DoD awards $877M R&D contract to New Mexico State University for missile and space systems engineering

Contract Overview

Contract Amount: $94,126,018 ($94.1M)

Contractor: NEW Mexico State University

Awarding Agency: Department of Defense

Start Date: 2001-08-23

End Date: 2012-09-30

Contract Duration: 4,056 days

Daily Burn Rate: $23.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: R&D

Official Description: 200112!001044!2100!AD17 !USA MATERIEL COMMAND ACQUISITION!DATM0501C0026 !A!N!*!N!P00001 !20010823!20210814!877477604!877477604!861367373!N!NEW MEXICO STATE UNIVERSITY !CORNERS OF STEWART AND ESP!LAS CRUCES !NM!88003!84880!013!35!WHITE SANDS MSL RGE !DONA ANA !NEW MEXICO!+000001200000!N!N!000000000000!AC25!RDTE/MISSILE AND SPACE SYSTEMS-ENG/MANUF DEVEL !C9E!ALL OTHER SUPPLIES AND EQUIPME!1000!NOT DISCERNABLE OR CLASSIFIED !541710!*!*!3! ! ! !*!*!*!B!*!*!A! !A !N!S!2!001!K! !C!N!Z! ! !N!U!N! ! ! ! ! !F!A!000!A!C!N! ! ! ! ! ! !0001!

Place of Performance

Location: WHITE SANDS MISSILE RANGE, DOÑA ANA County, NEW MEXICO, 88002, UNITED STATES OF AMERICA

State: New Mexico Government Spending

Plain-Language Summary

Department of Defense obligated $94.1 million to NEW MEXICO STATE UNIVERSITY for work described as: 200112!001044!2100!AD17 !USA MATERIEL COMMAND ACQUISITION!DATM0501C0026 !A!N!*!N!P00001 !20010823!20210814!877477604!877477604!861367373!N!NEW MEXICO STATE UNIVERSITY !CORNERS OF STEWART AND ESP!LAS CRUCES !NM!88003!84880!013!35!WHITE SANDS MSL RGE !DONA ANA !NEW MEXICO!+00000120… Key points: 1. Contract focuses on research and development for missile and space systems, indicating a need for advanced technological solutions. 2. The significant award value suggests a long-term, high-priority project within the Department of Defense. 3. Performance is located in New Mexico, potentially impacting the local economy and workforce in the defense sector. 4. The contract type, 'Cost No Fee', implies that the contractor is reimbursed for allowable costs, with no fee, which can be a risk for the government if costs are not well-managed. 5. The primary contractor, New Mexico State University, suggests a focus on academic research and development capabilities. 6. The contract duration of over 10 years highlights the strategic importance and complexity of the research objectives.

Value Assessment

Rating: fair

The contract value of approximately $877 million over a 10-year period is substantial. Without specific deliverables or performance metrics, it is difficult to benchmark value for money. The 'Cost No Fee' contract type means the government bears the risk of cost overruns, and the contractor has less incentive to control expenses compared to fixed-price contracts. Further analysis would require understanding the specific research objectives and expected outcomes.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources'. This specific designation suggests that while competition was sought, certain sources were excluded, potentially limiting the pool of bidders. The exact reasons for exclusion are not detailed, but it implies a structured competitive process that still aimed for broad participation within defined parameters.

Taxpayer Impact: While competition was sought, the exclusion of certain sources may have limited the potential for the most competitive pricing. Taxpayers benefit from a structured competition, but the extent of cost savings is uncertain without knowing the nature of the exclusions.

Public Impact

The primary beneficiary is the Department of Defense, which will receive advanced research and development for missile and space systems. The contract supports the development of critical technologies that could enhance national security and defense capabilities. New Mexico State University, as the contractor, will benefit from significant funding for its research programs and facilities. The contract is likely to create or sustain high-skilled jobs in research, engineering, and technical fields within New Mexico. The geographic impact is concentrated in Las Cruces, New Mexico, where the university is located, potentially boosting the local economy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Cost No Fee' structure places the financial risk of cost overruns on the government, requiring robust oversight.
The long duration of the contract necessitates continuous monitoring to ensure research stays on track and remains relevant.
Limited details on specific deliverables make it challenging to assess the contractor's performance and value realization.
The 'Exclusion of Sources' aspect of the competition warrants further investigation to understand its impact on overall cost-effectiveness.

Positive Signals

Award to a university suggests a focus on cutting-edge research and innovation.
The substantial funding indicates a high level of confidence in the contractor's capabilities for complex R&D.
The contract's focus on missile and space systems aligns with critical national defense priorities.
Performance in New Mexico may foster regional expertise in advanced defense technologies.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on missile and space systems. This is a highly specialized area within the broader aerospace and defense industry. The market for such R&D is often characterized by significant government investment, long development cycles, and the need for highly specialized expertise. Comparable spending benchmarks would typically be found within other large-scale defense R&D contracts for advanced weapon systems or space exploration technologies.

Small Business Impact

This contract does not appear to have a specific small business set-aside. Given the nature of advanced R&D in missile and space systems, it is likely that the prime contract is awarded to an entity with specialized capabilities, such as a university research center. Subcontracting opportunities for small businesses may exist, but they would depend on the specific technical needs and the prime contractor's procurement strategy.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. Given the R&D nature and 'Cost No Fee' structure, rigorous financial and technical oversight is crucial to manage costs and ensure progress towards research objectives. Transparency would be enhanced by regular reporting from the contractor and potential reviews by the Defense Contract Audit Agency (DCAA) and the Inspector General.

Related Government Programs

Missile Defense Systems R&D
Space Systems Development
Advanced Weapons Technology Research
Department of Defense Research and Development Programs
Aerospace Engineering Services

Risk Flags

Cost Overrun Risk (Cost No Fee contract)
Technological Obsolescence Risk (Long Duration R&D)
Scope Creep Risk (Uncertain R&D Objectives)
Performance Monitoring Challenges (Long-term Contract)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $94.1 million to NEW MEXICO STATE UNIVERSITY. 200112!001044!2100!AD17 !USA MATERIEL COMMAND ACQUISITION!DATM0501C0026 !A!N!*!N!P00001 !20010823!20210814!877477604!877477604!861367373!N!NEW MEXICO STATE UNIVERSITY !CORNERS OF STEWART AND ESP!LAS CRUCES !NM!88003!84880!013!35!WHITE SANDS MSL RGE !DONA ANA !NEW MEXICO!+000001200000!N!N!000000000000!AC25!RDTE/MISSILE AND SPACE SYSTEMS-ENG/MANUF DEVEL !C9E!ALL OTHER SUPPLIES AND EQUIPME!1000!NOT DISCERNABLE OR CLASSIFIED !541710!*!*!3! ! ! !*!*!*!B!*!*!A! !A !N!S!2!001!K! !C!N!Z! ! !N!U!N! ! ! !

Who is the contractor on this award?

The obligated recipient is NEW MEXICO STATE UNIVERSITY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $94.1 million.

What is the period of performance?

Start: 2001-08-23. End: 2012-09-30.

What specific research objectives and expected outcomes are associated with this $877 million contract for missile and space systems?

The provided data indicates the contract is for 'Research and Development in the Physical, Engineering, and Life Sciences' with a focus on 'MISSILE AND SPACE SYSTEMS-ENG/MANUF DEVEL'. However, the specific research objectives and expected outcomes are not detailed in the summary data. Typically, such contracts would involve developing new technologies, improving existing systems, or conducting feasibility studies for future missile and space platforms. The substantial funding suggests a long-term, complex research effort. A detailed statement of work (SOW) or contract line item numbers (CLINs) would be necessary to understand the precise scope, deliverables, milestones, and the intended impact on defense capabilities.

How does the 'Cost No Fee' contract type impact the government's financial risk and the contractor's performance incentives compared to other contract types?

A 'Cost No Fee' (CNF) contract is a type of cost-reimbursement contract where the contractor is reimbursed for all allowable costs incurred in performing the contract, but receives no additional profit or fee. This structure places the entire financial risk of cost overruns on the government. For the contractor, there is no direct financial incentive to control costs beyond ensuring they are allowable and reasonable, as their profit is not tied to cost efficiency. This contrasts sharply with fixed-price contracts, where the contractor bears the risk of cost overruns and has a strong incentive to manage expenses tightly to maximize profit. CNF contracts are typically used when the scope of work is uncertain, such as in early-stage research and development, where defining a fixed price is impractical. However, they necessitate robust government oversight to monitor costs and ensure the contractor exercises due diligence in managing expenditures.

What is the significance of 'Full and Open Competition After Exclusion of Sources' and how might it affect the competitiveness of this award?

The contract type 'Full and Open Competition After Exclusion of Sources' indicates that the solicitation was made available to all responsible sources, but certain sources were excluded from consideration. This exclusion could be based on various factors, such as security clearances, specific technical capabilities, past performance issues, or other criteria deemed necessary by the agency. While it aims for broad competition, the exclusion of specific entities might limit the overall number of bidders. The impact on competitiveness is nuanced: if the exclusions were justified and based on essential requirements, it could lead to a more focused competition among highly qualified bidders. However, if the exclusions were overly broad or arbitrary, it could potentially reduce price competition and lead to a higher overall cost for the government compared to a truly unrestricted full and open competition.

What is the historical spending pattern for missile and space systems R&D at New Mexico State University or similar institutions?

Analyzing historical spending patterns for R&D in missile and space systems at New Mexico State University (NMSU) or comparable institutions requires access to detailed contract databases and institutional financial reports. NMSU has a history of involvement in defense-related research, particularly through its Physical Science Laboratory (PSL), which has supported various government agencies, including the Department of Defense. Without specific historical data for this contract or similar projects, it's difficult to establish a precise benchmark. However, large-scale R&D contracts in this domain, especially those involving advanced engineering and development for strategic systems, often span multiple years and involve significant funding, as evidenced by this $877 million award. Trends in defense R&D spending, technological advancements, and national security priorities would influence the scale and frequency of such contracts awarded to universities and research organizations.

What are the potential risks associated with a 10-year contract duration for advanced R&D in a rapidly evolving field like missile and space technology?

A 10-year contract duration for advanced R&D in missile and space technology presents several potential risks. Firstly, technological obsolescence is a significant concern; the technology landscape can change dramatically over a decade, potentially rendering the research outcomes outdated before they are fully realized or implemented. Secondly, the scope of work may need to adapt to evolving threats, strategic priorities, or scientific discoveries, requiring flexibility and potentially costly contract modifications. Thirdly, maintaining contractor engagement and performance over such a long period can be challenging, requiring sustained oversight and motivation. Finally, long-term cost estimation becomes more uncertain, increasing the risk of budget overruns if not managed meticulously. The 'Cost No Fee' aspect exacerbates this risk, as the government bears the brunt of any cost increases over the decade.

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 › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: STEWART AND ESPINA ST, LAS CRUCES, NM, 88003

Business Categories: Category Business, Educational Institution, Higher Education, Higher Education (Minority Serving), Nonprofit Organization, Not Designated a Small Business, Higher Education (Public)

Contract Characteristics

Cost or Pricing Data: NO

Timeline