DoD awards $52.3M for Gremlins Program Phase III to Dynetics, Inc

Contract Overview

Contract Amount: $52,365,640 ($52.4M)

Contractor: Dynetics, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-04-17

End Date: 2025-10-31

Contract Duration: 2,754 days

Daily Burn Rate: $19.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: NEW CONTRACT AWARD FOR THE GREMLINS PROGRAM, PHASE III.

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35806

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $52.4 million to DYNETICS, INC. for work described as: NEW CONTRACT AWARD FOR THE GREMLINS PROGRAM, PHASE III. Key points: 1. Contract awarded via full and open competition, suggesting a robust bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. The duration of over 2700 days indicates a long-term, complex project. 4. The awardee, Dynetics, Inc., has a track record with the Department of Defense. 5. The contract falls under Research and Development in Physical, Engineering, and Life Sciences. 6. The geographic location of performance is Alabama.

Value Assessment

Rating: fair

The contract value of $52.3 million over approximately 7.5 years averages to about $7 million per year. Without specific performance metrics or deliverables, it's difficult to benchmark value for money. The Cost Plus Fixed Fee structure means the government pays costs plus a fixed fee, which can incentivize contractors to incur costs to increase their fee if not properly structured. Further analysis would require understanding the specific R&D objectives and milestones.

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 a bid. The data shows 2 offers were received. This level of competition is generally positive for price discovery, though the number of bidders is relatively low for a contract of this potential scope.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices and encourages innovation by allowing a wider range of contractors to compete.

Public Impact

The primary beneficiaries are the Department of Defense and potentially the warfighter, through advancements in defense technology. The contract supports research and development activities, likely leading to new or improved defense capabilities. Geographic impact is concentrated in Alabama, where Dynetics, Inc. is located and where performance is expected. Workforce implications include employment opportunities for scientists, engineers, and support staff within Dynetics and its potential subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts carry inherent risks of cost escalation if not closely monitored.
A low number of bids (2) could indicate limited market interest or high barriers to entry for this specific R&D area.
The long contract duration increases the risk of scope creep or obsolescence of developed technologies.

Positive Signals

Awarded through full and open competition, suggesting a fair and accessible bidding process.
The contractor, Dynetics, Inc., is likely experienced in defense contracting, reducing execution risk.
The contract supports critical R&D for national defense, aligning with strategic government objectives.

Sector Analysis

This contract falls within the broader Research and Development sector, specifically focusing on physical, engineering, and life sciences. The defense R&D market is substantial, with significant government investment aimed at maintaining technological superiority. Comparable spending benchmarks are difficult to establish without knowing the specific technological domain of the Gremlins Program, but defense R&D contracts often range from millions to billions of dollars.

Small Business Impact

The contract data indicates that small business participation (ss: false, sb: false) was not a primary set-aside criterion for this award. There is no explicit mention of subcontracting goals for small businesses. This suggests that the primary contractor, Dynetics, Inc., will likely handle the majority of the work, with potential for small business involvement being dependent on Dynetics' own subcontracting strategy.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense and the Defense Advanced Research Projects Agency (DARPA). As a Cost Plus Fixed Fee contract, rigorous financial oversight and performance monitoring are crucial to ensure costs are reasonable and the fixed fee is earned. Inspector General jurisdiction would apply to investigate fraud, waste, or abuse.

Related Government Programs

DARPA Research and Development Programs
Advanced Weapons Systems Development
Unmanned Systems Research
Aerospace Engineering Contracts

Risk Flags

Cost Overruns Potential (CPFF)
Technological Obsolescence Risk
Long Duration Project Management Challenges
Limited Competition (2 offers)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $52.4 million to DYNETICS, INC.. NEW CONTRACT AWARD FOR THE GREMLINS PROGRAM, PHASE III.

Who is the contractor on this award?

The obligated recipient is DYNETICS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Advanced Research Projects Agency).

What is the total obligated amount?

The obligated amount is $52.4 million.

What is the period of performance?

Start: 2018-04-17. End: 2025-10-31.

What is the specific technological objective of the Gremlins Program, Phase III, and how does this contract contribute to achieving it?

The Gremlins Program, managed by DARPA, aims to develop a system of affordable, reusable "swarming" drones that can be launched from multiple platforms and recovered in mid-air. Phase III likely focuses on advanced development, integration, and testing of key technologies identified in earlier phases. This contract with Dynetics, Inc. would support the engineering, prototyping, and demonstration of these advanced capabilities, moving the program closer to operational deployment. The specific objectives would involve maturing the drone's autonomy, communication, control systems, and recovery mechanisms to meet stringent performance requirements set by DARPA.

How does the Cost Plus Fixed Fee (CPFF) contract structure compare to other contract types for R&D, and what are the associated risks?

Cost Plus Fixed Fee (CPFF) contracts are common for R&D where the scope is not fully defined, allowing flexibility. The government agrees to pay the contractor's allowable costs plus a predetermined fixed fee representing profit. Risks include potential cost overruns if the contractor has weak cost controls or if unforeseen technical challenges significantly increase expenses. The fixed fee, however, provides some cost certainty compared to Cost Plus Incentive Fee (CPIF) or Cost Plus Award Fee (CPAF) contracts. For taxpayers, CPFF requires diligent oversight to ensure costs are reasonable and the fee is justified by performance.

What is Dynetics, Inc.'s track record with similar R&D contracts, particularly with DARPA or the Department of Defense?

Dynetics, Inc. has a significant history of contracting with the Department of Defense and various agencies, including DARPA. They have been involved in numerous advanced technology development programs, often focusing on areas like aerospace, unmanned systems, and advanced materials. Their experience suggests a strong capability to handle complex R&D projects. Specific past performance on programs similar in scope or technological domain to Gremlins would be detailed in their proposal and assessed by DARPA during the source selection process, influencing the 'fair' rating.

How does the $52.3 million award compare to historical spending on the Gremlins Program or similar DARPA initiatives?

Without access to the full historical spending data for the Gremlins Program across all its phases and contractors, a direct comparison is challenging. However, $52.3 million for a Phase III R&D effort over approximately 7.5 years is a substantial investment, indicative of a program with significant technical challenges and potential. DARPA typically funds high-risk, high-reward research, and contract values can vary widely. This award appears consistent with the scale of funding often seen in advanced technology development programs managed by DARPA, which can range from tens to hundreds of millions of dollars over their lifecycle.

What are the potential risks associated with the long contract duration (2754 days) for this R&D effort?

A contract duration of over 7.5 years for an R&D program presents several risks. Firstly, technological obsolescence is a significant concern; the technologies being developed might be surpassed by advancements elsewhere before the program concludes. Secondly, maintaining focus and momentum over such an extended period can be challenging, potentially leading to scope creep or shifts in program objectives. Thirdly, the government's budget priorities might change, impacting future funding availability. Finally, contractor personnel turnover over such a long period could lead to knowledge loss and require extensive retraining.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and 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: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1002 EXPLORER BLVD, HUNTSVILLE, AL, 35806

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $57,666,813

Exercised Options: $52,365,640

Current Obligation: $52,365,640

Actual Outlays: $1,560,447

Subaward Activity

Number of Subawards: 13

Total Subaward Amount: $3,287,133

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline