SRI INTERNATIONAL awarded $1.08B for R&D in physical, engineering, and life sciences by NIH

Contract Overview

Contract Amount: $10,814,471 ($10.8M)

Contractor: SRI International

Awarding Agency: Department of Health and Human Services

Start Date: 2004-01-05

End Date: 2010-12-31

Contract Duration: 2,552 days

Daily Burn Rate: $4.2K/day

Competition Type: NON-COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: R&D IN THE PHYSICAL, ENGINEERING AND LIFE SCIENCES

Place of Performance

Location: MENLO PARK, SAN MATEO County, CALIFORNIA, 94025

State: California Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $10.8 million to SRI INTERNATIONAL for work described as: R&D IN THE PHYSICAL, ENGINEERING AND LIFE SCIENCES Key points: 1. Contract awarded as a non-competitive delivery order, raising questions about price discovery. 2. Long contract duration of 2552 days suggests a sustained need for research services. 3. Cost Plus Fixed Fee (CPFF) pricing structure can incentivize cost overruns if not closely monitored. 4. The contract falls under R&D in the Physical, Engineering, and Life Sciences (NAICS 541710). 5. SRI INTERNATIONAL has a significant track record with federal agencies, indicated by this large award. 6. The contract's value of over $1 billion warrants scrutiny of its efficiency and effectiveness.

Value Assessment

Rating: fair

Benchmarking the value of this R&D contract is challenging due to its specialized nature and long duration. The Cost Plus Fixed Fee (CPFF) structure, while common for R&D, can lead to higher costs if not managed diligently. Without comparable non-competitive awards for similar scope and duration, assessing the precise value-for-money is difficult. However, the sheer scale of the award suggests a significant investment in research capabilities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a non-competitive delivery order, indicating that NIH likely identified SRI INTERNATIONAL as the sole source for these specific research and development services. The lack of competition means that pricing was not determined through a bidding process, potentially leading to less favorable terms for the government compared to a fully competed award. The rationale for sole-source procurement would need to be thoroughly documented to justify the absence of competition.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. The government did not benefit from the price discovery mechanisms inherent in a competitive process.

Public Impact

The primary beneficiaries are likely the scientific and research communities, advancing knowledge in physical, engineering, and life sciences. Services delivered include advanced research and development activities critical for scientific progress. The geographic impact is primarily centered around SRI INTERNATIONAL's facilities in California, but the research findings can have global implications. Workforce implications include employment for scientists, researchers, and support staff at SRI INTERNATIONAL.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award limits transparency and potential cost savings.
CPFF contract type carries inherent risk of cost escalation without strict oversight.
Long contract duration may obscure performance issues if not regularly reviewed.
Lack of defined deliverables in the provided data makes performance assessment difficult.

Positive Signals

Significant investment in critical R&D areas suggests alignment with national priorities.
SRI INTERNATIONAL's established presence indicates potential for reliable research execution.
The substantial award amount reflects the perceived importance and complexity of the research.

Sector Analysis

This contract falls within the Research and Development in the Physical, Engineering, and Life Sciences sector (NAICS 541710). This sector is characterized by innovation and scientific discovery, often involving long-term projects and significant investment. Federal spending in this area supports advancements across various fields, from medicine to advanced materials. Comparable spending benchmarks are difficult to establish for highly specialized, long-term R&D efforts, but the scale of this award places it among significant federal investments in scientific research.

Small Business Impact

The provided data indicates that small business participation (sb) was false, and there was no indication of a small business set-aside (ss). This suggests the contract was not specifically targeted towards small businesses. Subcontracting opportunities for small businesses may exist but are not explicitly detailed in this summary. The focus appears to be on a large, established research institution rather than fostering small business growth within this specific award.

Oversight & Accountability

Oversight for this contract would typically be managed by the National Institutes of Health (NIH), a division of the Department of Health and Human Services. Accountability measures would be tied to the terms of the Cost Plus Fixed Fee (CPFF) agreement and the research milestones outlined in the contract. Transparency is limited by the non-competitive nature of the award; however, NIH is generally subject to public reporting requirements for federal contracts. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

National Institutes of Health Research Grants
Department of Defense Research and Development Contracts
National Science Foundation Research Awards
Biomedical Research Initiatives
Advanced Technology Development Programs

Risk Flags

Non-competitive award
Cost Plus Fixed Fee contract type
Long contract duration
High contract value

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $10.8 million to SRI INTERNATIONAL. R&D IN THE PHYSICAL, ENGINEERING AND LIFE SCIENCES

Who is the contractor on this award?

The obligated recipient is SRI INTERNATIONAL.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $10.8 million.

What is the period of performance?

Start: 2004-01-05. End: 2010-12-31.

What is SRI INTERNATIONAL's track record with federal R&D contracts, particularly with NIH?

SRI INTERNATIONAL is a well-established research institute with a long history of performing research and development for various U.S. federal agencies, including the Department of Defense, NASA, and the National Institutes of Health (NIH). Their extensive portfolio includes work in areas such as advanced materials, robotics, artificial intelligence, and biomedical research. The substantial value and long duration of this specific NIH contract (over $1 billion over nearly 7 years) indicate a significant and ongoing relationship, suggesting a history of successful performance and a high level of trust from the agency. Detailed performance reviews and past performance evaluations would provide further insight into their specific track record on similar projects.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other R&D contract types in terms of value for money?

The Cost Plus Fixed Fee (CPFF) contract type is common for research and development where the scope of work is not precisely defined at the outset, allowing for flexibility as research progresses. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. While this structure can be advantageous for exploring novel research areas, it carries a higher risk of cost overruns compared to fixed-price contracts. Value for money can be compromised if costs escalate significantly beyond initial projections and if the fixed fee is disproportionately high relative to the effort. Effective oversight, stringent cost controls, and clear performance metrics are crucial to ensure value under a CPFF arrangement. Other R&D contract types, like Cost Plus Incentive Fee (CPIF), can offer better value by incentivizing cost efficiency.

What are the primary risks associated with a sole-source R&D contract of this magnitude?

The primary risks associated with a sole-source R&D contract of this magnitude include a lack of competitive pressure, which can lead to inflated pricing and reduced innovation. Without competing bids, the government may not secure the most cost-effective solution or the best available technology. There's also a risk of vendor lock-in, where the agency becomes overly reliant on a single contractor, potentially hindering the exploration of alternative approaches. Furthermore, the absence of a competitive process can reduce transparency and make it more challenging to objectively assess the contractor's performance and the overall value received. Robust justification for the sole-source award and rigorous contract management are essential to mitigate these risks.

How has federal spending in 'Research and Development in the Physical, Engineering, and Life Sciences' evolved over the past decade?

Federal spending in 'Research and Development in the Physical, Engineering, and Life Sciences' (often categorized under NAICS code 541710) has generally seen fluctuations driven by national priorities, economic conditions, and agency budgets. Historically, agencies like the National Institutes of Health (NIH), the National Science Foundation (NSF), and various Department of Defense components are major contributors. While specific year-over-year trends can vary, there has been a sustained emphasis on areas like biomedical research, advanced manufacturing, and AI development. Budgetary pressures and shifts in research focus can lead to increases or decreases in funding for specific sub-sectors within this broad category. Analyzing historical spending patterns requires examining detailed budget appropriations and agency-specific R&D outlays.

What are the potential implications of a long-duration (2552 days) R&D contract for program effectiveness?

A long-duration R&D contract, such as this 2552-day award, can have several implications for program effectiveness. On the positive side, it allows for sustained focus and deep exploration of complex scientific questions, which is often necessary for groundbreaking discoveries. It can also provide stability for research teams and infrastructure. However, long durations also increase the risk of technological obsolescence if the research focus doesn't adapt to rapid advancements. It can also make it harder to maintain agility and pivot if initial research directions prove unfruitful. Effective program management requires robust milestone tracking, regular performance reviews, and mechanisms for adapting the research scope to ensure continued relevance and effectiveness throughout the contract's lifecycle.

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 › General Science and Technology R&D Services

Competition & Pricing

Extent Competed: NON-COMPETITIVE DELIVERY ORDER

Solicitation ID: NIHNIAIDDMID0339

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Address: 333 RAVENSWOOD AVE, MENLO PARK, CA, 90

Business Categories: Category Business, Nonprofit Organization, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $10,814,471

Exercised Options: $10,814,471

Current Obligation: $10,814,471

Contract Characteristics

Multi-Year Contract: Yes

Parent Contract

Parent Award PIID: HHSN266200400005I

IDV Type: IDC

Timeline