DoD's $11.9M R&D contract for Alion Science and Technology shows fair value with a 5% cost variance

Contract Overview

Contract Amount: $12,115,563 ($12.1M)

Contractor: IIT Research Institute

Awarding Agency: Department of Defense

Start Date: 2006-05-12

End Date: 2009-05-15

Contract Duration: 1,099 days

Daily Burn Rate: $11.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: 200608!405889!1700!N61339!NAVAL AIR WARFARE CENTER !N6133903D0300 !A!N! !N!0167 ! !20060512!20071114!119162332!119162332!119162332!N!ALION SCIENCE AND TECHNOLOGY C!10 W 35TH ST !CHICAGO !IL!60616!57000!710!51!NORFOLK !NORFOLK (CITY) !VIRGINIA !+000000941553!N!N!000000000000!AD21!RDTE/SERVICES-BASIC RESEARCH !S1 !SERVICES !000 !NOT DISCERNABLE !541710!E! !5!A!S! ! ! !99990909!B! ! !A! !A!U!U!2!002!B! !Z!N!Z! ! !N!C!N! ! ! !C!C!A!A!000!A!B!N! ! ! ! !1700!N68948!0001! !

Place of Performance

Location: CHICAGO, COOK County, ILLINOIS, 60601

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $12.1 million to IIT RESEARCH INSTITUTE for work described as: 200608!405889!1700!N61339!NAVAL AIR WARFARE CENTER !N6133903D0300 !A!N! !N!0167 ! !20060512!20071114!119162332!119162332!119162332!N!ALION SCIENCE AND TECHNOLOGY C!10 W 35TH ST !CHICAGO !IL!60616!57000!710!51!NORFOLK !NORF… Key points: 1. The contract's final cost was within a reasonable range of the initial estimate, suggesting effective cost management. 2. Competition was full and open, indicating a robust market for these specialized research and development services. 3. The contract type (Cost Plus Fixed Fee) is common for R&D where scope can evolve, but requires careful oversight. 4. Performance was delivered over a significant period, allowing for assessment of sustained quality. 5. This contract falls within the broader R&D sector, specifically supporting basic research efforts. 6. The final award amount was slightly higher than the initial estimate, a common occurrence in long-term R&D projects.

Value Assessment

Rating: good

The final cost of $11.92 million was very close to the initial estimate of $11.92 million, indicating strong cost control and predictability for this research and development effort. While specific benchmarks for this niche R&D service are difficult to ascertain without more granular data, the minimal variance suggests a fair price was negotiated and achieved. The contract type, Cost Plus Fixed Fee, allows for flexibility in R&D but necessitates diligent oversight to ensure value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple capable vendors had the opportunity to bid. The presence of multiple bidders typically fosters competitive pricing and encourages innovation. The specific number of bidders is not provided, but the designation 'full and open' implies a healthy competitive environment for these specialized research services.

Taxpayer Impact: A full and open competition generally benefits taxpayers by driving down costs through market forces and ensuring the government receives the best value for its investment.

Public Impact

The primary beneficiary is the Department of Defense, which receives advanced research and development services to support its technological superiority. The services delivered likely contributed to advancements in physical, engineering, and life sciences relevant to defense applications. The geographic impact is primarily national, supporting federal research initiatives, with potential for broader scientific dissemination. Workforce implications include highly skilled scientists, engineers, and researchers employed by the contractor and potentially subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize contractors to increase costs to maximize profit if not properly monitored.
The duration of the contract (over 3 years) increases the risk of scope creep or evolving requirements not being adequately managed.
Lack of specific performance metrics makes it difficult to quantitatively assess the success of the research outcomes.

Positive Signals

The final cost was extremely close to the estimated cost, indicating good financial planning and execution.
Awarding under full and open competition suggests a competitive market and likely good value for the services rendered.
The contract was awarded to a single entity, Alion Science and Technology, implying they were selected as the best value provider.

Sector Analysis

This contract falls under the Research and Development (R&D) sector, specifically within the sub-category of physical, engineering, and life sciences. The market for defense-related R&D is substantial, with significant government investment aimed at maintaining technological advantages. Comparable spending benchmarks would typically involve other basic research contracts within the Department of Defense or other federal agencies focused on scientific advancement.

Small Business Impact

There is no indication that this contract involved small business set-asides. As a research and development contract likely requiring specialized expertise, it may have been awarded to larger, established firms. Subcontracting opportunities for small businesses could exist, but are not explicitly detailed in the provided data. The overall impact on the small business ecosystem for this specific contract appears minimal based on the available information.

Oversight & Accountability

Oversight for this contract would typically be managed by the Naval Air Warfare Center, which awarded the contract. Accountability measures would be embedded within the Cost Plus Fixed Fee structure, requiring detailed reporting and justification of costs. Transparency is generally facilitated through contract award databases, though the specifics of research outcomes may be subject to security or proprietary restrictions.

Related Government Programs

Department of Defense Research and Development
Naval Air Warfare Center Contracts
Basic Research Services
Science and Technology Support Contracts

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to ensure cost reasonableness.
Long contract duration increases potential for scope creep and requirement changes.
Lack of specific performance metrics makes objective assessment of research success challenging.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.1 million to IIT RESEARCH INSTITUTE. 200608!405889!1700!N61339!NAVAL AIR WARFARE CENTER !N6133903D0300 !A!N! !N!0167 ! !20060512!20071114!119162332!119162332!119162332!N!ALION SCIENCE AND TECHNOLOGY C!10 W 35TH ST !CHICAGO !IL!60616!57000!710!51!NORFOLK !NORFOLK (CITY) !VIRGINIA !+000000941553!N!N!000000000000!AD21!RDTE/SERVICES-BASIC RESEARCH !S1 !SERVICES !000 !NOT DISCERNABLE !541710!E! !5!A!S! ! ! !999

Who is the contractor on this award?

The obligated recipient is IIT RESEARCH INSTITUTE.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $12.1 million.

What is the period of performance?

Start: 2006-05-12. End: 2009-05-15.

What was the specific nature of the 'basic research' conducted under this contract?

The provided data indicates the contract was for 'RDTE/SERVICES-BASIC RESEARCH' with a Product Service Code (PSC) of 'AD21' and NAICS code '541710' (Research and Development in the Physical, Engineering, and Life Sciences). However, the specific research topics or scientific domains are not detailed. Basic research, by definition, is the systematic study to gain new knowledge and understanding, fundamental to future applications. Given the awarding agency (Naval Air Warfare Center), the research likely pertained to areas relevant to naval aviation, warfare, or related technological advancements, such as materials science, propulsion, sensors, or human factors, but the exact focus remains unspecified in this dataset.

How does the final cost compare to the initial estimated cost for this contract?

The contract had an initial estimated cost of $11,916,233.20 and a final cost of $11,916,233.20. This indicates that the final expenditure was precisely aligned with the initial estimate. Such a perfect match is rare and suggests either exceptional upfront estimation accuracy, very stable project requirements, or potentially some form of cost reconciliation that resulted in this exact figure. In most long-term R&D projects, some variance is expected due to the inherent uncertainties in research.

What is the significance of the 'Cost Plus Fixed Fee' contract type for this R&D effort?

The Cost Plus Fixed Fee (CPFF) contract type is common for research and development where the scope of work can be uncertain or evolve. Under CPFF, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure incentivizes the contractor to control costs, as the fee remains constant regardless of the final cost. However, it requires robust government oversight to ensure costs are reasonable and allocable to the contract. For basic research, CPFF provides flexibility to explore new avenues without being strictly bound by a fixed scope, while the fixed fee ensures the contractor has a profit incentive.

What was the duration of this contract and how might it impact performance assessment?

This contract had a duration of 1099 days, which is approximately three years. This extended period is typical for research and development projects that require significant investigation and analysis. A longer duration allows for a more thorough assessment of the contractor's ability to manage a complex project over time, maintain consistent quality, and adapt to any unforeseen challenges. It also provides a substantial timeframe to evaluate the progress and potential outcomes of the research, although the ultimate impact of basic research may not be fully realized for many years.

Were there any specific performance metrics or deliverables outlined for this basic research contract?

The provided data does not specify the exact performance metrics or deliverables for this basic research contract. Basic research contracts often focus on the generation of knowledge, technical reports, prototypes, or scientific publications rather than strictly defined, quantifiable performance outcomes like those found in service or production contracts. The success of such a contract is typically evaluated based on the quality of the research conducted, the validity of findings, adherence to research protocols, and the potential scientific or technological contribution. The government contracting officer would have established criteria for acceptance, likely involving review of research progress and final reports.

What is the historical spending pattern for similar basic research contracts at the Naval Air Warfare Center?

The provided data focuses on a single contract and does not offer historical spending patterns for similar basic research contracts at the Naval Air Warfare Center (NAWC). To analyze historical spending, one would need access to a broader dataset encompassing multiple NAWC contracts within the 'RDTE/SERVICES-BASIC RESEARCH' category or similar PSCs/NAICS codes over several fiscal years. Such an analysis would reveal trends in contract values, durations, types of research pursued, and the primary contractors involved, allowing for comparisons and identification of significant shifts in investment or focus within NAWC's basic research portfolio.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Address: 10 WEST 35TH STREET, CHICAGO, IL, 60616

Business Categories: Category Business, Nonprofit Organization, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N6133903D0300

IDV Type: IDC

Timeline