NIH awarded Southern Research Institute $30.7M for R&D in physical, engineering, and life sciences

Contract Overview

Contract Amount: $30,667,259 ($30.7M)

Contractor: Southern Research Institute

Awarding Agency: Department of Health and Human Services

Start Date: 2007-12-21

End Date: 2012-09-30

Contract Duration: 1,745 days

Daily Burn Rate: $17.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

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

Place of Performance

Location: BIRMINGHAM, JEFFERSON County, ALABAMA, 35255

State: Alabama Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $30.7 million to SOUTHERN RESEARCH INSTITUTE for work described as: R&D IN THE PHYSICAL, ENGINEERING AND LIFE SCIENCES Key points: 1. Contract value appears reasonable given the 5-year duration and the nature of R&D services. 2. Full and open competition suggests a competitive bidding process, potentially leading to better pricing. 3. The contract type (Cost Plus Fixed Fee) can incentivize cost control while allowing for flexibility in R&D. 4. Performance period of nearly 5 years indicates a significant, long-term research undertaking. 5. This contract falls within the broad category of scientific research and development services. 6. The award to a single entity suggests a specialized capability was sought.

Value Assessment

Rating: good

The total award of $30.7 million over approximately 5 years averages to about $6.14 million per year. This figure seems within a reasonable range for complex R&D projects requiring specialized scientific expertise. Benchmarking against similar large-scale R&D contracts awarded by NIH or other federal agencies for comparable services would provide a more precise value-for-money assessment. However, without specific comparable contract data, the annual spend is not indicative of over or under-spending.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bids suggests a moderate level of competition for this specific R&D requirement. While two bidders is better than one, a higher number of bidders typically leads to more robust price discovery and potentially lower costs for the government.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages a wider range of providers to offer their services, potentially driving down prices through market forces.

Public Impact

The primary beneficiaries are likely researchers and scientists within the National Institutes of Health (NIH) and potentially the broader scientific community through the advancement of knowledge. The services delivered are research and development in the physical, engineering, and life sciences, contributing to scientific discovery and innovation. The geographic impact is primarily at the contractor's location in Alabama, but the research outcomes could have national or global implications. Workforce implications include employment for scientists, researchers, technicians, and support staff at Southern Research Institute.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can sometimes lead to cost overruns if not managed diligently, as the contractor is reimbursed for all allowable costs plus a fixed fee.
The limited number of bidders (2) might suggest a niche market or high barriers to entry, potentially impacting future competition.
The specific nature of R&D can make it difficult to define scope and deliverables upfront, posing a risk to project timelines and budget adherence.

Positive Signals

Awarded under full and open competition, indicating a fair and transparent procurement process.
The contract duration of nearly 5 years suggests a stable, long-term commitment to a specific research area.
The fixed fee component of the contract provides a degree of cost certainty for the government once the fee is established.

Sector Analysis

This contract falls within the Scientific Research and Development Services sector, specifically focusing on physical, engineering, and life sciences. This sector is characterized by innovation, specialized expertise, and often long-term projects. Federal spending in this area supports advancements across various fields, from medicine to materials science. Comparable spending benchmarks would involve analyzing other large R&D grants and contracts awarded by agencies like NIH, NSF, and DOD to research institutions and private companies.

Small Business Impact

There is no indication that this contract was set aside for small businesses, and the prime contractor, Southern Research Institute, is a large research organization. The contract does not explicitly mention subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal, though indirect benefits could arise if the research leads to new technologies or opportunities that small businesses can later leverage.

Oversight & Accountability

Oversight for this contract would primarily reside with the National Institutes of Health (NIH), the awarding agency. Mechanisms likely include regular progress reports from the contractor, performance reviews, and financial audits to ensure compliance with the contract terms and responsible use of funds. The Inspector General's office for the Department of Health and Human Services would have jurisdiction for investigating fraud, waste, or abuse related to this contract.

Related Government Programs

NIH Research Grants
NSF Research and Development Contracts
Department of Defense R&D
Biomedical Research
Engineering Services Contracts

Risk Flags

Potential for cost overruns inherent in CPFF contracts.
Limited competition may impact long-term pricing dynamics.
Scope definition challenges in novel R&D projects.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $30.7 million to SOUTHERN RESEARCH INSTITUTE. R&D IN THE PHYSICAL, ENGINEERING AND LIFE SCIENCES

Who is the contractor on this award?

The obligated recipient is SOUTHERN RESEARCH INSTITUTE.

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 $30.7 million.

What is the period of performance?

Start: 2007-12-21. End: 2012-09-30.

What is Southern Research Institute's track record with federal R&D contracts, particularly with NIH?

Southern Research Institute has a significant history of performing research and development for various federal agencies, including NIH. Their expertise spans multiple scientific disciplines relevant to this contract. Analyzing their past performance on similar Cost Plus Fixed Fee (CPFF) contracts would reveal their ability to manage costs and deliver results within budget and schedule. A review of past performance evaluations and any documented issues or successes on prior federal awards would provide further insight into their reliability and capability as a contractor for complex R&D endeavors.

How does the $30.7 million award compare to other NIH R&D contracts of similar scope and duration?

The $30.7 million award over approximately five years, averaging around $6.14 million annually, appears to be a substantial but not extraordinary amount for a large-scale R&D project funded by NIH. NIH funds a wide array of research, from small grants to major center grants and large contracts. Contracts of this magnitude are typically awarded for complex, multi-disciplinary research initiatives requiring significant resources and specialized facilities. Without access to a comprehensive database of NIH contract values for specific R&D areas (e.g., specific disease research, engineering challenges), a precise comparison is difficult. However, it aligns with the scale of funding often seen for significant research efforts within the life and physical sciences.

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

The primary risks associated with a CPFF contract for R&D revolve around cost control and scope definition. While the fixed fee provides the contractor with an incentive to control costs (as their profit is capped), the government bears the risk of all allowable costs. If the R&D effort encounters unforeseen challenges or requires more resources than initially estimated, the total cost to the government can escalate significantly. Additionally, defining the precise scope and deliverables for novel R&D can be challenging, potentially leading to disputes or changes in direction that impact cost and schedule. Effective government oversight is crucial to mitigate these risks by closely monitoring expenditures and ensuring the R&D stays aligned with program objectives.

What specific R&D areas does the NAICS code 541710 (Research and Development in the Physical, Engineering, and Life Sciences) encompass?

NAICS code 541710 covers establishments primarily engaged in conducting research and development in the physical, engineering, and life sciences. This includes basic research, applied research, and experimental development. Examples include research in areas such as aerospace engineering, biotechnology, computer hardware and software development, materials science, nanotechnology, environmental science, and medical research. It encompasses a broad spectrum of scientific inquiry and technological innovation, excluding research focused solely on social sciences or market research.

What does the contract award date (2007-12-21) and end date (2012-09-30) indicate about the program's lifecycle?

The award date of December 21, 2007, and the end date of September 30, 2012, indicate that this contract was awarded during the latter part of the George W. Bush administration and concluded during the Obama administration. The duration of the contract, spanning nearly five years (approximately 1745 days), suggests a significant, long-term research project that required sustained effort and funding. Such extended periods are common for complex R&D initiatives where breakthroughs and development cycles can take considerable time. The completion of the contract implies that the research objectives, as defined at the time of award, were either met, modified, or concluded within this timeframe.

Given the 'FULL AND OPEN COMPETITION' and only two bidders, what might this imply about the specialized nature of the R&D required?

The fact that the contract was awarded under 'FULL AND OPEN COMPETITION' yet only attracted two bidders suggests that the specific research and development required likely falls into a niche or highly specialized area. Full and open competition means the process was designed to allow any qualified entity to bid. The limited number of responses could indicate high barriers to entry, such as the need for unique intellectual property, highly specialized equipment, rare scientific expertise, or significant prior experience in a very specific scientific domain. This specialization might justify the higher cost or complexity associated with the research, and it implies that only a few organizations possessed the necessary capabilities to compete effectively.

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: MISCELLANEOUS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: RFPNIHNIAIDDMID0339

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 2000 9TH AVE S, BIRMINGHAM, AL, 90

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

Financial Breakdown

Contract Ceiling: $30,667,259

Exercised Options: $30,667,259

Current Obligation: $30,667,259

Contract Characteristics

Multi-Year Contract: Yes

Parent Contract

Parent Award PIID: 266030063

IDV Type: IDC

Timeline