GSA awards $220M R&D contract for Phoenix Test Apparatus, with a 2067-day performance period

Contract Overview

Contract Amount: $220,125,309 ($220.1M)

Contractor: Integration Innovation Inc

Awarding Agency: General Services Administration

Start Date: 2018-09-19

End Date: 2024-05-17

Contract Duration: 2,067 days

Daily Burn Rate: $106.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: R&D

Official Description: THIS TASK ORDER PROVIDES DESIGN, DEVELOPMENT, ENGINEERING AND INTEGRATION, TESTING, AND SYSTEM CHECKOUT OF ALL SYSTEM COMPONENTS AND SUBSYSTEMS OF THE PHOENIX TEST APPARATUS. THE SCOPE INCLUDES FINAL DEMONSTRATION OF THE INTEGRATED TEST CAPABILITY TO ENSURE THE CAPABILITY MEETS THE OVERALL OPERATIONAL METRICS DEFINED IN THE TO.

Place of Performance

Location: ARNOLD AFB, COFFEE County, TENNESSEE, 37389

State: Tennessee Government Spending

Plain-Language Summary

General Services Administration obligated $220.1 million to INTEGRATION INNOVATION INC for work described as: THIS TASK ORDER PROVIDES DESIGN, DEVELOPMENT, ENGINEERING AND INTEGRATION, TESTING, AND SYSTEM CHECKOUT OF ALL SYSTEM COMPONENTS AND SUBSYSTEMS OF THE PHOENIX TEST APPARATUS. THE SCOPE INCLUDES FINAL DEMONSTRATION OF THE INTEGRATED TEST CAPABILITY TO ENSURE THE CAPABILITY MEETS T… Key points: 1. Contract focuses on design, development, integration, and testing of complex test apparatus. 2. Significant investment in research and development for advanced physical and engineering sciences. 3. Performance period of nearly six years suggests a long-term, complex project. 4. Contract type is Cost Plus Award Fee, incentivizing performance but requiring careful oversight. 5. The scope includes final demonstration of integrated test capability against operational metrics. 6. This contract falls under the R&D in Physical, Engineering, and Life Sciences category.

Value Assessment

Rating: fair

The contract value of $220.1 million over approximately 2067 days (nearly 6 years) indicates a substantial investment. Benchmarking this against similar R&D contracts for complex apparatus is challenging without more specific details on the technology. The Cost Plus Award Fee (CPAF) structure allows for cost reimbursement plus a fee based on performance, which can lead to higher overall costs if performance targets are aggressively met or if the base fee is high. Without access to the award fee criteria and historical performance data, a precise value-for-money assessment is difficult, but the long duration and specialized nature suggest a potentially high but justifiable cost.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was intended to be open, certain sources were excluded, potentially limiting the pool of bidders. The specific reasons for exclusion are not detailed, but this approach can sometimes lead to less competitive pricing compared to truly full and open competition. Further analysis would be needed to understand the justification for excluding other potential sources.

Taxpayer Impact: Excluding sources, even with an initial open competition intent, may limit price discovery and potentially result in higher costs for taxpayers compared to a scenario with a broader range of bidders.

Public Impact

The primary beneficiaries are likely government research institutions and defense agencies requiring advanced testing capabilities. Services delivered include critical design, development, integration, and testing of specialized apparatus. The geographic impact is primarily tied to the contractor's facilities and the end-user's location, likely within the US. Workforce implications include highly skilled engineers, scientists, and technicians involved in advanced R&D and testing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition due to exclusion of sources could impact overall cost-effectiveness.
Cost Plus Award Fee contracts require robust oversight to ensure fair pricing and prevent cost overruns.
The long performance period increases the risk of scope creep or evolving requirements impacting budget.
Lack of detailed technical specifications in the provided data makes independent assessment of R&D value difficult.

Positive Signals

Contract awarded to Integration Innovation Inc., suggesting a potentially established relationship or expertise.
The R&D focus indicates investment in cutting-edge technology and scientific advancement.
The comprehensive scope covers the full lifecycle from design to final testing, ensuring integrated development.
The award fee structure, if well-managed, can incentivize high performance and successful project outcomes.

Sector Analysis

This contract falls within the Research and Development in the Physical, Engineering, and Life Sciences sector, specifically NAICS code 541712. This sector is characterized by innovation and the development of new technologies and scientific applications. The market size for such specialized R&D can be substantial, particularly when driven by government needs in areas like defense, aerospace, and advanced manufacturing. Comparable spending benchmarks would typically involve other large-scale R&D efforts for complex systems or scientific equipment, often awarded through competitive processes to specialized firms.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this specific contract. This suggests the contract was awarded based on technical capability and full and open competition principles (albeit with source exclusions). There is no explicit mention of subcontracting goals for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem appears minimal for this prime contract, though the prime contractor may engage small businesses for specific components or services.

Oversight & Accountability

Oversight for this Cost Plus Award Fee contract would primarily fall under the General Services Administration (GSA), specifically the Federal Acquisition Service. Robust oversight mechanisms would be crucial to monitor costs, evaluate performance against award fee criteria, and ensure the contractor is meeting the defined operational metrics. Transparency would be enhanced through regular reporting requirements and potentially through the GSA's Inspector General's office, which could conduct audits or investigations if performance or cost concerns arise.

Related Government Programs

Advanced Technology Development Programs
Research and Development Contracts
Test and Evaluation Services
Engineering and Integration Services
Government-funded Scientific Research

Risk Flags

Potential for cost overruns due to CPAF structure.
Risk of requirement changes over the long contract duration.
Limited competition due to source exclusion may impact price.
Need for robust technical oversight due to R&D nature.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $220.1 million to INTEGRATION INNOVATION INC. THIS TASK ORDER PROVIDES DESIGN, DEVELOPMENT, ENGINEERING AND INTEGRATION, TESTING, AND SYSTEM CHECKOUT OF ALL SYSTEM COMPONENTS AND SUBSYSTEMS OF THE PHOENIX TEST APPARATUS. THE SCOPE INCLUDES FINAL DEMONSTRATION OF THE INTEGRATED TEST CAPABILITY TO ENSURE THE CAPABILITY MEETS THE OVERALL OPERATIONAL METRICS DEFINED IN THE TO.

Who is the contractor on this award?

The obligated recipient is INTEGRATION INNOVATION INC.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $220.1 million.

What is the period of performance?

Start: 2018-09-19. End: 2024-05-17.

What is the specific nature of the 'Phoenix Test Apparatus' and its intended use?

The provided data describes the Phoenix Test Apparatus as a system requiring design, development, engineering, integration, testing, and checkout of its components and subsystems. Its ultimate purpose is to demonstrate integrated test capability against defined operational metrics. While the exact application is not specified, the R&D focus (NAICS 541712) and the substantial investment suggest it is likely for a critical or advanced government function, potentially in defense, aerospace, or scientific research, where precise and reliable testing of complex systems is paramount. The name 'Phoenix' might imply a revival, upgrade, or development of a new generation of testing equipment.

How does the Cost Plus Award Fee (CPAF) structure typically impact contractor performance and cost compared to other contract types?

A Cost Plus Award Fee (CPAF) contract reimburses the contractor for allowable costs and provides a base fee plus an award fee. The award fee is determined by the government based on performance against pre-defined criteria. This structure incentivizes the contractor to exceed minimum performance standards to earn a higher fee, potentially leading to better outcomes than a simple cost-plus contract. However, it also requires significant government effort in defining objective performance metrics and evaluating performance fairly. Compared to fixed-price contracts, CPAF generally carries higher cost risk for the government, as costs are reimbursed. Compared to Cost Plus Incentive Fee (CPIF), the award fee is more subjective and relies heavily on the government's evaluation, potentially leading to disputes if not managed carefully. The government aims for superior performance, but the potential for higher total costs necessitates diligent oversight.

What are the potential risks associated with a contract duration of over 2000 days?

A contract duration of 2067 days (approximately 5.6 years) presents several risks. Firstly, the 'long pole' nature of the project increases the likelihood of requirement changes due to evolving technology, user needs, or strategic shifts within the government. Managing scope creep effectively becomes critical. Secondly, economic uncertainties over such a long period can impact material costs and labor rates, potentially leading to budget overruns if not adequately addressed through contract clauses. Thirdly, maintaining contractor focus and performance consistency over an extended period can be challenging; the award fee mechanism is intended to mitigate this, but requires sustained government engagement. Finally, the risk of key personnel turnover within the contractor organization increases, potentially impacting institutional knowledge and project continuity.

What does 'Full and Open Competition After Exclusion of Sources' imply for the bidding process and potential outcomes?

This contract clause, 'Full and Open Competition After Exclusion of Sources,' presents a nuanced approach to competition. It suggests that the initial intent was to solicit offers from all responsible sources. However, specific sources were identified and excluded from the bidding process. The justification for such exclusions typically relates to factors like proprietary data, existing unique capabilities, or specific national security concerns. While it aims to leverage existing capabilities or protect sensitive information, this exclusion inherently limits the competitive pool. Consequently, the number of bidders may be reduced, potentially leading to less aggressive pricing than if all potential sources were allowed to compete. The government must provide a clear justification for any source exclusion to ensure fairness and maximize value.

How does the R&D classification (NAICS 541712) typically influence contract oversight and performance metrics?

Contracts classified under NAICS 541712 (Research and Development in the Physical, Engineering, and Life Sciences) often involve a high degree of uncertainty and innovation. This influences oversight by requiring a focus on progress and technical milestones rather than strictly defined deliverables, especially in early stages. Performance metrics are often qualitative, focusing on achieving scientific breakthroughs, developing prototypes, or demonstrating proof-of-concept, rather than adherence to rigid specifications. For a CPAF contract like this, the award fee criteria would likely be tied to achieving specific research goals, overcoming technical challenges, timely reporting of findings, and effective collaboration. Oversight must be technically adept, allowing flexibility for the research process while ensuring accountability and preventing cost overruns through diligent monitoring of expenditures and progress.

What is the significance of the $106,495 'br' value mentioned in the data?

The value 'br': 106495 likely represents the 'base rate' or a similar foundational cost component associated with the contract, possibly related to the initial setup, fixed overhead, or a minimum guaranteed cost before performance-based award fees are applied. In a Cost Plus Award Fee (CPAF) structure, understanding the base fee or base rate is crucial as it forms the foundation upon which the award fee is calculated. It helps in analyzing the total potential cost and the government's leverage in incentivizing performance. Without further context, it's difficult to pinpoint its exact role, but it's a component of the overall cost structure that influences the total contract value and the contractor's potential earnings.

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 › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 689 DISCOVERY DR NW, HUNTSVILLE, AL, 35806

Business Categories: Category Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $246,992,430

Exercised Options: $246,992,430

Current Obligation: $220,125,309

Actual Outlays: $-1,812,971

Subaward Activity

Number of Subawards: 2678

Total Subaward Amount: $6,027,932,839

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q14OADS416

IDV Type: IDC

Timeline