DoD spent $48.4M on algal-derived JP-8 surrogate research, awarded to General Atomics
Contract Overview
Contract Amount: $48,408,024 ($48.4M)
Contractor: General Atomics
Awarding Agency: Department of Defense
Start Date: 2008-12-08
End Date: 2012-03-31
Contract Duration: 1,209 days
Daily Burn Rate: $40.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 17
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: PHASE I - ALGAL-DERIVED JP-8 SURROGATE
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92121
Plain-Language Summary
Department of Defense obligated $48.4 million to GENERAL ATOMICS for work described as: PHASE I - ALGAL-DERIVED JP-8 SURROGATE Key points: 1. Contract awarded for research and development in biotechnology, focusing on advanced fuel alternatives. 2. The contract duration was 1209 days, indicating a substantial research effort. 3. General Atomics, a large defense contractor, secured this award. 4. The contract type was Cost Plus Fixed Fee, common in R&D where final costs are uncertain. 5. This award falls under the Research and Development in Biotechnology NAICS code. 6. The contract was awarded by the Defense Contract Management Agency. 7. The contract was not set aside for small businesses.
Value Assessment
Rating: fair
The contract value of $48.4 million for a 3-year R&D project in biotechnology is within a reasonable range for specialized research. However, without specific benchmarks for algal-derived fuel surrogate development, a precise value-for-money assessment is challenging. The Cost Plus Fixed Fee structure means the government pays actual costs plus a negotiated fee, which can lead to cost overruns if not managed tightly. Comparing this to other similar R&D efforts in advanced biofuels would provide better context.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting that multiple bidders had the opportunity to submit proposals. With 17 bidders, the competition level appears robust, which typically drives better pricing and innovation. This broad competition is a positive sign for price discovery and ensuring the government receives competitive proposals for complex research.
Taxpayer Impact: A high number of bidders in a full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower overall costs and higher quality research outcomes.
Public Impact
The Department of Defense benefits from research into alternative and sustainable aviation fuels, potentially reducing reliance on traditional petroleum-based JP-8. This contract supports the development of advanced biotechnology solutions for military applications. The research conducted could have broader implications for the renewable energy sector. The project likely involved highly skilled scientists and researchers, contributing to the specialized workforce in biotechnology and alternative fuels.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contracts can incentivize contractors to incur costs without strict financial risk, potentially leading to higher final expenditures than anticipated.
- The long duration of the contract (over 3 years) increases the risk of scope creep or evolving research needs that may not be fully captured in the initial award.
- The specialized nature of the research means that assessing the contractor's performance against clear, objective metrics might be difficult until the research outcomes are realized.
Positive Signals
- Awarding to General Atomics, a company with a significant track record in defense contracting and advanced technologies, suggests a level of confidence in their capabilities.
- The use of full and open competition with 17 bidders indicates a strong market interest and a potentially wide pool of qualified contractors.
- The focus on developing alternative aviation fuels aligns with strategic goals for energy independence and environmental sustainability within the DoD.
Sector Analysis
This contract falls within the Research and Development (R&D) sector, specifically focusing on biotechnology and advanced materials for fuel applications. The market for advanced biofuels and synthetic fuels is growing, driven by environmental regulations and the need for energy security. The Department of Defense is a significant investor in R&D for next-generation technologies, including alternative fuels, to reduce operational costs and environmental impact. Comparable spending benchmarks for similar R&D projects in advanced materials and biotechnology can vary widely depending on the complexity and novelty of the research.
Small Business Impact
This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award to a large, established contractor like General Atomics suggests that the primary focus was on technical capability and past performance rather than small business participation. This means the direct impact on the small business ecosystem for this specific contract is likely minimal, though General Atomics may engage small businesses as subcontractors independently.
Oversight & Accountability
The Defense Contract Management Agency (DCMA) is responsible for overseeing contract performance, including cost, schedule, and technical aspects. For Cost Plus Fixed Fee contracts, oversight is crucial to ensure that costs are reasonable and allocable, and that the fixed fee is earned. Transparency is generally maintained through contract reporting mechanisms, but detailed public access to R&D progress reports can be limited due to the sensitive nature of the research. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Department of Defense Research and Development Programs
- Advanced Aviation Fuel Initiatives
- Biotechnology Research Contracts
- Alternative Energy Research
Risk Flags
- Cost Plus Fixed Fee contract type requires diligent oversight to manage potential cost growth.
- Research and Development projects inherently carry technical and scientific uncertainty.
- Long contract duration increases risk of scope changes or technology obsolescence.
- Transition from R&D to deployable solution requires further investment and development.
Tags
defense, department-of-defense, general-atomics, research-and-development, biotechnology, alternative-fuels, cost-plus-fixed-fee, full-and-open-competition, definitive-contract, california, large-contractor
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $48.4 million to GENERAL ATOMICS. PHASE I - ALGAL-DERIVED JP-8 SURROGATE
Who is the contractor on this award?
The obligated recipient is GENERAL ATOMICS.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $48.4 million.
What is the period of performance?
Start: 2008-12-08. End: 2012-03-31.
What is General Atomics' track record with Cost Plus Fixed Fee (CPFF) contracts, particularly in R&D?
General Atomics has extensive experience with various contract types, including CPFF, across numerous defense and energy projects. Their track record with CPFF contracts in R&D is generally strong, characterized by their ability to manage complex technical challenges and evolving project scopes. However, like all CPFF contracts, there's an inherent risk of cost growth if project requirements shift significantly or if initial cost estimates prove inaccurate. Detailed analysis of their specific performance on similar R&D CPFF contracts would involve reviewing past performance evaluations and any documented cost variances to assess their efficiency and adherence to budget projections. Their large size and established infrastructure suggest they possess the resources to manage such contracts effectively, but rigorous oversight remains essential.
How does the $48.4 million cost compare to similar R&D projects for alternative aviation fuels?
Benchmarking the $48.4 million cost for this specific R&D project requires comparing it to similar contracts for the development of algal-derived or other advanced aviation fuel surrogates. Such projects are highly specialized, and costs can vary significantly based on the maturity of the technology, the specific research objectives, and the duration of the effort. Generally, R&D contracts of this magnitude (spanning several years and involving complex scientific inquiry) are not uncommon within the defense sector's pursuit of energy independence and advanced materials. Without access to a comprehensive database of comparable R&D contracts in this niche area, a precise comparison is difficult. However, the number of bidders (17) suggests that the price was perceived as competitive within the market for such specialized research.
What are the primary risks associated with this contract, beyond cost overruns?
Beyond potential cost overruns inherent in CPFF contracts, key risks include technical feasibility and research outcomes. The development of novel fuel surrogates faces scientific uncertainty; the research may not yield a viable or scalable product within the projected timeline or budget. Another risk is the potential for obsolescence if newer, more promising technologies emerge during the contract's duration. Furthermore, the transition from a research surrogate to a deployable fuel requires further development and testing, which is not covered by this contract, introducing a 'valley of death' risk for the technology's ultimate adoption. Ensuring the research aligns with evolving DoD operational requirements and environmental standards also presents a risk.
How effective is the Cost Plus Fixed Fee (CPFF) contract type for R&D in biotechnology?
The CPFF contract type is often used for R&D, particularly in fields like biotechnology where the final scope, technical challenges, and costs are difficult to predict accurately at the outset. It allows the government to leverage contractor expertise while sharing the financial risk. The 'fixed fee' provides an incentive for the contractor to complete the work efficiently to maximize their profit. However, CPFF contracts require robust government oversight to ensure costs are reasonable and allocable, and to prevent potential contractor complacency or cost inflation. For biotechnology R&D, where innovation and exploration are paramount, CPFF can be effective in encouraging the pursuit of novel solutions, but it necessitates careful management and clear communication between the government and the contractor.
What is the historical spending trend for R&D in biotechnology by the Department of Defense?
The Department of Defense consistently invests in Research and Development across various scientific disciplines, including biotechnology. Historical spending trends show a significant and often increasing allocation towards R&D aimed at enhancing warfighter capabilities, improving logistics (like alternative fuels), and developing advanced materials. Biotechnology R&D is particularly crucial for areas such as medical countermeasures, performance enhancement, and novel materials. While specific figures fluctuate annually based on strategic priorities and budget allocations, the DoD's commitment to advancing biotechnology research has been a long-standing priority, driven by national security imperatives and the desire to maintain technological superiority.
What are the implications of awarding this contract to General Atomics for future competition in this niche?
Awarding this significant R&D contract to General Atomics, a large and established defense contractor, could have mixed implications for future competition. On one hand, it validates their capabilities in this specialized area, potentially making them a preferred bidder for future, similar contracts. On the other hand, it might deter smaller, more specialized firms from competing if they perceive the barrier to entry (in terms of resources, experience, and established relationships) as too high. The robust initial competition (17 bidders) suggests a healthy market currently exists, but sustained investment in R&D by large primes could consolidate expertise and potentially limit future opportunities for emerging players unless specific set-asides or teaming requirements are implemented.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in Biotechnology
Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: BASIC RESEARCH
Offers Received: 17
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 3550 GENERAL ATOMICS CT, SAN DIEGO, CA, 92121
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $48,408,024
Exercised Options: $48,408,024
Current Obligation: $48,408,024
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2008-12-08
Current End Date: 2012-03-31
Potential End Date: 2012-03-31 00:00:00
Last Modified: 2015-11-17
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