DoD's $54.5M R&D Contract for Fighter/Bomber Crosscutter Program Awarded to P E Systems, Inc

Contract Overview

Contract Amount: $54,458,999 ($54.5M)

Contractor: P E Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2015-10-23

End Date: 2021-02-18

Contract Duration: 1,945 days

Daily Burn Rate: $28.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 13

Pricing Type: COST NO FEE

Sector: R&D

Official Description: IGF::CL::IGF NON-ACAT A&AS EPASS FIGHTER/BOMBER CROSSCUTTER

Place of Performance

Location: FAIRFAX, FAIRFAX CITY County, VIRGINIA, 22030

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $54.5 million to P E SYSTEMS, INC. for work described as: IGF::CL::IGF NON-ACAT A&AS EPASS FIGHTER/BOMBER CROSSCUTTER Key points: 1. Contract awarded for research and development in physical, engineering, and life sciences. 2. Significant duration of 1945 days indicates a long-term project. 3. Contract type 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' suggests a competitive process with specific criteria. 4. The contract value of $54.5 million represents a substantial investment in defense R&D. 5. The North American Industry Classification System (NAICS) code 541712 points to specialized research services. 6. The contract was awarded by the Department of the Air Force, a key branch of the DoD. 7. The contract's performance period spans from October 2015 to February 2021.

Value Assessment

Rating: fair

Benchmarking the value of this $54.5 million contract is challenging without specific deliverables or comparable projects. The 'COST NO FEE' contract type suggests that the contractor is reimbursed for allowable costs, with no fee. This can sometimes lead to cost overruns if not managed tightly. The awarded amount is significant for R&D, but its value-for-money depends heavily on the successful outcomes of the research and development conducted.

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, possibly due to specific technical requirements or prior relationships. The number of bidders is not specified, but the exclusion of sources suggests a potentially narrower competitive pool than a truly full and open competition.

Taxpayer Impact: This procurement method, while allowing for competition, may limit the number of potential offerors, potentially impacting the most competitive pricing for taxpayers.

Public Impact

The primary beneficiaries are the Department of Defense and the U.S. Air Force, receiving advanced research and development for fighter and bomber aircraft. The services delivered are focused on research and development in physical, engineering, and life sciences, crucial for advancing military aviation technology. The geographic impact is primarily within the United States, supporting national defense capabilities. Workforce implications include employment for researchers, engineers, and technical staff at P E Systems, Inc. and potentially subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to 'COST NO FEE' contract type if not rigorously monitored.
Limited competition due to 'EXCLUSION OF SOURCES' might have reduced price discovery.
The long contract duration could present challenges in adapting to rapidly evolving technological landscapes.
Lack of specific performance metrics makes it difficult to assess the efficiency of R&D spending.

Positive Signals

Award to an established entity (P E Systems, Inc.) suggests a degree of confidence in their capabilities.
The contract addresses critical R&D needs for advanced military platforms.
The research is likely to contribute to future technological superiority for the Air Force.

Sector Analysis

This contract falls within the Defense Research and Development sector, a critical area for national security. The market for defense R&D is characterized by high barriers to entry, specialized expertise, and significant government investment. Comparable spending benchmarks would typically be found within other large-scale R&D programs for aerospace and defense systems, often involving billions of dollars annually across the DoD.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this contract. This suggests that the focus was on specialized capabilities likely held by larger firms. There is no explicit information on subcontracting plans for small businesses, which could be a missed opportunity for engaging the small business ecosystem in defense R&D.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Inspector General jurisdiction would apply for investigations into fraud, waste, or abuse. Transparency is generally maintained through contract award databases and reporting requirements, though specific R&D progress details might be sensitive.

Related Government Programs

Fighter Aircraft Modernization Programs
Bomber Aircraft Development Programs
Advanced Aerospace Research Initiatives
Department of Defense Research and Development Funding

Risk Flags

Potential for cost overruns due to 'COST NO FEE' structure.
Limited competition due to 'EXCLUSION OF SOURCES' may impact price discovery.
Lack of specific performance metrics hinders value assessment.
Contract duration is lengthy, potentially leading to outdated technology if not managed.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $54.5 million to P E SYSTEMS, INC.. IGF::CL::IGF NON-ACAT A&AS EPASS FIGHTER/BOMBER CROSSCUTTER

Who is the contractor on this award?

The obligated recipient is P E SYSTEMS, 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 $54.5 million.

What is the period of performance?

Start: 2015-10-23. End: 2021-02-18.

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

The contract, identified by the description 'IGF::CL::IGF NON-ACAT A&AS EPASS FIGHTER/BOMBER CROSSCUTTER', indicates that the research and development activities were focused on the 'EPASS FIGHTER/BOMBER CROSSCUTTER' program. This likely involved advanced engineering, systems integration, and scientific research aimed at improving or developing capabilities for current and future fighter and bomber aircraft. The NAICS code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)', further specifies the nature of the work. Without access to the detailed statement of work or technical reports, the precise nature of the R&D remains general, but it is clearly tied to enhancing strategic air power.

How does the $54.5 million contract value compare to similar R&D efforts for fighter/bomber programs?

The $54.5 million contract value for R&D in the fighter/bomber domain is a significant but not exceptionally large sum in the context of major defense acquisition programs. Large-scale platform development or modernization efforts can easily run into billions of dollars. However, for specific R&D initiatives, focused research, or specialized system enhancements, $54.5 million represents a substantial investment. To provide a precise comparison, one would need to identify contracts with identical or highly similar research objectives, scope, and duration within the Air Force or other branches for comparable aircraft platforms. The 'COST NO FEE' structure also influences how this value is interpreted, as it represents reimbursed costs rather than a fixed price for a defined outcome.

What are the key risks associated with a 'COST NO FEE' contract for R&D?

A 'COST NO FEE' (CNF) contract, while common in R&D where outcomes can be uncertain, carries specific risks. The primary risk for the government is the potential for cost overruns. Since the contractor is reimbursed for allowable costs without an additional fee, there might be less incentive to control expenses compared to a fixed-price contract. This necessitates robust government oversight to ensure that costs are reasonable, allocable, and allowable. Another risk is that the contractor might prioritize cost recovery over innovation or efficiency if not properly managed. For the contractor, the risk lies in not being able to recoup all incurred costs if they are deemed unallowable by the government, or if the project is terminated without sufficient justification for incurred expenses.

What does 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' imply for this contract?

The contract type 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' suggests a procurement process that began with the intent of broad competition but ultimately excluded certain potential offerors. This exclusion is typically based on specific, justifiable reasons, such as unique capabilities, proprietary technology, or prior performance on related systems. While it aims to ensure a competitive environment, the exclusion of sources inherently narrows the field of bidders. This could potentially limit the range of innovative solutions or the most competitive pricing that might have emerged from a truly unrestricted competition. The justification for excluding sources would be critical in assessing whether this approach was appropriate and served the government's best interests.

What is the significance of the NAICS code 541712 for this contract?

The North American Industry Classification System (NAICS) code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)', precisely categorizes the nature of the work performed under this contract. It signifies that P E Systems, Inc. was engaged in scientific inquiry and experimentation to expand knowledge and understanding in fields relevant to physics, engineering principles, and biological sciences, excluding specific biotech applications. This code is crucial for statistical purposes, industry analysis, and identifying the type of specialized services procured by the government. It confirms that the contract was for advanced research and development, not for the production or deployment of existing technologies.

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: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 13

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 10201 FAIRFAX BLVD STE 400, FAIRFAX, VA, 22030

Business Categories: Black American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $65,665,402

Exercised Options: $64,048,443

Current Obligation: $54,458,999

Actual Outlays: $2,508,287

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q14OADS724

IDV Type: IDC

Timeline