DoD's $19.5M R&D contract with Sierra Lobo Inc. shows fair value despite limited competition
Contract Overview
Contract Amount: $19,491,081 ($19.5M)
Contractor: Sierra Lobo Inc
Awarding Agency: Department of Defense
Start Date: 2012-06-12
End Date: 2017-12-31
Contract Duration: 2,028 days
Daily Burn Rate: $9.6K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 5
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: ARES 3 BASIC CONTRACT
Place of Performance
Location: EDWARDS, KERN County, CALIFORNIA, 93524
Plain-Language Summary
Department of Defense obligated $19.5 million to SIERRA LOBO INC for work described as: ARES 3 BASIC CONTRACT Key points: 1. Contract awarded through full and open competition after exclusion of sources, indicating a deliberate selection process. 2. Pricing appears reasonable when benchmarked against similar R&D contracts, suggesting good value for money. 3. The contract's cost-plus-fixed-fee structure carries moderate risk, requiring close monitoring of cost overruns. 4. Performance context is within the specialized field of physical, engineering, and life sciences research. 5. Sierra Lobo Inc. operates within the R&D sector, contributing to advancements in scientific and technical fields. 6. The contract duration of over 5 years suggests a significant, long-term research objective.
Value Assessment
Rating: good
The contract's total value of approximately $19.5 million over five years suggests a moderate investment for specialized research and development. Benchmarking against similar definitive contracts for R&D services in the physical and engineering sciences indicates that the pricing is within an acceptable range. While specific cost breakdowns are not provided, the cost-plus-fixed-fee structure implies that the government is paying for incurred costs plus a predetermined profit, which can be efficient if costs are well-managed. The absence of detailed performance metrics makes a precise value-for-money assessment challenging, but the overall expenditure appears aligned with industry standards for similar research endeavors.
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 specific procurement method suggests that while the competition was intended to be broad, certain sources may have been excluded based on specific criteria or prior determinations. The number of bidders is not explicitly stated, but the 'full and open' designation implies that multiple qualified entities had the opportunity to bid. This level of competition generally promotes price discovery and encourages competitive pricing, although the 'exclusion of sources' caveat warrants further investigation into the rationale behind any exclusions.
Taxpayer Impact: The competitive nature of this award, even with potential source exclusions, likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition scenario. It ensures that the government explored multiple options before selecting a contractor.
Public Impact
The primary beneficiaries are the Department of Defense and potentially other government agencies requiring advanced research in physical, engineering, and life sciences. The contract delivers critical research and development services, contributing to technological advancements and national security. Geographic impact is primarily centered in California, where the contractor is located, but the research outcomes can have national implications. Workforce implications include employment for scientists, engineers, and support staff involved in the research projects.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- The 'exclusion of sources' clause in the competition type requires scrutiny to ensure it did not unduly limit competition or favor specific contractors.
- Cost-plus-fixed-fee contracts can lead to cost overruns if not rigorously monitored and managed by the contracting agency.
- Lack of detailed performance metrics makes it difficult to fully assess the effectiveness and efficiency of the R&D outcomes.
- The specific nature of the R&D may lead to outcomes that are not immediately applicable or commercially viable, posing a risk to return on investment.
Positive Signals
- Awarded through a full and open competition process, indicating an effort to solicit a wide range of qualified bidders.
- The contract is with Sierra Lobo Inc., a company likely possessing specialized expertise in the required R&D fields.
- The duration of the contract (over 5 years) suggests a commitment to a significant research objective, potentially leading to substantial advancements.
- The research and development focus aligns with the DoD's need for technological superiority and innovation.
Sector Analysis
The contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences (NAICS 541712). This sector is characterized by innovation, intellectual property generation, and often long development cycles. Government R&D spending is crucial for advancing scientific frontiers and developing technologies with dual-use applications. Comparable spending benchmarks in this area are highly variable, depending on the specific scientific discipline and project scope, but contracts in the tens of millions are common for significant research initiatives.
Small Business Impact
This contract does not appear to have a small business set-aside (SS=false, SB=false). The total value of the contract suggests it is likely beyond the scope typically reserved for small businesses. There is no explicit information regarding subcontracting plans for small businesses, which could be a missed opportunity to engage the small business ecosystem in supporting this research effort. Further investigation into subcontracting goals would be beneficial.
Oversight & Accountability
Oversight for this contract would primarily reside with the Department of the Air Force, a component of the Department of Defense. As a cost-plus-fixed-fee contract, rigorous financial oversight and auditing are essential to ensure costs are reasonable and allocable. The contract's duration and R&D nature suggest ongoing programmatic oversight by technical experts within the agency. Transparency would be enhanced by public reporting of research milestones and outcomes, though specific details may be classified or proprietary.
Related Government Programs
- Department of Defense Research and Development Programs
- Air Force Science and Technology Investments
- Physical and Engineering Sciences Research
- Advanced Technology Development Contracts
Risk Flags
- Potential for cost overruns due to CPFF structure.
- Limited transparency on specific R&D outcomes.
- Competition level requires further scrutiny due to 'exclusion of sources'.
Tags
research-and-development, department-of-defense, department-of-the-air-force, cost-plus-fixed-fee, definitive-contract, full-and-open-competition, california, physical-engineering-life-sciences, sierra-lobo-inc, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $19.5 million to SIERRA LOBO INC. ARES 3 BASIC CONTRACT
Who is the contractor on this award?
The obligated recipient is SIERRA LOBO 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 $19.5 million.
What is the period of performance?
Start: 2012-06-12. End: 2017-12-31.
What specific research areas does this contract cover within 'Research and Development in the Physical, Engineering, and Life Sciences'?
The provided data indicates the contract falls under NAICS code 541712, which broadly covers Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology). Without access to the contract's statement of work or specific task orders, the precise research areas remain undefined. However, given the 'ARES 3 BASIC CONTRACT' designation and the awarding agency (Department of the Air Force), it is plausible that the research pertains to areas such as advanced materials, aerospace engineering, propulsion systems, sensor technology, or other scientific and technical domains critical to Air Force operations and future capabilities. Further details would require consulting the contract's detailed documentation.
How does the 'full and open competition after exclusion of sources' procurement method differ from standard full and open competition?
Standard 'full and open competition' requires the government to provide all responsible sources an opportunity to submit a bid or proposal. 'Full and open competition after exclusion of sources' is a specific statutory exception (often under FAR Part 6) that allows agencies to exclude certain sources from a competitive procurement after initially intending to conduct full and open competition. This exclusion must be justified based on specific reasons, such as national security concerns, proprietary data, or the need to protect classified information. While it still aims for broad competition among the remaining eligible sources, the exclusion means not all potential bidders were considered, potentially impacting the breadth of innovation and price competition compared to a truly unrestricted process.
What are the typical risks associated with a Cost Plus Fixed Fee (CPFF) contract type for R&D projects?
Cost Plus Fixed Fee (CPFF) contracts are common for R&D where the scope of work is not precisely defined at the outset. The primary risk for the government is that the contractor may have less incentive to control costs once the fixed fee is established, as they are reimbursed for all allowable costs. This can lead to cost overruns if the project scope expands or unforeseen challenges arise. For the contractor, the risk lies in accurately estimating the costs to ensure the fixed fee provides adequate profit. Effective oversight, detailed cost tracking, and clear milestones are crucial for mitigating government risk in CPFF contracts.
What is the significance of the contract award date (2012-06-12) and end date (2017-12-31) in relation to current technological advancements?
The contract was active between mid-2012 and the end of 2017. This period predates many of the rapid advancements seen in fields like artificial intelligence, advanced materials, and certain areas of aerospace technology in the subsequent years. While the R&D conducted during this period may have laid foundational groundwork, the specific outcomes might be considered mature or even superseded by current state-of-the-art technologies. Assessing the long-term impact requires understanding if the research led to deployable technologies or if it was a stepping stone for further, more recent R&D efforts.
Can the 'ARES 3 BASIC CONTRACT' designation provide clues about the nature or scale of the research?
The designation 'ARES 3 BASIC CONTRACT' likely refers to a specific program or project name within the Department of the Air Force or Department of Defense. 'Basic Contract' often implies an overarching agreement under which multiple task orders or modifications can be issued over time, allowing for flexibility in research scope and funding. The 'ARES 3' nomenclature itself doesn't inherently reveal the research area without internal context, but it suggests a structured, potentially multi-faceted research initiative. The fact that it's a 'basic contract' with a significant value indicates it's a foundational agreement for a substantial R&D effort.
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 AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 5
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 102 PINNACLE DR, FREMONT, OH, 43420
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Hispanic American Owned Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $23,907,933
Exercised Options: $23,658,536
Current Obligation: $19,491,081
Subaward Activity
Number of Subawards: 10
Total Subaward Amount: $869,734
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2012-06-12
Current End Date: 2017-12-31
Potential End Date: 2017-12-31 00:00:00
Last Modified: 2025-04-21
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