DoD's $48.3M R&D Contract for JFTM-3 with Orbital Sciences LLC Raises Questions on Competition
Contract Overview
Contract Amount: $48,294,874 ($48.3M)
Contractor: Orbital Sciences LLC
Awarding Agency: Department of Defense
Start Date: 2008-07-21
End Date: 2012-09-30
Contract Duration: 1,532 days
Daily Burn Rate: $31.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: R&D
Official Description: MEDIUM RANGE TARGET (MRT) FOR JFTM-3
Place of Performance
Location: CHANDLER, MARICOPA County, ARIZONA, 85224
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $48.3 million to ORBITAL SCIENCES LLC for work described as: MEDIUM RANGE TARGET (MRT) FOR JFTM-3 Key points: 1. The contract awarded to Orbital Sciences LLC for $48.3 million focuses on Research and Development in Physical Sciences. 2. Awarded as 'NOT COMPETED', this raises immediate concerns about potential lack of competitive pricing and value. 3. The duration of the contract (over 4 years) suggests a significant investment, amplifying the need for robust oversight. 4. The specific NAICS code (541712) indicates a focus on R&D, a sector where innovation and cost-effectiveness can be challenging to balance.
Value Assessment
Rating: questionable
Without competitive bidding, it is difficult to assess if the $48.3 million price represents fair market value. The lack of competition prevents benchmarking against similar R&D contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This limits price discovery and may lead to higher costs for the government compared to a competitive process.
Taxpayer Impact: The absence of competition could result in taxpayers paying more than necessary for the research and development services provided.
Public Impact
Taxpayers may be overpaying due to the lack of competitive bidding on this significant R&D contract. The Missile Defense Agency's reliance on a single vendor for this critical technology warrants scrutiny. The long contract duration suggests a substantial commitment of public funds without guaranteed best value.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- Potential for Overpricing
- Limited Oversight Due to Sole Source
Positive Signals
- Focus on critical R&D for Missile Defense
Sector Analysis
This contract falls under Research and Development in Physical, Engineering, and Life Sciences (NAICS 541712). R&D spending can be complex, with benchmarks varying widely based on the specific field and innovation required. The $48.3M value is moderate for a multi-year R&D effort.
Small Business Impact
There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. The sole-source nature of the award further limits opportunities for small business participation.
Oversight & Accountability
The 'NOT COMPETED' status necessitates strong oversight to ensure the contractor is delivering on objectives and that costs are reasonable, despite the absence of a competitive baseline. The contract duration of over four years requires ongoing monitoring.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
- Department of Defense Contracting
- Missile Defense Agency Programs
Risk Flags
- Sole-source award bypasses competitive pricing.
- Potential for inflated costs due to lack of competition.
- Limited transparency in price discovery.
- Long contract duration increases financial exposure.
- Need for enhanced oversight to ensure value.
Tags
research-and-development-in-the-physical, department-of-defense, az, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $48.3 million to ORBITAL SCIENCES LLC. MEDIUM RANGE TARGET (MRT) FOR JFTM-3
Who is the contractor on this award?
The obligated recipient is ORBITAL SCIENCES LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Missile Defense Agency).
What is the total obligated amount?
The obligated amount is $48.3 million.
What is the period of performance?
Start: 2008-07-21. End: 2012-09-30.
What was the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure the price was fair and reasonable?
The justification for a sole-source award is crucial for understanding why competition was bypassed. Agencies typically require detailed documentation outlining the necessity of a specific contractor's unique capabilities or urgent requirements. Without this justification, it's difficult to assess if the $48.3 million price reflects fair market value or if taxpayers are bearing an unnecessary cost premium due to the lack of competitive pressure.
How will the Missile Defense Agency ensure cost-effectiveness and prevent potential overruns on this $48.3 million R&D contract awarded without competition?
Given the sole-source nature, robust cost-control mechanisms are essential. This includes detailed performance metrics, regular progress reviews, and potentially independent cost analysis. The agency must actively manage the contract to ensure that the research objectives are met efficiently and that the final cost remains within the allocated $48.3 million, mitigating the risks associated with a lack of competitive benchmarking.
What are the specific deliverables and expected outcomes for the JFTM-3 research, and how will their success be measured to justify the $48.3 million investment?
Defining clear, measurable deliverables and success criteria is paramount for any R&D contract, especially one awarded non-competitively. The Missile Defense Agency needs to establish specific technical milestones and performance standards for the JFTM-3 project. Evaluating the contractor's achievement against these predefined metrics will be the primary method to determine the effectiveness and value of the $48.3 million investment, ensuring accountability for public funds.
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: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: HQ014708R0009
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 3380 S PRICE RD, CHANDLER, AZ, 90
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $48,294,874
Exercised Options: $48,294,874
Current Obligation: $48,294,874
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2008-07-21
Current End Date: 2012-09-30
Potential End Date: 2012-09-30 00:00:00
Last Modified: 2012-08-20
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