DoD's $18.5M R&D contract with IIT Research Institute shows mixed value and limited competition
Contract Overview
Contract Amount: $18,530,691 ($18.5M)
Contractor: IIT Research Institute
Awarding Agency: Department of Defense
Start Date: 2009-09-30
End Date: 2012-03-29
Contract Duration: 911 days
Daily Burn Rate: $20.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: TECHNICAL AREA TASKS
Place of Performance
Location: CHICAGO, COOK County, ILLINOIS, 60616
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $18.5 million to IIT RESEARCH INSTITUTE for work described as: TECHNICAL AREA TASKS Key points: 1. Contract value of $18.5M for R&D services over 3 years. 2. Awarded under full and open competition, but only two bidders participated. 3. Performance period of 911 days suggests a moderately complex project. 4. Cost Plus Fixed Fee contract type can incentivize cost overruns. 5. No small business set-aside indicates potential for large prime contractors. 6. Focus on physical, engineering, and life sciences R&D.
Value Assessment
Rating: fair
The contract's value of $18.5 million for R&D services over approximately 2.5 years appears within a reasonable range for specialized research. However, without specific benchmarks for the 'TECHNICAL AREA TASKS' performed, a precise value-for-money assessment is challenging. The Cost Plus Fixed Fee (CPFF) contract type, while allowing for flexibility in research, carries inherent risks of cost escalation if not closely managed. Comparing this to similar R&D contracts within the Department of Defense for comparable technical areas would provide a clearer picture of its cost-effectiveness.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is generally positive for price discovery. However, the participation of only two bidders suggests that the market for this specific technical area may be limited, or that other potential bidders were deterred for various reasons. This level of competition, while present, is not as robust as ideal and could potentially lead to a less competitive pricing environment than if more firms had participated.
Taxpayer Impact: With only two bidders, taxpayers may not have benefited from the most aggressive pricing possible. While competition existed, it was not extensive enough to guarantee the lowest possible cost for the government.
Public Impact
Benefits the Department of Defense by advancing research in physical, engineering, and life sciences. Services delivered likely involve specialized scientific research and development tasks. Geographic impact is centered in Illinois, where IIT Research Institute is located. Workforce implications include employment for scientists, engineers, and research support staff.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type may lead to higher costs if not managed diligently.
- Limited competition (2 bidders) might have resulted in less favorable pricing.
- The specific 'TECHNICAL AREA TASKS' are not detailed, making it hard to assess the scope and complexity.
- The contract duration of 911 days is substantial, requiring sustained oversight.
Positive Signals
- Awarded under full and open competition, allowing any qualified vendor to bid.
- The contractor, IIT Research Institute, is likely experienced in R&D.
- The contract supports critical research and development for the Department of Defense.
Sector Analysis
This contract falls within the Research and Development sector, specifically under the North American Industry Classification System (NAICS) code 541710 for Research and Development in the Physical, Engineering, and Life Sciences. This sector is characterized by innovation and specialized expertise. The Department of Defense is a major investor in R&D, often contracting with research institutes and private firms to maintain technological superiority. The $18.5 million award is a moderate-sized contract within this domain, reflecting a specific research need rather than a large-scale development program.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the scope of work was likely considered too large or specialized for small business participation as prime contractors, or that the competition was open to all qualified entities. Consequently, the primary contractor is likely a larger entity, and any subcontracting opportunities for small businesses would depend on the prime contractor's strategy and the nature of the R&D tasks.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the technical point of contact within the Department of the Air Force. The Cost Plus Fixed Fee (CPFF) structure necessitates robust financial oversight to ensure costs are reasonable and allocable to the contract. Transparency is generally maintained through contract reporting systems, but detailed public access to R&D specifics can be limited due to national security or proprietary concerns. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Department of Defense Research and Development Contracts
- Scientific and Technical Services
- Engineering Services
- Physical Sciences Research
- Life Sciences Research
Risk Flags
- Limited Competition
- Cost Plus Fixed Fee Contract Type
- Lack of Specific Technical Task Details
Tags
research-and-development, department-of-defense, department-of-the-air-force, cost-plus-fixed-fee, full-and-open-competition, illinois, moderate-size-contract, technical-area-tasks, scientific-research
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $18.5 million to IIT RESEARCH INSTITUTE. TECHNICAL AREA TASKS
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 $18.5 million.
What is the period of performance?
Start: 2009-09-30. End: 2012-03-29.
What specific 'TECHNICAL AREA TASKS' were performed under this contract?
The provided data abbreviates 'TECHNICAL AREA TASKS' as 'd'. Without further details, it is impossible to specify the exact nature of the research and development conducted. This could range from fundamental scientific inquiry to applied engineering solutions within the physical, engineering, and life sciences. Understanding these tasks is crucial for evaluating the contract's relevance, the contractor's performance, and the overall value derived from the $18.5 million investment. Further investigation into contract line item numbers (CLINs) or associated documentation would be necessary to ascertain the precise technical scope.
How does the $18.5 million contract value compare to similar R&D efforts by the Department of Defense?
The $18.5 million contract value for R&D services over approximately 2.5 years is a moderate investment. The Department of Defense funds a vast array of R&D projects, with values ranging from small, targeted studies to multi-billion dollar programs. To benchmark this specific contract, one would need to compare it against other contracts awarded for similar technical areas (physical, engineering, and life sciences) and similar contract types (Cost Plus Fixed Fee) within the DoD. Factors like the duration, the specific research objectives, and the contractor's expertise would influence comparability. Without access to a broader dataset of comparable contracts, it's difficult to definitively state if $18.5 million represents a high, low, or average expenditure for the services rendered.
What is the track record of IIT Research Institute with the Department of Defense?
IIT Research Institute (IITRI) has a long history of performing research and development for various government agencies, including the Department of Defense. While specific details of their past performance on this particular $18.5 million contract are not provided in the summary data, IITRI is generally recognized as a capable research organization. Their track record would typically be assessed based on factors such as on-time delivery, quality of research outcomes, adherence to budget (especially relevant for CPFF contracts), and overall customer satisfaction reported in past performance evaluations. A deeper dive into historical contract awards and performance reviews for IITRI within the DoD would offer a more comprehensive view of their reliability and expertise.
What are the potential risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D?
Cost Plus Fixed Fee (CPFF) contracts, like the one awarded to IIT Research Institute, are common for R&D where the scope may evolve or be difficult to define precisely upfront. The primary risk for the government is that the contractor may have less incentive to control costs compared to fixed-price contracts, as the fee is fixed regardless of the final cost. If costs escalate significantly, the total contract value could exceed initial expectations. Effective oversight, detailed cost accounting, and clear definition of allowable costs are critical to mitigate these risks. The government must diligently monitor expenditures to ensure they are reasonable, allocable, and necessary for contract performance.
How does the limited competition (2 bidders) impact the government's ability to secure competitive pricing?
When a contract receives only two bids, even under full and open competition, it suggests a potentially constrained market for the specific goods or services required. This limited competition can reduce the downward pressure on pricing that typically occurs with a larger number of bidders vying for the contract. While the government still benefits from some level of comparison, the absence of broader participation means that the pricing may not reflect the most competitive rates achievable in a more robustly contested environment. This could translate to higher costs for taxpayers compared to scenarios with multiple, strong bids.
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)
Contractor Details
Address: 10 WEST 35TH STREET, CHICAGO, IL, 60616
Business Categories: Category Business, Nonprofit Organization, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $18,534,319
Exercised Options: $18,534,319
Current Obligation: $18,530,691
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N6133903D0300
IDV Type: IDC
Timeline
Start Date: 2009-09-30
Current End Date: 2012-03-29
Potential End Date: 2012-03-29 00:00:00
Last Modified: 2021-04-01
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