DoD's $235M R&D contract with SAIC for A&AS support shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $235,137,165 ($235.1M)

Contractor: Science Applications International Corporation

Awarding Agency: Department of Defense

Start Date: 2016-04-07

End Date: 2021-10-06

Contract Duration: 2,008 days

Daily Burn Rate: $117.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: IGF::CT::IGF J9 A&AS SUPPORT

Place of Performance

Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $235.1 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: IGF::CT::IGF J9 A&AS SUPPORT Key points: 1. Contract value of $235M over 5 years suggests significant investment in specialized support services. 2. The 'full and open competition' was utilized, but only one bid was received, indicating potential market concentration or barriers to entry. 3. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not managed tightly. 4. The NAICS code 541712 points to a focus on physical, engineering, and life sciences R&D, a critical area for defense. 5. The contractor, SAIC, is a large, established entity in the federal contracting space. 6. The contract duration of 5 years allows for sustained support but also ties up significant resources. 7. The award was made by the Defense Threat Reduction Agency, highlighting its importance in national security.

Value Assessment

Rating: fair

The contract's total value of $235M over approximately five years, for Advanced Analytics and Assessment Support (A&AS), appears substantial. Benchmarking against similar R&D support contracts is challenging without more specific service details. However, the Cost Plus Fixed Fee (CPFF) contract type, while common for R&D, carries inherent risks of cost escalation if not rigorously managed. The fixed fee component provides some cost certainty for the contractor's profit, but the overall cost to the government is variable. Without more granular data on the specific services rendered and their outcomes, a definitive value-for-money assessment is difficult, but the single bid suggests potential for better pricing through increased competition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' which theoretically allows all responsible sources to submit an offer. However, only one bid was received. This outcome could suggest several possibilities: the market for this specific type of highly specialized support is very limited, the solicitation requirements were overly restrictive, or potential competitors were deterred by the contract's complexity or perceived difficulty. The lack of multiple bids limits price discovery and potentially reduces the government's leverage in negotiating favorable terms.

Taxpayer Impact: A single bid limits the government's ability to secure the most competitive pricing, potentially leading to higher costs for taxpayers. It also raises questions about whether the full spectrum of available expertise and innovation was considered.

Public Impact

The primary beneficiaries are the Department of Defense and the Defense Threat Reduction Agency, receiving critical analytical and assessment support for R&D initiatives. The services delivered likely involve complex research, data analysis, threat assessment, and strategic planning to support national security objectives. The geographic impact is primarily national, given the nature of defense R&D, though specific field operations could have localized effects. The contract supports a highly specialized workforce within the contractor organization, likely comprising scientists, engineers, and analysts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (one bid) may indicate a lack of market engagement or potential barriers to entry for other firms.
Cost Plus Fixed Fee contract type can incentivize cost overruns if not closely monitored.
The specific nature of 'A&AS Support' is broad and could mask inefficiencies if performance metrics are not stringent.
Long contract duration (5 years) could lead to vendor lock-in and reduced flexibility.

Positive Signals

Awarded under 'full and open competition' signifies an intent to maximize market participation.
The contractor, SAIC, is a well-established entity with a track record in government contracting, suggesting a degree of reliability.
The contract addresses critical R&D needs within the Department of Defense, indicating strategic importance.
The fixed fee component provides a defined profit margin, offering some predictability for the contractor.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences (excluding biotechnology), as indicated by NAICS code 541712. This sector is crucial for maintaining technological superiority and addressing evolving threats. The federal government is a significant investor in R&D, with substantial spending allocated across various agencies, including the Department of Defense, for scientific advancement and innovation. Comparable spending benchmarks would typically involve analyzing other large-scale R&D support contracts awarded by DoD or other science-focused agencies, looking at contract types, durations, and the specific research areas supported.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded to a major defense contractor (SAIC), it is unlikely that significant subcontracting opportunities would be specifically targeted towards small businesses unless mandated by the prime contractor or agency. The absence of small business participation goals or set-asides means the direct impact on the small business ecosystem for this specific award is likely minimal, though SAIC may engage small businesses in its broader supply chain.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting agency, the Defense Threat Reduction Agency (DTRA), and potentially the Department of Defense's Inspector General. Mechanisms would include regular performance reviews, audits of costs (especially given the CPFF structure), and adherence to contract milestones. Transparency is typically managed through contract award databases like FPDS, though detailed performance metrics and spending breakdowns may be less publicly accessible. The Inspector General's office would have jurisdiction to investigate fraud, waste, or abuse.

Related Government Programs

Department of Defense Research and Development Contracts
Advanced Analytics and Assessment Support Services
Science and Technology Support Contracts
Defense Threat Reduction Agency Contracts
Cost-Plus-Fixed-Fee Contracts

Risk Flags

Limited Competition
Cost Plus Fixed Fee Contract Type
Potential for Cost Overruns
Lack of Small Business Participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $235.1 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. IGF::CT::IGF J9 A&AS SUPPORT

Who is the contractor on this award?

The obligated recipient is SCIENCE APPLICATIONS INTERNATIONAL CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $235.1 million.

What is the period of performance?

Start: 2016-04-07. End: 2021-10-06.

What is Science Applications International Corporation's (SAIC) track record with the Department of Defense, particularly in R&D support?

SAIC has a long and extensive history of contracting with the Department of Defense across a wide array of services, including R&D support, systems engineering, IT services, and logistics. They are a major prime contractor and have held numerous large-value contracts with various DoD components, including the Defense Threat Reduction Agency (DTRA). Their track record generally indicates a capacity to manage complex, large-scale programs. However, like any large contractor, they have faced scrutiny and audits on specific contracts regarding cost performance and adherence to requirements. For this specific contract (ID: IGF J9 A&AS SUPPORT), the data shows it was awarded in 2016 and completed in 2021, with a total value of approximately $235 million. Further analysis would require examining performance reviews, any contract modifications, and audit reports related to this specific engagement to fully assess their performance in this instance.

How does the $235M contract value compare to similar R&D support contracts awarded by the DoD or DTRA?

The $235 million total contract value over approximately five years for Advanced Analytics and Assessment Support (A&AS) is substantial, placing it in the upper tier of support service contracts. To benchmark effectively, one would need to compare it against other contracts for similar R&D support, particularly those involving complex analysis, threat reduction, or scientific advisory services. Contracts awarded by DTRA or other DoD agencies like DARPA or the various service branches' research labs for specialized scientific and technical support often range from tens to hundreds of millions of dollars. The 'full and open competition' with only one bid is a key factor; similar procurements that attract more bidders might yield lower average values due to competitive pricing pressures. Without access to a detailed database of comparable contract specifics (scope, duration, specific services), a precise comparison is difficult, but the value indicates a significant and critical requirement.

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

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract, especially one valued at $235 million, is the potential for cost overruns. In a CPFF structure, the government reimburses the contractor for all allowable costs incurred, plus a predetermined fixed fee representing the contractor's profit. While the fee is fixed, the total cost is variable. If the contractor does not manage costs efficiently, or if unforeseen technical challenges arise, the total expenditure by the government can significantly exceed initial estimates. This necessitates robust government oversight, including detailed cost tracking, audits, and performance monitoring, to ensure costs remain reasonable and allocable to the contract's objectives. The risk is that the government pays more than necessary for the services rendered if cost controls are inadequate.

Given the single bid, what does this imply about the market for specialized R&D support services?

The fact that a 'full and open competition' resulted in only a single bid for this $235 million contract suggests a potentially concentrated or highly specialized market for these Advanced Analytics and Assessment Support (A&AS) services. This could mean that few companies possess the specific technical expertise, clearances, and capacity required by the Defense Threat Reduction Agency (DTRA) for this particular R&D support role. Alternatively, it might indicate that the solicitation's requirements were perceived as overly burdensome, the contract duration or structure was unattractive, or potential competitors were unaware of the opportunity or chose not to bid due to strategic reasons. This lack of competition limits price discovery and may mean the government did not secure the most cost-effective solution available in the broader market.

How has federal spending in the R&D sector (NAICS 541712) trended over the past decade, and how does this contract fit?

Federal spending in the Research and Development sector, particularly under NAICS code 541712 (Research and Development in the Physical, Engineering, and Life Sciences), has generally seen consistent, significant investment, driven by national security imperatives, technological advancement goals, and public health initiatives. The Department of Defense is consistently one of the largest federal funders of R&D. This $235 million contract with SAIC for A&AS support fits within this trend, representing a substantial allocation towards specialized scientific and technical services that underpin the DoD's research endeavors. While overall R&D spending fluctuates based on budget priorities and geopolitical factors, the demand for high-level analytical and engineering support services, as exemplified by this contract, remains a critical component of federal R&D investment.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HDTRA115R0007

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 12010 SUNSET HILLS RD, RESTON, VA, 20190

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $273,251,592

Exercised Options: $250,366,025

Current Obligation: $235,137,165

Actual Outlays: $13,524,629

Subaward Activity

Number of Subawards: 30

Total Subaward Amount: $87,642,858

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline