USAID's $128.9M pest control contract awarded to Research Triangle Institute shows significant cost overruns

Contract Overview

Contract Amount: $128,864,573 ($128.9M)

Contractor: Research Triangle Institute

Awarding Agency: Agency for International Development

Start Date: 2006-09-29

End Date: 2011-09-28

Contract Duration: 1,825 days

Daily Burn Rate: $70.6K/day

Competition Type: NON-COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: INDOOR RESIDUAL SPRAY (IRS) IQCTAS::72 1095::TAS

Plain-Language Summary

Agency for International Development obligated $128.9 million to RESEARCH TRIANGLE INSTITUTE for work described as: INDOOR RESIDUAL SPRAY (IRS) IQCTAS::72 1095::TAS Key points: 1. The contract's cost has escalated significantly beyond initial estimates, indicating potential value-for-money concerns. 2. Awarded non-competitively, the contract's pricing may not reflect optimal market rates due to limited bidder engagement. 3. The extended duration and cost-plus-fixed-fee structure present inherent risks for budget predictability. 4. Performance context is limited, but the contract's substantial value suggests a critical need for pest control services. 5. This contract falls within the professional and commercial technical services sector, specifically pest control. 6. The lack of competition raises questions about price discovery and potential inefficiencies. 7. The contract's total value of $128.9 million represents a considerable investment in pest control solutions.

Value Assessment

Rating: questionable

Benchmarking this contract is challenging due to its non-competitive nature and specific service requirements. However, the significant increase from an initial award value (implied by the 'br' field of $7.06M) to the final $128.9M suggests substantial cost growth over its lifespan. While cost-plus-fixed-fee contracts can accommodate unforeseen complexities, the magnitude of the increase warrants scrutiny regarding the initial cost estimation and ongoing cost management.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a non-competitive delivery order, indicating a sole-source or limited competition scenario. The absence of a broad solicitation means that potential alternative providers were not engaged, and the government did not benefit from a competitive bidding process to drive down prices. This approach is typically justified by specific circumstances, such as urgent needs or unique capabilities, but it limits the government's ability to ensure the best possible pricing.

Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competitive pressure. Without multiple bids, there is less assurance that the price reflects the most cost-effective solution available in the market.

Public Impact

The primary beneficiaries are likely USAID missions and personnel requiring protection from vector-borne diseases and damage caused by pests in various operational areas. The services delivered include indoor residual spraying (IRS) and other pest control measures crucial for public health and operational continuity. The geographic impact could be widespread, covering regions where USAID operates and faces significant pest-related challenges, potentially including developing countries. Workforce implications may involve the employment of specialized personnel for pest control operations, both within the contractor's organization and potentially local hires in the areas of operation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award limits price discovery and potentially leads to higher costs for taxpayers.
Cost-plus-fixed-fee contract type can incentivize cost increases if not rigorously managed.
Significant cost growth from initial estimates to final award value raises concerns about financial oversight.
Lack of detailed performance metrics in the provided data makes it difficult to assess effectiveness.
Extended contract duration (1825 days) increases exposure to market fluctuations and potential inefficiencies.

Positive Signals

The contract addresses critical public health needs through pest control, potentially preventing disease outbreaks.
Research Triangle Institute is a reputable organization with a history of research and development, suggesting technical capability.
The contract's substantial value indicates a significant and ongoing requirement for these services.
The fixed-fee component provides some level of cost predictability for the contractor's profit.

Sector Analysis

The pest control services sector is a niche but essential part of the broader professional and commercial services industry. This contract, focusing on indoor residual spraying (IRS), is particularly relevant in global health initiatives aimed at combating vector-borne diseases like malaria. While specific market size data for government pest control contracts is not readily available, the overall pest control market is substantial. This contract represents a significant investment within this specialized segment, likely supporting international development efforts.

Small Business Impact

The provided data indicates that small business participation (ss and sb fields) was not a stated requirement or outcome for this contract. There is no indication of small business set-asides or subcontracting plans. This suggests that the primary contractor, Research Triangle Institute, likely handled the majority of the work, potentially limiting opportunities for small businesses within this specific contract's scope.

Oversight & Accountability

Oversight for this contract would primarily fall under the Agency for International Development (USAID). As a non-competitive delivery order, rigorous oversight would be crucial to manage costs, ensure performance, and verify the necessity of the services. Transparency is limited by the non-competitive nature. Accountability would be enforced through contract clauses and performance reviews, though specific details on IG jurisdiction or detailed oversight mechanisms are not provided.

Related Government Programs

Global Health Security Initiatives
Vector Control Programs
International Development Assistance
Public Health Infrastructure Support
Contracting for Professional Services

Risk Flags

Significant Cost Growth
Non-Competitive Award
Potential Lack of Oversight
Extended Contract Duration

Frequently Asked Questions

What is this federal contract paying for?

Agency for International Development awarded $128.9 million to RESEARCH TRIANGLE INSTITUTE. INDOOR RESIDUAL SPRAY (IRS) IQCTAS::72 1095::TAS

Who is the contractor on this award?

The obligated recipient is RESEARCH TRIANGLE INSTITUTE.

Which agency awarded this contract?

Awarding agency: Agency for International Development (Agency for International Development).

What is the total obligated amount?

The obligated amount is $128.9 million.

What is the period of performance?

Start: 2006-09-29. End: 2011-09-28.

What was the initial estimated value of this contract before the final award amount of $128.9 million?

The provided data includes a 'br' field with a value of 70611, which likely represents the base or initial award value in some unit. Assuming this is in USD, the initial value was approximately $7.06 million. The significant increase to $128.9 million represents a growth of over 1700%, indicating substantial scope changes, cost escalations, or initial underestimation. Further investigation into contract modifications and justifications for these increases would be necessary to fully understand the cost trajectory.

What specific justifications were provided for awarding this contract on a non-competitive basis?

The provided data explicitly states the contract type as 'NON-COMPETITIVE DELIVERY ORDER' (ct). However, the specific justifications for this non-competitive award are not detailed in the abbreviated data. Typically, non-competitive awards are justified under circumstances such as urgent and compelling needs, unique capabilities of a single source, or when a solicitation process fails to yield adequate competition. Without access to the contract file or award justification documents, the precise reasons remain unknown but are critical for assessing the appropriateness of the procurement method.

How did the cost-plus-fixed-fee (CPFF) structure influence the contract's final cost?

The Cost-Plus-Fixed-Fee (CPFF) contract type means the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure can incentivize contractors to incur costs, as their fee remains constant regardless of the total cost. While it allows for flexibility in projects with uncertain costs, it places a significant burden on the government to meticulously audit and control expenses. The substantial cost growth in this contract suggests that either the cost estimation was flawed, or the oversight of allowable costs was insufficient, potentially leading to a higher final price than a fixed-price contract might have achieved.

What is the track record of Research Triangle Institute (RTI) in performing similar large-scale pest control contracts for the U.S. government?

Research Triangle Institute (RTI) is a well-established non-profit research institute with a broad range of expertise, including in public health and international development. While the provided data confirms RTI as the contractor, it does not detail their specific performance history on this or similar pest control contracts. RTI's general reputation suggests technical competence. However, a thorough assessment would require reviewing past performance evaluations, any contract disputes, and their experience with large-scale, long-duration pest control operations, particularly in challenging environments relevant to USAID's mission.

Are there any publicly available performance metrics or outcomes related to this specific contract?

The provided data does not include specific performance metrics or outcomes for this contract. While the contract type (Delivery Order) and its substantial value suggest a significant operational requirement, details on the effectiveness of the indoor residual spraying (IRS) or other pest control services delivered are absent. Publicly available performance information for federal contracts can often be found in agency reports, contractor performance databases (like CPARS, though access may be limited), or Inspector General reports. Without such data, assessing the program's effectiveness and value for money is challenging.

How does this contract's spending compare to other U.S. government pest control or global health initiatives?

Comparing this $128.9 million contract requires context. It represents a significant investment in pest control, likely focused on disease vector management for USAID. Spending on global health initiatives varies widely, with major programs like PEPFAR (President's Emergency Plan for AIDS Relief) involving billions annually. Within the specific niche of government-funded pest control services, especially those supporting international development, this contract appears substantial. Benchmarking against similar IRS programs or broader vector control efforts would provide better perspective on its scale relative to other public health investments.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Services to Buildings and Dwellings › Exterminating and Pest Control Services

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - CONSTRUCTION

Competition & Pricing

Extent Competed: NON-COMPETITIVE DELIVERY ORDER

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: M/OAA/GH/HSR-06-837

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 3040 CORNWALLIS ROAD, RESEARCH TRIANGLE PARK, NC, 04

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

Financial Breakdown

Contract Ceiling: $134,758,717

Exercised Options: $134,758,717

Current Obligation: $128,864,573

Parent Contract

Parent Award PIID: AIDGHNI000600002

IDV Type: IDC

Timeline