the contractor's costs exceed initial estimates, the government is obligated to cover those allowable costs, plus the fixed fee. This increases the potential for budget overruns if project costs are not rigorously controlled and monitored by the contracting agency. Effective oversight and robust auditing are critical to mitigate these risks.
How effective is the AEGIS missile system, and what is the significance of ongoing R&D in this area?
The AEGIS missile system is a highly sophisticated and integrated naval weapon system developed by the United States, primarily used by the U.S. Navy and several allied nations. It is renowned for its capability to simultaneously track multiple targets and engage threats such as anti-ship missiles, aircraft, and ballistic missiles. Ongoing research and development (R&D) in this area are crucial for several reasons. Firstly, the threat landscape is constantly evolving, with adversaries developing new and more advanced offensive capabilities. Continuous R&D ensures the AEGIS system can counter these emerging threats, maintaining its effectiveness. Secondly, R&D aims to enhance the system's performance, such as improving detection ranges, reaction times, and engagement capabilities. Finally, R&D efforts may focus on integrating new technologies, improving system reliability, reducing operational costs, and extending the system's lifespan, ensuring its continued relevance and effectiveness in national defense.
What are the historical spending patterns for AEGIS missile system R&D by the Missile Defense Agency?
Historical spending patterns for AEGIS missile system R&D by the Missile Defense Agency (MDA) and the Department of the Navy (which originally developed AEGIS) show a consistent and significant investment over decades. The AEGIS system has undergone numerous upgrades and modifications since its inception, requiring continuous R&D funding. While specific figures for R&D dedicated solely to AEGIS can be complex to isolate due to its integration with broader naval and missile defense programs, overall MDA budgets and Navy shipbuilding/weapon system accounts reflect substantial outlays. These investments are driven by the need to maintain a technological edge against evolving threats, particularly ballistic missiles, and to ensure the system's interoperability with other defense assets. Spending often fluctuates based on specific upgrade cycles, new technology insertion programs, and the perceived threat environment.
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 › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: HQ014712R0002
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 11100 JOHNS HOPKINS RD, LAUREL, MD, 20723
Business Categories: Category Business, Limited Liability Corporation, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $98,227,824
Exercised Options: $98,227,824
Current Obligation: $97,965,014
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HQ014712D0004
IDV Type: IDC
Timeline
Start Date: 2013-02-01
Current End Date: 2018-12-14
Potential End Date: 2018-12-14 00:00:00
Last Modified: 2024-09-24
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