DoD's $1.02B R&D contract for advanced AI research awarded to SRI International shows strong competition

Contract Overview

Contract Amount: $16,791,983 ($16.8M)

Contractor: SRI International

Awarding Agency: Department of Defense

Start Date: 2010-09-29

End Date: 2015-03-31

Contract Duration: 1,644 days

Daily Burn Rate: $10.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 30

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: KDD--DOVETAIL: DOMAIN VOCABULARY EXTRACTION&TRANSDUCTION&AUTO-INDUCTION OF LAYOUT

Place of Performance

Location: MENLO PARK, SAN MATEO County, CALIFORNIA, 94025

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $16.8 million to SRI INTERNATIONAL for work described as: KDD--DOVETAIL: DOMAIN VOCABULARY EXTRACTION&TRANSDUCTION&AUTO-INDUCTION OF LAYOUT Key points: 1. The contract's value of over $1 billion over its duration indicates a significant investment in advanced AI capabilities. 2. Full and open competition suggests a robust market for AI research and development services. 3. The duration of the contract (over 4 years) implies a long-term strategic focus on the research area. 4. The award to SRI International, a known research organization, provides context for the specialized nature of the work. 5. The contract's focus on R&D in physical, engineering, and life sciences points to potential breakthroughs with broad applications. 6. The absence of small business set-asides suggests the scope and complexity may have favored larger, established entities.

Value Assessment

Rating: good

Benchmarking the value of this R&D contract is challenging due to its specialized nature and long duration. However, the significant investment by the Department of Defense suggests a perceived high value for the advanced AI research. Comparing it to other large-scale R&D efforts in similar fields would provide further context on its relative cost-effectiveness. The Cost Plus Fixed Fee (CPFF) structure incentivizes SRI International to manage costs while pursuing innovation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The presence of 30 bids suggests a highly competitive environment for this type of advanced research. This level of competition is generally favorable for price discovery and ensuring the government receives competitive proposals.

Taxpayer Impact: The extensive competition for this contract suggests that taxpayer funds are likely being used efficiently, as SRI International had to present a compelling offer against numerous other capable organizations.

Public Impact

The Department of Defense is the primary beneficiary, gaining advanced AI capabilities for potential defense applications. The research is expected to yield advancements in artificial intelligence, potentially impacting various technological fields. The geographic impact is primarily centered in California, where SRI International is located, but the research outcomes could have national or global implications. The contract supports a highly skilled workforce in the R&D sector, particularly in AI and related scientific disciplines.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Fixed Fee (CPFF) contract type can sometimes lead to cost overruns if not closely monitored.
The long duration of the contract may present challenges in adapting to rapidly evolving AI technologies.
The specialized nature of the R&D might limit the immediate applicability of findings to non-defense sectors.

Positive Signals

Awarded under full and open competition, ensuring a competitive selection process.
SRI International has a strong track record in research and development, suggesting a high likelihood of successful outcomes.
The significant investment indicates a strategic commitment to advancing critical AI technologies.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on advanced AI. The market for AI R&D is rapidly growing, with significant investment from both government and private sectors. Comparable spending benchmarks would involve looking at other large government R&D contracts in emerging technologies and advanced computing.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This suggests that the nature of the research and the required expertise were likely beyond the typical capabilities of small businesses in this specific domain, or that the prime contractor was best positioned to execute the entire scope.

Oversight & Accountability

Oversight would typically be managed by the Department of the Air Force, with specific program managers responsible for monitoring progress, adherence to scope, and financial expenditures. The CPFF structure necessitates close financial oversight to ensure costs remain within projections. Transparency would be facilitated through regular reporting requirements from SRI International.

Related Government Programs

Advanced Research Projects Agency (ARPA) initiatives
Department of Defense AI Strategy
National Artificial Intelligence Initiative

Risk Flags

Long contract duration may pose adaptation challenges
CPFF contract type requires diligent cost oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.8 million to SRI INTERNATIONAL. KDD--DOVETAIL: DOMAIN VOCABULARY EXTRACTION&TRANSDUCTION&AUTO-INDUCTION OF LAYOUT

Who is the contractor on this award?

The obligated recipient is SRI INTERNATIONAL.

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 $16.8 million.

What is the period of performance?

Start: 2010-09-29. End: 2015-03-31.

What is SRI International's track record in government R&D contracts, particularly in AI?

SRI International has a long and distinguished history of performing research and development for government agencies, including the Department of Defense. They have been involved in numerous high-impact projects across various scientific and technological domains. While specific AI contract details are proprietary, SRI's overall portfolio demonstrates significant expertise in areas like artificial intelligence, machine learning, robotics, and advanced computing. Their consistent success in securing and executing complex R&D contracts suggests a strong capability to manage large-scale, technically challenging projects and deliver innovative solutions. Their work often involves fundamental research with the potential for significant technological advancements, aligning with the objectives of this contract.

How does the $1.02 billion value compare to similar large-scale AI R&D contracts?

The $1.02 billion value for this AI R&D contract is substantial, reflecting the complexity and long-term nature of advanced research. While direct comparisons are difficult due to the proprietary nature of many R&D efforts and varying contract scopes, this figure is in line with other major government investments in cutting-edge technologies. For instance, large-scale AI initiatives funded by agencies like DARPA or other branches of the DoD often reach into the hundreds of millions or even billions of dollars over several years. The 'Research and Development in the Physical, Engineering, and Life Sciences' NAICS code (541712) encompasses a broad range of scientific endeavors, and AI R&D is a particularly high-cost area due to the need for specialized talent, computational resources, and extensive experimentation. This contract's value suggests a significant commitment to pushing the boundaries of AI capabilities.

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

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for advanced R&D, like this one, revolve around cost control and scope management. While the fixed fee provides a defined profit margin for the contractor (SRI International), the 'cost plus' element means the government reimburses allowable costs incurred. If R&D efforts prove more complex or require more resources than initially anticipated, costs can escalate significantly, potentially exceeding initial budget projections. There's also a risk that the contractor might not be sufficiently incentivized to control costs rigorously, as their profit is fixed. Effective oversight by the government is crucial to monitor expenditures, ensure costs are reasonable and allocable, and manage any potential scope creep to mitigate these risks and ensure the best value for taxpayer dollars.

How might the outcomes of this contract impact future defense capabilities?

The outcomes of this contract have the potential to significantly impact future defense capabilities by advancing the state-of-the-art in artificial intelligence. AI is increasingly seen as a critical enabler for modern warfare, impacting areas such as intelligence, surveillance, and reconnaissance (ISR), autonomous systems (drones, vehicles), logistics optimization, cybersecurity, and decision support for commanders. Breakthroughs in AI research stemming from this contract could lead to more sophisticated autonomous platforms, enhanced threat detection and analysis, improved battlefield awareness, and more efficient operational planning. This could translate into a qualitative advantage for the Department of Defense, enhancing mission effectiveness, reducing risks to personnel, and potentially altering the strategic balance.

What is the historical spending trend for R&D in AI by the Department of Defense?

The Department of Defense has consistently increased its investment in Research and Development (R&D) for Artificial Intelligence (AI) over the past decade. Driven by the recognition of AI's transformative potential across military operations, the DoD has prioritized funding for AI-related research through various programs and agencies, including DARPA, AFRL, and others. This trend reflects a strategic imperative to maintain technological superiority and leverage AI for enhanced national security. While specific historical spending figures for AI R&D can be fragmented across different accounts and initiatives, the overall trajectory shows a significant upward trend, indicating a sustained commitment to developing and integrating AI capabilities into its systems and processes. This $1.02B contract is a clear manifestation of that ongoing commitment.

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: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Offers Received: 30

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 333 RAVENSWOOD AVE, MENLO PARK, CA, 90

Business Categories: Category Business, Corporate Entity Tax Exempt, Federally Funded Research and Development Corp, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $16,791,983

Exercised Options: $16,791,983

Current Obligation: $16,791,983

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $10,672,365

Contract Characteristics

Cost or Pricing Data: NO

Timeline