DoD's $29M R&D contract with P E SYSTEMS, INC. awarded via sole-source vehicle

Contract Overview

Contract Amount: $29,045,567 ($29.0M)

Contractor: P E Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2013-04-18

End Date: 2016-01-17

Contract Duration: 1,004 days

Daily Burn Rate: $28.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: IGF::CT::IGF PASS INTERIM CONTRACT

Place of Performance

Location: FAIRFAX, FAIRFAX CITY County, VIRGINIA, 22030

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $29.0 million to P E SYSTEMS, INC. for work described as: IGF::CT::IGF PASS INTERIM CONTRACT Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Research and Development focus in physical, engineering, and life sciences. 3. Contract duration of 1004 days suggests a significant project scope. 4. Awarded by the Department of the Air Force, indicating a defense-related need. 5. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not managed closely. 6. No small business set-aside was applied, potentially impacting small business participation. 7. The contract was not competed, raising questions about best value for taxpayers.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source R&D contract is challenging without comparable sole-source awards or detailed cost breakdowns. The Cost Plus Fixed Fee (CPFF) structure, while common for R&D, carries inherent risks of cost escalation. Without competitive pressure, it's difficult to ascertain if the fixed fee adequately compensated the contractor for the effort or if the government secured the best possible price. The lack of competition suggests a potential for higher-than-market pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source procurement strategy, meaning it was not openly competed. This approach is typically justified when only one responsible source can provide the required goods or services. The absence of multiple bidders means there was no direct price competition, which can limit the government's ability to negotiate the lowest possible price and may result in a higher overall cost.

Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competitive bidding. Without competing offers, the government had less leverage to drive down costs, potentially leading to less efficient use of public funds.

Public Impact

The Department of the Air Force benefits from specialized research and development services. The contract supports advancements in physical, engineering, and life sciences. The geographic impact is primarily within Virginia, where the contractor is located. Workforce implications include specialized R&D personnel employed by P E SYSTEMS, INC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits transparency and competitive pricing.
Cost Plus Fixed Fee contract type carries risk of cost overruns.
Lack of competition may lead to suboptimal value for taxpayer dollars.
No small business set-aside indicates limited opportunities for small businesses on this prime contract.

Positive Signals

Contract supports critical R&D for the Department of Defense.
P E SYSTEMS, INC. is a known entity in the defense contracting space.
The contract duration suggests a sustained effort towards specific research goals.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences (NAICS 541712). This is a critical area for defense innovation. The market for R&D services is often specialized, with a mix of large corporations and smaller, niche firms. Benchmarking is difficult due to the proprietary nature of R&D and the sole-source award, but spending in this category across the federal government is substantial, supporting technological advancement.

Small Business Impact

The absence of a small business set-aside on this prime contract means that opportunities for small businesses were not specifically mandated. While P E SYSTEMS, INC. may engage small businesses as subcontractors, the prime award itself did not prioritize small business participation. This could limit the direct economic benefit to the small business ecosystem from this specific contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. The Inspector General's office may conduct audits or investigations if specific concerns arise regarding performance, cost, or compliance. Transparency is limited due to the sole-source nature and the proprietary aspects of R&D, but contract modifications and performance reports would be subject to internal review.

Related Government Programs

Department of Defense Research and Development Contracts
Air Force Science and Technology Programs
Cost Plus Fixed Fee Contracts
Sole-Source Defense Procurements
NAICS 541712 - Research and Development in the Physical, Engineering, and Life Sciences

Risk Flags

Sole-source award limits competitive pricing.
Cost Plus Fixed Fee contract type poses risk of cost escalation.
Lack of transparency inherent in sole-source R&D contracts.
Potential for less than optimal value due to lack of competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.0 million to P E SYSTEMS, INC.. IGF::CT::IGF PASS INTERIM CONTRACT

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 $29.0 million.

What is the period of performance?

Start: 2013-04-18. End: 2016-01-17.

What is the track record of P E SYSTEMS, INC. with the Department of Defense, particularly on R&D contracts?

P E SYSTEMS, INC. has a history of contracting with the Department of Defense. Analyzing their past performance on similar R&D contracts, especially those awarded on a sole-source basis or using a Cost Plus Fixed Fee structure, would provide insight into their reliability, cost control capabilities, and ability to meet technical objectives. A review of past performance evaluations and any documented issues or successes would be crucial for assessing their suitability and the value delivered on this specific contract. Without access to detailed performance data, it's difficult to definitively assess their track record beyond their existence as a contractor.

How does the pricing structure (Cost Plus Fixed Fee) compare to industry standards for similar R&D efforts?

The Cost Plus Fixed Fee (CPFF) contract type is common for research and development where the scope may evolve or specific costs are difficult to predict upfront. In a CPFF contract, the government pays the contractor's actual costs plus a fixed fee representing profit. Industry standards suggest that for R&D, CPFF can be appropriate, but it requires robust oversight to manage costs effectively. The 'fixed fee' component is intended to incentivize efficiency, but without competitive benchmarking, it's hard to say if this specific fee was aligned with market rates for similar R&D services. The risk of cost overruns remains a key concern with this structure.

What specific R&D objectives were pursued under this contract, and were they achieved?

The provided data indicates the contract falls under NAICS code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology).' However, the specific objectives, research questions, methodologies, and outcomes are not detailed in the summary data. Achieving R&D objectives is often a long-term process, and success can be measured by milestones, prototypes, publications, or patents. A thorough assessment would require reviewing technical reports, progress updates, and final deliverables associated with the contract to determine if the intended R&D goals were met within the allocated timeframe and budget.

What is the historical spending pattern for P E SYSTEMS, INC. with the Department of Defense for R&D services?

To assess historical spending patterns, one would need to analyze contract award data for P E SYSTEMS, INC. over several fiscal years, specifically filtering for contracts categorized under R&D (e.g., NAICS 541712) and awarded by the Department of Defense or its components like the Air Force. This analysis would reveal the volume and value of R&D contracts awarded to the company, identify trends in contract types (e.g., CPFF, fixed-price), and highlight any significant increases or decreases in spending. Such a pattern could indicate the company's growing or diminishing role in DoD's R&D landscape.

Given the sole-source nature, were there any justifications or waivers documented for not competing this contract?

Sole-source contracts are typically awarded under specific exceptions to full and open competition, as outlined in federal acquisition regulations (e.g., FAR Part 6). Common justifications include unique capabilities, urgent needs, or the unavailability of other sources. For this contract, a formal justification for other than full and open competition (JOFOC) would have been required and documented. This document would detail why P E SYSTEMS, INC. was the only viable source and why competition was not feasible or not in the government's best interest. Accessing this JOFOC would be essential to understanding the rationale behind the sole-source award.

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) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: $45,642,542

Exercised Options: $41,984,142

Current Obligation: $29,045,567

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline