DoD's $12.4M R&D contract for cost estimating models awarded to Tecolote Research, Inc

Contract Overview

Contract Amount: $12,402,239 ($12.4M)

Contractor: Tecolote Research, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-09-30

End Date: 2026-09-29

Contract Duration: 1,825 days

Daily Burn Rate: $6.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: ADFW/PKS - HOFFMAN/BARTCZAK - RESEARCH AND DEVELOPMENT FOR COST ESTIMATING MODELING (CEM) DATASETS, ANALYSIS AND METHODS (DSAM) EFFORT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20330

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $12.4 million to TECOLOTE RESEARCH, INC. for work described as: ADFW/PKS - HOFFMAN/BARTCZAK - RESEARCH AND DEVELOPMENT FOR COST ESTIMATING MODELING (CEM) DATASETS, ANALYSIS AND METHODS (DSAM) EFFORT Key points: 1. Contract focuses on developing advanced cost estimating models and datasets for the Air Force. 2. The contract's duration of five years suggests a long-term need for these specialized R&D services. 3. Awarded under full and open competition, indicating a broad search for qualified contractors. 4. The use of a Cost Plus Fixed Fee (CPFF) pricing structure is common for R&D efforts where costs are uncertain. 5. The contract value is relatively modest for a five-year R&D effort within the defense sector. 6. Performance is located in the District of Columbia, a hub for federal contracting and R&D.

Value Assessment

Rating: good

The contract value of approximately $12.4 million over five years for R&D services appears reasonable, averaging around $2.5 million annually. While direct comparisons are difficult without specific project scope, this level of funding is typical for specialized research and development efforts within the Department of Defense. The CPFF structure allows for flexibility in R&D but requires careful oversight to manage costs effectively. Benchmarking against similar contracts for cost estimating model development would provide further insight into value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition after exclusion of sources,' which implies that while the initial solicitation may have had some exclusions, the final award was made after a broad competitive process. The presence of two bidders suggests a moderate level of competition for this specialized R&D service. A higher number of bidders would typically lead to more competitive pricing and potentially better value.

Taxpayer Impact: The competitive nature of this award, despite having only two bidders, suggests that taxpayers are likely receiving a fair price for the specialized R&D services. However, further competition could potentially drive costs down.

Public Impact

The primary beneficiaries are the Department of the Air Force, which will receive enhanced cost estimating capabilities. The contract will deliver research and development services focused on creating and refining cost estimating models and datasets. This effort aims to improve the accuracy and reliability of cost projections for future defense programs. The geographic impact is primarily within the District of Columbia, where the contractor is located and likely performing the work. Workforce implications include specialized R&D personnel, analysts, and data scientists employed by the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Fixed Fee contracts for R&D.
Ensuring the developed models are practical and effectively integrated into existing Air Force processes.
The limited number of bidders could indicate a niche market, potentially limiting future competition.
Reliance on a single contractor for critical cost estimating methodology development.

Positive Signals

Awarded through a full and open competitive process, ensuring a broad search for expertise.
The contract duration allows for in-depth research and development, fostering robust model creation.
Focus on developing foundational datasets and methods for cost estimation, a critical defense capability.
The contractor, Tecolote Research, Inc., likely possesses specialized expertise in this domain.

Sector Analysis

This contract falls within the broader Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences. The market for defense R&D, particularly in areas like cost estimation and modeling, is highly specialized. Companies like Tecolote Research, Inc. operate in a niche that supports government agencies in making informed decisions about program costs and resource allocation. Comparable spending benchmarks would involve looking at other R&D contracts for similar analytical and modeling services within the DoD.

Small Business Impact

This contract does not appear to have a small business set-aside (ss=false) and the contractor is not a small business. There is no explicit information regarding subcontracting plans for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for specialized support.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officer and the relevant program management office within the Department of the Air Force. The Cost Plus Fixed Fee structure necessitates diligent monitoring of costs and progress to ensure value for money. Transparency is generally maintained through contract reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Defense Cost and Schedule Analysis
Program Protection Planning
Systems Engineering Research
Advanced Analytics for Defense
Cost Estimation Software Development

Risk Flags

Cost Overrun Risk (CPFF)
Scope Creep Potential
Limited Competition Indicator
R&D Uncertainty

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.4 million to TECOLOTE RESEARCH, INC.. ADFW/PKS - HOFFMAN/BARTCZAK - RESEARCH AND DEVELOPMENT FOR COST ESTIMATING MODELING (CEM) DATASETS, ANALYSIS AND METHODS (DSAM) EFFORT

Who is the contractor on this award?

The obligated recipient is TECOLOTE RESEARCH, INC..

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 $12.4 million.

What is the period of performance?

Start: 2021-09-30. End: 2026-09-29.

What is the track record of Tecolote Research, Inc. in performing similar R&D contracts for the Department of Defense?

Tecolote Research, Inc. has a history of performing research and development services, particularly in areas related to aerospace engineering, systems analysis, and cost estimation. They have secured numerous contracts with various branches of the U.S. military, including the Air Force, Navy, and Army, as well as agencies like NASA and the Missile Defense Agency. Their expertise often lies in providing technical support, advanced modeling, and simulation capabilities. While specific details on past cost estimating model development contracts would require deeper research, their general profile suggests they are a qualified entity for this type of work. Past performance reviews and contract close-out data would offer more granular insights into their success rates, adherence to schedule, and budget management on similar projects.

How does the annual spending on this contract compare to other DoD R&D efforts in cost estimation?

The annual spending for this contract averages approximately $2.48 million ($12.4M / 5 years). This figure is relatively modest when compared to the vast landscape of Department of Defense Research and Development (R&D) spending. Larger, more complex R&D programs, especially those involving hardware development or advanced technology prototypes, can command annual budgets in the tens or even hundreds of millions of dollars. However, for a specialized R&D effort focused specifically on developing cost estimating models and datasets, this annual figure is within a reasonable range. The key differentiator is the niche focus; while the total dollar amount might seem small in the grand scheme of DoD spending, the per-project value for specialized analytical R&D can be significant.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract for R&D?

The primary risks associated with a CPFF contract for R&D, like this one, revolve around cost control and scope definition. For the government, the main risk is that the contractor may incur higher costs than anticipated, even with a fixed fee, potentially leading to the government paying more than initially projected if not managed diligently. The contractor's incentive is to complete the work for the fixed fee, but in R&D, unforeseen technical challenges can significantly increase labor hours and material costs. For the contractor, the risk lies in underestimating the effort required, leading to a reduced profit margin or even a loss if costs exceed projections significantly. Effective oversight, clear milestones, and regular performance reviews are crucial to mitigate these risks.

How effective are cost estimating models developed through R&D in improving overall defense program budgeting?

The effectiveness of cost estimating models developed through R&D in improving defense program budgeting is significant, provided they are well-designed, validated, and properly implemented. Accurate cost estimation is foundational to realistic budgeting, resource allocation, and program planning. Advanced models can incorporate more variables, account for emerging technologies, analyze historical data more effectively, and provide probabilistic cost ranges rather than single-point estimates. This leads to better-informed decisions, reduced budget overruns, and increased program predictability. However, the 'effectiveness' hinges on the quality of the R&D, the relevance of the data used, and the willingness of program managers to adopt and utilize the new tools. Poorly developed or outdated models can be detrimental.

What is the historical spending trend for contracts related to cost estimating and modeling within the Department of the Air Force?

Historical spending trends for contracts related to cost estimating and modeling within the Department of the Air Force (and DoD broadly) show a consistent and often increasing demand for these services. As defense systems become more complex and acquisition programs face greater scrutiny regarding cost and schedule, the need for robust and accurate cost estimation tools and expertise grows. Funding for such R&D efforts fluctuates based on strategic priorities, technological advancements, and budget cycles. However, the underlying requirement for reliable cost data and predictive modeling remains a constant. Over the years, there has been a shift towards more sophisticated analytical techniques and data-driven approaches, necessitating ongoing R&D investment in this area.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: ALTERNATIVE SOURCES

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 420 S FAIRVIEW AVE STE 201, GOLETA, CA, 93117

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $13,204,287

Exercised Options: $13,004,287

Current Obligation: $12,402,239

Actual Outlays: $5,241,304

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $17,877

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline