Air Force awards $48.9M R&D contract to Tecolote Research, Inc. for continued support

Contract Overview

Contract Amount: $48,889,657 ($48.9M)

Contractor: Tecolote Research, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-04-19

End Date: 2024-11-30

Contract Duration: 2,052 days

Daily Burn Rate: $23.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: FINANCIAL ACQUISITIONS AND SERVICES SUPPORT FOLLOW-ON

Place of Performance

Location: GOLETA, SANTA BARBARA County, CALIFORNIA, 93117

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $48.9 million to TECOLOTE RESEARCH, INC. for work described as: FINANCIAL ACQUISITIONS AND SERVICES SUPPORT FOLLOW-ON Key points: 1. Contract provides essential research and development services, aligning with Air Force's technological advancement goals. 2. The contract's duration of over 2000 days suggests a long-term need for specialized expertise. 3. Tecolote Research, Inc. has a history of supporting government R&D efforts. 4. The 'Research and Development in the Physical, Engineering, and Life Sciences' NAICS code indicates a focus on scientific and technical innovation. 5. The contract type (Cost Plus Fixed Fee) suggests that costs are reimbursed, plus a fixed fee for profit, which can incentivize efficiency. 6. The award was made under full and open competition after exclusion of sources, indicating a competitive process. 7. The contract's value is significant within the R&D sector for the Air Force.

Value Assessment

Rating: good

The contract value of $48.9 million over approximately five years represents a substantial investment in research and development. Benchmarking this against similar R&D contracts within the Department of Defense for specialized scientific support would provide a clearer picture of value for money. However, the fixed fee component suggests a degree of cost control is built into the pricing structure. The long duration implies a consistent need for these services, which can be cost-effective if performance is high.

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.' This typically means that the solicitation was broadly advertised, but specific sources were excluded from the initial bidding process for defined reasons, before a full and open competition was conducted among the remaining eligible entities. The number of bidders is not specified, but the 'full and open' designation suggests a competitive environment was intended, which generally aids in price discovery and achieving fair market value.

Taxpayer Impact: A competitive award process, even with initial source exclusions, is generally favorable for taxpayers as it aims to secure the best value through market forces. It helps prevent sole-source situations that could lead to inflated prices.

Public Impact

The primary beneficiaries are the Department of the Air Force, which receives critical R&D support to advance its technological capabilities. The contract delivers specialized scientific and engineering services essential for research and development projects. The geographic impact is primarily within California, where the contractor is located, but the research outcomes can have a national or global impact. The contract supports a workforce of scientists, engineers, and technical professionals, contributing to the high-tech sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can sometimes lead to cost overruns if not managed diligently, as the contractor is reimbursed for costs incurred.
The exclusion of sources in the initial phase, even if followed by full and open competition, warrants scrutiny to ensure fairness and prevent potential anti-competitive effects.
The long contract duration could pose a risk if technological needs shift rapidly, making the contracted services less relevant over time.

Positive Signals

The award to Tecolote Research, Inc. suggests a positive track record and capability in delivering R&D services.
The 'full and open competition' aspect indicates a commitment to leveraging market competition to achieve value.
The contract's focus on R&D aligns with strategic goals for technological advancement within the Air Force.
The fixed fee component in the contract type can provide a degree of cost predictability.

Sector Analysis

The contract falls within the Research and Development (R&D) sector, specifically NAICS code 541712. This sector is characterized by innovation, scientific inquiry, and the development of new technologies. The Department of Defense is a major investor in R&D, seeking to maintain technological superiority. Comparable spending benchmarks would involve looking at other R&D contracts awarded by the Air Force and DoD for similar scientific and engineering support services, considering the specialized nature of the work.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a set-aside provision. However, as a large prime contract, Tecolote Research, Inc. may engage small businesses as subcontractors to fulfill specific aspects of the R&D work, contributing to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program management office within the Department of the Air Force. Accountability measures are embedded in the contract terms, including performance standards and reporting requirements. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Research and Development Programs
Air Force Science and Technology Investments
Advanced Technology Development Contracts
Engineering and Technical Services Contracts

Risk Flags

Long contract duration may lead to outdated research objectives.
CPFF contract type requires diligent cost oversight.
Initial source exclusion warrants review for competitive fairness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.9 million to TECOLOTE RESEARCH, INC.. FINANCIAL ACQUISITIONS AND SERVICES SUPPORT FOLLOW-ON

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 $48.9 million.

What is the period of performance?

Start: 2019-04-19. End: 2024-11-30.

What is Tecolote Research, Inc.'s track record with the federal government, particularly the Department of Defense?

Tecolote Research, Inc. has a significant history of contracting with the U.S. federal government, including substantial work with the Department of Defense. Their portfolio often includes providing advanced engineering, scientific research, and technical support services. Analyzing their past performance ratings, contract values, and the types of services rendered across previous awards can indicate their reliability and expertise. A review of their contract history would reveal if they have successfully managed similar R&D projects, met performance metrics, and adhered to budget constraints. This specific contract, being a follow-on, suggests a positive prior relationship and successful performance on preceding work.

How does the value of this contract compare to similar R&D contracts awarded by the Air Force?

The $48.9 million value of this contract over its approximately five-year duration places it as a significant award within the Air Force's R&D portfolio. To benchmark its value, one would compare it to other contracts for 'Research and Development in the Physical, Engineering, and Life Sciences' (NAICS 541712) awarded by the Air Force or other DoD branches. Factors such as the specific research areas, the level of technical complexity, the duration, and the contractor's expertise influence pricing. If similar contracts for comparable services and durations are in the $40-55 million range, this award appears to be within the expected market parameters. A detailed analysis would require access to specific contract details and performance data of comparable awards.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude and duration?

Cost Plus Fixed Fee (CPFF) contracts, while reimbursing the contractor for allowable costs, include a fixed fee that represents profit. The primary risk for the government in a CPFF contract is that the contractor may have less incentive to control costs rigorously compared to fixed-price contracts, as costs are reimbursed. If the contractor's actual costs exceed initial estimates, the government pays these higher costs, plus the predetermined fixed fee. For a contract of this magnitude ($48.9M) and duration (over 2000 days), effective government oversight is crucial to monitor expenditures, ensure costs are reasonable and allocable, and prevent scope creep that could inflate the total cost without commensurate benefit. The fixed fee itself is not subject to cost increases, providing some cost certainty for profit.

How does the 'full and open competition after exclusion of sources' acquisition strategy impact price discovery and value for taxpayers?

The 'full and open competition after exclusion of sources' strategy is a nuanced approach. It implies that while the competition was ultimately broad, certain potential bidders were initially excluded based on specific criteria (e.g., security, capability, prior performance issues). Following this exclusion, the remaining eligible sources competed fully. This can still lead to robust price discovery if a sufficient number of qualified bidders remain. However, if the exclusion significantly limits the pool of competitors, it could potentially reduce competitive pressure and lead to less favorable pricing for taxpayers compared to a truly unrestricted full and open competition. The key is the number and competitiveness of the bidders that participated in the final stage.

What are the potential implications of the long contract duration (over 2000 days) for the relevance and effectiveness of the R&D services?

A contract duration exceeding 2000 days (approximately 5.6 years) for R&D services presents both opportunities and risks. On the positive side, it allows for sustained focus, deep exploration of complex research problems, and the development of long-term technological solutions. It can foster strong collaboration between the contractor and the agency. However, the rapid pace of technological advancement means that R&D priorities can shift significantly over such a long period. There is a risk that the contracted research objectives may become outdated or less relevant before the contract concludes. Effective contract management, including regular reviews and potential modifications to align with evolving needs, is essential to mitigate this risk and ensure the R&D remains impactful.

What is the significance of the NAICS code 541712 (Research and Development in the Physical, Engineering, and Life Sciences) in the context of this contract?

The NAICS code 541712 signifies that this contract is focused on scientific research and experimental development in fields such as physics, chemistry, biology, engineering, and computer science. This is a critical area for the Department of Defense, as it underpins the development of new technologies, advanced materials, and innovative systems necessary for national security and military superiority. Contracts under this code often involve high levels of technical expertise, specialized equipment, and rigorous scientific methodologies. The Air Force's investment in this area through Tecolote Research, Inc. indicates a strategic focus on advancing foundational scientific knowledge and translating it into practical applications for defense purposes.

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: 1

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, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $92,230,190

Exercised Options: $55,770,799

Current Obligation: $48,889,657

Actual Outlays: $1,032,745

Subaward Activity

Number of Subawards: 309

Total Subaward Amount: $472,850,860

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q14OADS619

IDV Type: IDC

Timeline