SRI INTERNATIONAL awarded $40.5M for Physical Science R&D, with a 5,591-day performance period

Contract Overview

Contract Amount: $40,526,763 ($40.5M)

Contractor: SRI International

Awarding Agency: Department of Health and Human Services

Start Date: 2006-09-15

End Date: 2022-01-05

Contract Duration: 5,591 days

Daily Burn Rate: $7.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: R&D-PHYSICAL SCIENCE-A RES/EXPL DEV

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 $40.5 million to SRI INTERNATIONAL for work described as: R&D-PHYSICAL SCIENCE-A RES/EXPL DEV Key points: 1. The contract's extended duration suggests a long-term research commitment, potentially indicating complex or iterative development. 2. A high number of offers (5) in a full and open competition points to a healthy market response for this R&D area. 3. The cost-plus-fixed-fee structure is common for R&D where final costs are uncertain, but requires careful oversight. 4. Performance spans over 15 years, from 2006 to 2022, offering a substantial historical data set for analysis. 5. The contract's value, while significant, needs to be benchmarked against similar large-scale R&D efforts. 6. The absence of small business set-asides suggests the scope or nature of the R&D may not have been conducive to such provisions.

Value Assessment

Rating: fair

The total award of $40.5 million over a 15-year period averages to approximately $2.7 million per year. Benchmarking this against other large-scale physical science R&D contracts is crucial. Without specific comparable data, it's difficult to definitively assess value for money. The cost-plus-fixed-fee (CPFF) contract type, while suitable for R&D with uncertain outcomes, can lead to cost overruns if not managed stringently. The fixed fee component, however, provides some predictability for the contractor's profit.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with five offers received. This indicates a competitive environment for this specific research and development requirement. A higher number of bidders generally suggests that the market is responsive and that the government has a good selection of potential contractors. This level of competition is positive for price discovery and potentially leads to better overall terms for the government.

Taxpayer Impact: The robust competition for this contract suggests that taxpayer funds were likely used efficiently, as multiple firms vied for the opportunity, potentially driving down costs and improving the quality of proposals.

Public Impact

The primary beneficiaries are likely the scientific community and the public through advancements in physical sciences. The contract supports research and development activities, contributing to innovation and technological progress. The geographic impact is centered in California, where SRI International is located, potentially creating local employment and economic activity. The contract supports a highly skilled workforce of scientists, researchers, and technical personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The long performance period (over 15 years) could present challenges in adapting to evolving research needs and technological shifts.
Cost-plus-fixed-fee contracts require diligent oversight to ensure costs remain reasonable and the fixed fee is justified.
The lack of specific details on deliverables makes it hard to assess the tangible outcomes and their alignment with initial objectives.

Positive Signals

Awarded under full and open competition with multiple offers indicates a strong market interest and potential for competitive pricing.
The substantial funding allocated suggests a project of significant scientific importance and potential impact.
SRI International is a well-established research institution with a history of government contracting, implying a degree of reliability.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on Physical Sciences. The R&D market is characterized by innovation, long development cycles, and significant investment. Comparable spending benchmarks would involve looking at other large federal R&D contracts awarded to research institutions or private companies in similar scientific domains. The National Institutes of Health (NIH) is a major funder of scientific research, and this contract represents a portion of their investment in advancing physical sciences.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, and there is no explicit mention of small business subcontracting goals. This suggests that the nature of the R&D or the specific requirements of the contract may have favored larger, more established research organizations. Further investigation into the contract details would be needed to confirm if any subcontracting opportunities were available to small businesses.

Oversight & Accountability

Oversight for this contract would primarily fall under the National Institutes of Health (NIH), a component of the Department of Health and Human Services. As a cost-plus-fixed-fee contract, rigorous financial oversight is expected to monitor expenditures and ensure the fixed fee is earned. Transparency would be facilitated through contract reporting mechanisms and potentially public research dissemination, though specific oversight details are not provided in the summary data.

Related Government Programs

National Institutes of Health Research Grants
Department of Health and Human Services R&D Spending
Physical Science Research Initiatives
Federal Basic Research Funding
Advanced Technology Development Contracts

Risk Flags

Long contract duration may lead to relevance issues if not actively managed.
CPFF contracts require robust oversight to control costs.
Lack of specific R&D focus makes outcome assessment difficult without SOW.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $40.5 million to SRI INTERNATIONAL. R&D-PHYSICAL SCIENCE-A RES/EXPL DEV

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 $40.5 million.

What is the period of performance?

Start: 2006-09-15. End: 2022-01-05.

What specific areas within physical sciences does this contract cover, and what are the expected outcomes?

The provided data categorizes this contract under 'Research and Development in the Physical, Engineering, and Life Sciences' with a North American Industry Classification System (NAICS) code of 541710. However, it does not specify the precise sub-fields of physical sciences being researched or the tangible expected outcomes. Typically, such contracts from NIH aim to advance fundamental scientific knowledge, develop new technologies, or address specific health-related challenges through physical science principles. The outcomes could range from theoretical advancements to prototypes or new methodologies. Further review of the contract statement of work would be necessary to detail the specific research objectives and deliverables.

How does the $40.5 million award compare to other large physical science R&D contracts funded by NIH or other agencies?

The $40.5 million award over a 15-year period represents a significant, but not extraordinary, investment for a large-scale R&D project. Annualized, it's approximately $2.7 million per year. NIH and other agencies like NSF, DOE, and DOD fund numerous large R&D programs. For instance, major research centers or multi-year grants can easily reach tens or hundreds of millions of dollars. To provide a precise comparison, one would need to identify contracts with similar NAICS codes (e.g., 541710, 541720) and similar durations awarded within the last 5-10 years. However, the multi-year nature and substantial funding suggest this contract supports a critical, long-term research endeavor.

What is SRI International's track record with similar government R&D contracts, particularly with NIH?

SRI International is a well-established non-profit research institute with a long history of performing research and development for government agencies, including NIH. They have a broad portfolio encompassing various scientific and technical domains. Accessing SRI International's contract history with NIH would involve searching federal procurement databases (like FPDS or USASpending.gov) for awards to SRI International under relevant NAICS codes and funding agencies. Generally, SRI is known for its capabilities in areas like advanced materials, sensors, robotics, and biotechnology, which often intersect with physical sciences R&D. Their sustained funding suggests a positive track record of performance and successful delivery on previous contracts.

What are the potential risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D, and how are they mitigated?

The primary risk with CPFF contracts is that the contractor may not be sufficiently incentivized to control costs, as the government agrees to cover all allowable costs plus a fixed fee. This can lead to cost overruns if the initial cost estimates are inaccurate or if the project scope expands. For R&D, this risk is inherent due to the unpredictable nature of scientific discovery. Mitigation strategies employed by agencies like NIH include stringent oversight of expenditures, regular progress reviews, clear definition of project milestones, and careful negotiation of the fixed fee based on realistic cost projections and the level of risk involved. The government also retains the right to audit costs.

Given the 5,591-day duration, how does the agency ensure the research remains relevant and aligned with evolving scientific priorities?

Long-duration contracts like this one, spanning over 15 years, necessitate adaptive management strategies. Agencies typically build in mechanisms for periodic reviews, re-baselining, and potential modifications to the scope of work. For R&D, relevance is often maintained through regular scientific advisory panels, milestone-based funding releases, and opportunities for the contractor to propose pivot strategies based on emerging findings or technological advancements. The fixed-fee nature might also encourage the contractor to propose efficient pathways to achieve objectives within the agreed-upon fee structure, while the agency monitors progress against evolving scientific landscapes.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: RFPNIHNIAIDDMID0609

Offers Received: 5

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 333 RAVENSWOOD AVE, MENLO PARK, CA, 94025

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

Financial Breakdown

Contract Ceiling: $147,835,266

Exercised Options: $129,592,895

Current Obligation: $40,526,763

Actual Outlays: $481,746

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline