DoD's $40.6M R&D contract with ACHAOGEN, INC. for physical sciences research shows fair value

Contract Overview

Contract Amount: $40,602,252 ($40.6M)

Contractor: Achaogen, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-06-15

End Date: 2012-11-30

Contract Duration: 1,995 days

Daily Burn Rate: $20.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 30

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: BASE PERIOD

Place of Performance

Location: SOUTH SAN FRANCISCO, SAN MATEO County, CALIFORNIA, 94080, UNITED STATES OF AMERICA

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $40.6 million to ACHAOGEN, INC. for work described as: BASE PERIOD Key points: 1. Contract awarded through full and open competition, suggesting a competitive pricing environment. 2. Research and Development in Physical, Engineering, and Life Sciences sector is critical for national security. 3. The contract's duration and value indicate a significant investment in a specific research area. 4. Performance context is crucial for understanding the long-term impact of this R&D investment. 5. Sector positioning within R&D highlights the agency's focus on scientific advancement. 6. Risk indicators are moderate given the nature of R&D contracts, which inherently involve uncertainty.

Value Assessment

Rating: good

The contract's base period value of approximately $40.6 million over five years suggests a substantial investment. Benchmarking this against similar R&D contracts in the physical sciences requires detailed analysis of the specific research scope and deliverables. However, the Cost Plus Fixed Fee (CPFF) contract type implies that costs are monitored, and the fixed fee provides a level of predictability for the contractor's profit. Without direct comparable contract data, assessing precise value-for-money is challenging, but the competitive award process provides some assurance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit proposals. The presence of 30 bids suggests a robust and competitive bidding process. A high number of bidders generally leads to better price discovery and can drive down costs for the government, as contractors vie to win the award by offering competitive terms and pricing.

Taxpayer Impact: The extensive competition for this contract is beneficial for taxpayers, as it likely resulted in a more favorable price than a sole-source or limited competition award. This process helps ensure that government funds are used efficiently by selecting the most cost-effective solution.

Public Impact

The primary beneficiaries are the Department of Defense and potentially the nation through advancements in physical sciences research. The services delivered are research and development in the physical, engineering, and life sciences. The geographic impact is primarily within California, where the contractor is located. Workforce implications include employment for scientists, researchers, and support staff involved in the R&D activities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

R&D contracts inherently carry risks related to the uncertainty of research outcomes and potential cost overruns.
The CPFF contract type can incentivize cost increases if not managed rigorously, though the fixed fee component mitigates this to some extent.
Long contract durations require sustained oversight to ensure continued relevance and performance.

Positive Signals

Awarded through full and open competition with a significant number of bidders, indicating strong market interest and potential for competitive pricing.
The contract is for Research and Development, a critical area for technological advancement and national security.
The contractor is based in California, a hub for scientific and technological innovation.

Sector Analysis

The contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences. This sector is characterized by innovation, long development cycles, and significant government investment, particularly in defense and technology. Comparable spending benchmarks in this area are highly dependent on the specific scientific domain and the novelty of the research. The market size for defense-related R&D is substantial, with agencies like the Department of Defense being major funders of scientific exploration to maintain technological superiority.

Small Business Impact

The data indicates this contract was not set aside for small businesses (sb: false) and does not explicitly mention subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem appears limited for this specific award. However, the large prime contractor may engage small businesses as subcontractors, which would need to be assessed through subcontracting reports if available.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Threat Reduction Agency (DTRA) within the Department of Defense. Accountability measures are embedded in the Cost Plus Fixed Fee structure, requiring detailed reporting on costs and progress. Transparency is generally maintained through contract databases and agency reporting, though specific research details might be sensitive. Inspector General jurisdiction would apply to investigate fraud, waste, and abuse.

Related Government Programs

Defense Research and Development Programs
Advanced Scientific Research Initiatives
Physical Sciences Research Contracts
Engineering and Technology Development
Life Sciences Research Grants

Risk Flags

Potential for cost overruns inherent in R&D contracts.
Uncertainty of research outcomes and technological feasibility.
Need for robust oversight to ensure contractor performance and cost control.
Long contract duration requires sustained monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.6 million to ACHAOGEN, INC.. BASE PERIOD

Who is the contractor on this award?

The obligated recipient is ACHAOGEN, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Threat Reduction Agency).

What is the total obligated amount?

The obligated amount is $40.6 million.

What is the period of performance?

Start: 2007-06-15. End: 2012-11-30.

What is the track record of ACHAOGEN, INC. with government contracts, particularly in R&D?

A review of federal procurement data would be necessary to fully assess ACHAOGEN, INC.'s track record. This would involve examining past contract awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or terminations. Understanding their experience with similar R&D projects, their ability to manage budgets, and their success in delivering on technical objectives is crucial. Without specific historical data for ACHAOGEN, INC. in this JSON, a comprehensive assessment of their track record cannot be provided. However, the award of a significant contract by the Department of Defense suggests they met the agency's requirements and demonstrated capability at the time of award.

How does the value of this contract compare to similar R&D efforts within the Department of Defense?

Comparing the $40.6 million base period value requires identifying comparable R&D contracts within the DoD. Key comparison factors include the specific scientific discipline (e.g., materials science, biotechnology, physics), the contract type (e.g., CPFF, cost-plus-award-fee), the duration, and the scope of work. R&D contracts can vary widely in cost depending on the complexity and novelty of the research. A contract of this magnitude over approximately five years for specialized physical sciences research is substantial but not necessarily outside the norm for significant defense-related R&D initiatives. A detailed analysis would involve querying databases for contracts with similar NAICS codes (541710) and agencies over similar timeframes.

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

The primary risks associated with a CPFF R&D contract include the inherent uncertainty of research outcomes, potential for cost overruns if the scope is not well-defined or if unforeseen technical challenges arise, and the contractor's incentive to manage costs effectively. While the fixed fee provides a defined profit margin, the 'cost plus' component means the government bears the risk of actual costs incurred. For R&D, the risk of not achieving the desired scientific or technological breakthroughs is also significant. Effective oversight, clear milestones, and robust change management processes are critical to mitigating these risks.

How effective has the Defense Threat Reduction Agency (DTRA) been in managing R&D contracts of this nature?

Assessing the effectiveness of DTRA in managing R&D contracts requires examining their historical performance metrics, such as contract completion rates, adherence to budget, and the successful transition of research into practical applications or further development. DTRA's mission focuses on countering weapons of mass destruction, making R&D a core function. Their ability to manage complex, long-term scientific projects is critical. Performance data, including any audits or reviews by the Government Accountability Office (GAO) or the DoD Inspector General, would provide insights into their oversight capabilities and the success of their R&D portfolio.

What is the historical spending trend for R&D contracts under NAICS code 541710 by the Department of Defense?

Historical spending trends for R&D contracts under NAICS code 541710 by the Department of Defense can be analyzed through federal procurement databases like USAspending.gov. This would reveal the total annual obligations for this specific R&D category over several fiscal years. Trends might show increases or decreases based on national security priorities, technological advancements, and budget allocations. Understanding these trends provides context for the significance and scale of individual contracts like the one awarded to ACHAOGEN, INC., indicating whether this award represents a typical investment or a notable deviation.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

Product/Service Code: RESEARCH AND DEVELOPMENT › N – Health 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: 7000 SHORELINE COURT 3RD FL, SOUTH SAN FRANCISCO, CA, 94080

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $46,704,084

Exercised Options: $46,704,084

Current Obligation: $40,602,252

Contract Characteristics

Cost or Pricing Data: NO

Timeline