DoD's $19.1M Engineering Campaigns contract awarded to Southwest Research Institute shows limited competition
Contract Overview
Contract Amount: $19,128,965 ($19.1M)
Contractor: Southwest Research Institute
Awarding Agency: Department of Defense
Start Date: 2018-09-26
End Date: 2024-04-21
Contract Duration: 2,034 days
Daily Burn Rate: $9.4K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: ENGINEERING CAMPAIGNS
Place of Performance
Location: SAN ANTONIO, BEXAR County, TEXAS, 78238
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $19.1 million to SOUTHWEST RESEARCH INSTITUTE for work described as: ENGINEERING CAMPAIGNS Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential value for money. 2. The contract spans over 6 years, indicating a long-term need for engineering services. 3. The primary contractor, Southwest Research Institute, is a well-established research organization. 4. The contract's broad scope in 'Research and Development in the Physical, Engineering, and Life Sciences' suggests significant technical complexity. 5. The 'Cost Plus Fixed Fee' pricing structure can incentivize cost overruns if not closely monitored. 6. The absence of small business set-asides or subcontracting plans warrants further investigation into broader economic impacts.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging due to its sole-source nature and specialized R&D focus. Without competitive bids, it's difficult to ascertain if the fixed fee accurately reflects the market rate for these engineering services. The duration and scope suggest a significant investment, but the lack of comparative data prevents a definitive value-for-money assessment. The contract's value is tied to the unique capabilities of the contractor.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning there was no open competition. This typically occurs when a specific contractor possesses unique capabilities or when circumstances preclude a competitive process. The lack of multiple bidders means that price discovery through market forces was not utilized, potentially leading to higher costs for the government.
Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible pricing through competition, potentially resulting in less favorable terms for taxpayers.
Public Impact
The Department of Defense benefits from specialized engineering research and development services. The contract supports advancements in physical, engineering, and life sciences, potentially leading to new technologies and improved defense capabilities. The geographic impact is primarily centered in Texas, where the contractor is located. The contract likely supports a highly skilled workforce of engineers and researchers.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing and potential cost savings.
- Cost Plus Fixed Fee structure may not adequately incentivize cost control.
- Lack of transparency in the justification for sole-source award.
- Limited visibility into the specific deliverables and their alignment with strategic goals.
- Absence of small business participation could limit broader economic impact.
Positive Signals
- Award to a reputable research institution (Southwest Research Institute) suggests technical expertise.
- Long contract duration indicates a sustained need and potential for deep integration of services.
- Focus on R&D aligns with the DoD's strategic objectives for technological advancement.
- The contract is for essential engineering services critical to national security.
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The market for specialized engineering R&D services is often characterized by a limited number of highly capable firms. Government contracts in this area are crucial for driving innovation and maintaining technological superiority. Comparable spending benchmarks are difficult to establish due to the unique nature of R&D and the sole-source award.
Small Business Impact
The contract data indicates no specific small business set-aside. Given the sole-source nature and the specialized R&D focus, it is unlikely that subcontracting opportunities for small businesses were mandated. This limits the potential for small business participation and their contribution to the broader defense industrial base in this specific contract.
Oversight & Accountability
Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The 'Cost Plus Fixed Fee' structure requires diligent oversight to manage costs and ensure the fixed fee remains appropriate. Transparency is limited by the sole-source nature of the award, with justifications for this approach being key to accountability.
Related Government Programs
- DoD Research and Development Contracts
- Engineering Services Contracts
- Cost Plus Fixed Fee Contracts
- Sole Source Defense Contracts
Risk Flags
- Sole-source award
- Cost Plus Fixed Fee pricing
- Long contract duration
- Lack of small business participation
Tags
department-of-defense, research-and-development, engineering-services, sole-source, cost-plus-fixed-fee, southwest-research-institute, texas, large-contract, long-term-contract, non-competed
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $19.1 million to SOUTHWEST RESEARCH INSTITUTE. ENGINEERING CAMPAIGNS
Who is the contractor on this award?
The obligated recipient is SOUTHWEST RESEARCH INSTITUTE.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $19.1 million.
What is the period of performance?
Start: 2018-09-26. End: 2024-04-21.
What is the specific justification for awarding this contract on a sole-source basis?
The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are awarded when only one responsible source is available to meet the government's needs. This could be due to unique capabilities, proprietary technology, or urgent and compelling circumstances. Without the official justification document, it is impossible to determine the precise reasons. Further investigation would involve reviewing the contract file and any associated justifications submitted by the agency to the Federal Service Desk.
How does the 'Cost Plus Fixed Fee' structure compare to other contract types for similar R&D services?
Cost Plus Fixed Fee (CPFF) contracts are common in R&D where the scope of work is not fully defined at the outset, making it difficult to establish a firm fixed price. In CPFF, the government pays the contractor's actual costs plus a predetermined fixed fee representing profit. Compared to Firm Fixed Price (FFP) contracts, CPFF offers more flexibility for the contractor to adapt to evolving research needs but shifts more cost risk to the government. Other R&D contract types include Cost Plus Incentive Fee (CPIF), which adds performance incentives, and Cost No Fee (CNF), where the contractor receives no fee if cost overruns occur. CPFF balances cost reimbursement with a defined profit margin, but requires robust government oversight to prevent cost escalation.
What is Southwest Research Institute's track record with the Department of Defense?
Southwest Research Institute (SwRI) is a well-established independent, nonprofit research and development organization. They have a long history of working with various government agencies, including the Department of Defense. SwRI is known for its expertise in a wide range of scientific and engineering disciplines. Their track record with the DoD typically involves complex research projects, technology development, and testing services. While specific contract performance details are not provided here, SwRI's continued engagement with the DoD suggests a generally positive performance history and a strong capability to meet the agency's technical requirements.
What are the potential risks associated with a sole-source award for engineering R&D?
The primary risk of a sole-source award for engineering R&D is the lack of competitive pressure, which can lead to inflated prices and reduced value for money. Without competing bids, the government may not obtain the most cost-effective solution. There's also a risk that the chosen contractor may not be the most innovative or best-suited for the specific R&D needs, as alternatives were not explored. Furthermore, sole-source awards can create a perception of favoritism and reduce transparency in the procurement process. This can also limit opportunities for emerging technologies or smaller, innovative firms that might offer alternative solutions.
How does the duration of this contract (over 6 years) impact its overall value and risk?
A contract duration exceeding six years for engineering R&D signifies a long-term commitment to a particular research direction or set of services. This extended period can allow for deeper integration of services, sustained development of expertise, and potentially greater innovation through long-term collaboration. However, it also increases the government's exposure to cost overruns and technological obsolescence. The longer the contract, the greater the risk that the initial requirements may become outdated or that a more cost-effective solution could emerge elsewhere. Effective oversight and flexibility to adapt requirements are crucial for mitigating these risks over such an extended period.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: HDTRA118R0004
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 6220 CULEBRA RD, SAN ANTONIO, TX, 78238
Business Categories: Category Business, Corporate Entity Tax Exempt, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $20,871,132
Exercised Options: $20,110,590
Current Obligation: $19,128,965
Actual Outlays: $330,261
Subaward Activity
Number of Subawards: 6
Total Subaward Amount: $431,417
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HDTRA118D0002
IDV Type: IDC
Timeline
Start Date: 2018-09-26
Current End Date: 2024-04-21
Potential End Date: 2024-04-21 00:00:00
Last Modified: 2025-07-28
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