DoD's $24.8M contract for electronics R&D awarded to Syracuse Research Corp. shows potential value concerns

Contract Overview

Contract Amount: $24,825,842 ($24.8M)

Contractor: SRC Inc

Awarding Agency: Department of Defense

Start Date: 2002-06-04

End Date: 2008-09-30

Contract Duration: 2,310 days

Daily Burn Rate: $10.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200209!003258!2100!AB07 !USA COMMUNICATIONS-ELECTRONICS !DAAB0702CP009 !A!N! !N! !20020604!20020625!063053771!063053771!063053771!N!SYRACUSE RESEARCH CORPORATION !6225 RUNNING RIDGE ROAD !NORTH SYRACUSE !NY!13212!53660!067!36!NORTH SYRACUSE !ONONDAGA !NEW YORK !+000002385995!N!N!000000000000!AC61!RDTE/ELECTRONICS & COMMUNICATION EQ-BASIC RESEARCH!A7 !ELECTRONICS AND COMMUNICATION !1000!NOT DISCERNABLE OR CLASSIFIED !541330!E! !3! ! ! ! ! !99990909!B! ! !N!Z!A!N!U!2!001!B! !Z!N!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!B!N! ! ! ! ! ! !0001!

Place of Performance

Location: SYRACUSE, ONONDAGA County, NEW YORK, 13212

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $24.8 million to SRC INC for work described as: 200209!003258!2100!AB07 !USA COMMUNICATIONS-ELECTRONICS !DAAB0702CP009 !A!N! !N! !20020604!20020625!063053771!063053771!063053771!N!SYRACUSE RESEARCH CORPORATION !6225 RUNNING RIDGE ROAD !NORTH SYRACUSE !NY!13212!53660!067!36!NORTH SYRACUSE !ONOND… Key points: 1. The contract's cost-plus-fixed-fee structure may incentivize cost overruns. 2. Limited competition data makes it difficult to assess true market value. 3. The contract duration of over 4 years suggests a long-term need for these services. 4. The award to a single entity warrants scrutiny regarding competitive fairness. 5. The 'Engineering Services' NAICS code is broad, potentially masking specific R&D activities. 6. The lack of small business set-aside raises questions about broader economic participation.

Value Assessment

Rating: questionable

The total award amount of $24.8 million over approximately 4 years for 'Engineering Services' in R&D is difficult to benchmark without more specific details on the services rendered. The cost-plus-fixed-fee (CPFF) contract type, while common for R&D, can lead to higher costs compared to fixed-price contracts if not managed tightly. Without comparable contracts for similar basic research in electronics and communication equipment, assessing value for money is challenging. The absence of detailed performance metrics or deliverables in the provided data limits a thorough value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition,' indicating that all responsible sources were permitted to submit offers. However, the data does not specify the number of bids received or the evaluation process. A full and open competition is generally preferred for ensuring fair pricing and access to a wide range of capabilities. The lack of further details on the competitive landscape prevents a deeper analysis of how this competition influenced price discovery.

Taxpayer Impact: While full and open competition is a positive indicator for taxpayer value, the absence of specific bid counts and awardee selection rationale makes it hard to definitively state the extent of savings achieved for taxpayers.

Public Impact

The primary beneficiary is the Department of Defense, which receives advanced electronics and communication research. The contract supports research and development in electronics and communication equipment, potentially leading to technological advancements. The geographic impact is centered in New York, specifically Syracuse and Onondaga County, supporting local economic activity. The contract likely supports a specialized workforce in engineering and research within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contract type may lead to higher costs than fixed-price alternatives.
Limited transparency on the number of bidders and evaluation criteria hinders full assessment of competition.
Broad NAICS code (541330) makes it difficult to ascertain the precise nature and value of the R&D services.
Long contract duration (over 4 years) could indicate potential for scope creep or cost escalation if not managed effectively.

Positive Signals

Awarded under 'Full and Open Competition,' suggesting a broad search for qualified contractors.
The contract supports critical R&D for national defense in electronics and communication.
The contractor, Syracuse Research Corporation, is a known entity in research and development.
The contract is managed by the Defense Contract Management Agency, indicating established oversight processes.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), specifically focusing on Research and Development (RDTE) for electronics and communication equipment. The defense R&D market is characterized by long development cycles, high technical complexity, and significant government investment. Comparable spending benchmarks are difficult to establish without knowing the specific research objectives, but R&D contracts often represent a substantial portion of the defense budget, driving innovation in critical technologies.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss=false, sb=false). This suggests that the primary award went to a larger entity or that the competition was open to all sizes without specific small business preferences. There is no information provided regarding subcontracting plans or actual performance related to small business participation, making it difficult to assess the impact on the small business ecosystem for this specific award.

Oversight & Accountability

The contract is managed by the Defense Contract Management Agency (DCMA), which provides contract administration and oversight. The contract type (CPFF) implies that costs will be reviewed and audited. However, the provided data lacks specifics on performance monitoring, reporting requirements, or the involvement of Inspector General offices. Transparency regarding the oversight mechanisms and accountability measures for this specific R&D contract is limited based on the available information.

Related Government Programs

Department of Defense Research and Development Contracts
Electronics and Communication Equipment Procurement
Engineering Services Contracts
Cost-Plus-Fixed-Fee Contracts
Defense Contract Management Agency Administered Contracts

Risk Flags

Potential for cost overruns due to CPFF structure
Limited transparency on competition details
Broad scope definition (NAICS 541330)
Lack of specific performance metrics in data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.8 million to SRC INC. 200209!003258!2100!AB07 !USA COMMUNICATIONS-ELECTRONICS !DAAB0702CP009 !A!N! !N! !20020604!20020625!063053771!063053771!063053771!N!SYRACUSE RESEARCH CORPORATION !6225 RUNNING RIDGE ROAD !NORTH SYRACUSE !NY!13212!53660!067!36!NORTH SYRACUSE !ONONDAGA !NEW YORK !+000002385995!N!N!000000000000!AC61!RDTE/ELECTRONICS & COMMUNICATION EQ-BASIC RESEARCH!A7 !ELECTRONICS AND COMMUNICATION !1000!NOT DISCERNABLE OR CLASSIFIED !541330!E! !3! ! ! ! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is SRC INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $24.8 million.

What is the period of performance?

Start: 2002-06-04. End: 2008-09-30.

What specific research and development activities were undertaken under this contract?

The provided data classifies the contract under 'RDTE/ELECTRONICS & COMMUNICATION EQ-BASIC RESEARCH' and NAICS code 541330 (Engineering Services). However, it does not detail the specific research objectives, experiments, or technological advancements pursued. Basic research in this domain could encompass a wide range of activities, from fundamental materials science for electronic components to advanced signal processing algorithms or novel communication protocols. Without further documentation, the precise nature of the R&D remains unspecified, making it difficult to assess its direct impact or innovation.

How does the $24.8 million award compare to similar R&D contracts for electronics and communication equipment within the DoD?

Benchmarking this $24.8 million contract against similar DoD R&D efforts is challenging due to the limited specificity of the contract description. The duration of over four years (June 2002 to September 2008) suggests a significant undertaking. However, without knowing the exact scope, deliverables, and technological maturity targeted, direct comparisons are difficult. DoD R&D spending varies widely, from small, focused exploratory projects to large, multi-year programs. This contract appears to be a mid-to-large size award for basic research within its category, but its relative value can only be truly assessed against contracts with highly similar objectives and technical scopes.

What are the key risks associated with a Cost Plus Fixed Fee (CPFF) contract for basic research?

The primary risk with a CPFF contract, especially for basic research where outcomes are inherently uncertain, is the potential for cost overruns. While the 'fixed fee' provides the contractor with a defined profit margin, the 'cost plus' element means the government reimburses all allowable costs incurred. If the research proves more complex or time-consuming than initially estimated, the total cost to the government can escalate significantly beyond initial projections. This structure can also reduce the contractor's incentive to control costs rigorously, as their fee is fixed regardless of the final expenditure. Effective government oversight is crucial to mitigate these risks by closely monitoring allowable costs and ensuring efficient resource utilization.

What was the track record of Syracuse Research Corporation (SRC Inc.) with DoD contracts prior to this award?

Syracuse Research Corporation (SRC Inc.) has a history of contracting with the Department of Defense. While the provided data snippet focuses on this specific $24.8 million contract, SRC is known for its work in various defense-related R&D areas, including electronics, sensors, and communications. A comprehensive analysis would require examining SRC's broader contract portfolio, including past performance ratings, any history of cost overruns or performance issues on previous DoD contracts, and their overall success rate in delivering on R&D objectives. This specific contract's award suggests they met the requirements for this particular R&D effort at the time of selection.

How has spending on 'Electronics and Communication' R&D by the DoD evolved since this contract was awarded?

Since the award of this contract in 2002, DoD spending on 'Electronics and Communication' R&D has likely seen significant evolution, driven by rapid technological advancements and changing geopolitical landscapes. Budgets for R&D are subject to annual appropriations and strategic priorities. Areas such as artificial intelligence, cybersecurity, advanced networking, and next-generation communication systems have become increasingly prominent. While specific figures require detailed budget analysis, it's reasonable to assume that overall investment in this sector has continued, potentially shifting focus towards more advanced and integrated technologies beyond the scope of basic research prevalent in the early 2000s.

What is the significance of the 'AC61' Product Service Code (PSC) in understanding this contract's scope?

The Product Service Code (PSC) 'AC61' corresponds to 'Defense Communications, Electronic Equipment, and Components - Research and Development'. This code specifically categorizes the contract's focus on the research and development aspects of defense communication and electronic systems. It helps narrow down the contract's purpose within the broader 'Engineering Services' NAICS code, indicating that the work is not for procurement of existing equipment or routine maintenance, but rather for innovation and advancement in this technological domain. This PSC is crucial for understanding the contract's alignment with DoD's strategic goals for technological superiority in communications and electronics.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Address: 6225 RUNNING RIDGE ROAD, NORTH SYRACUSE, NY, 13212

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline