DoD's $17.35M contract for biotech R&D awarded to SNA International LLC, lacking competition

Contract Overview

Contract Amount: $17,353,984 ($17.4M)

Contractor: SNA International LLC

Awarding Agency: Department of Defense

Start Date: 2024-05-01

End Date: 2025-10-31

Contract Duration: 548 days

Daily Burn Rate: $31.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: R&D

Official Description: SCIENTIFIC, TECHNICAL, ADMINISTRATIVE AND LOGISTICAL SUPPORT SERVICES

Place of Performance

Location: DOVER AFB, KENT County, DELAWARE, 19902

State: Delaware Government Spending

Plain-Language Summary

Department of Defense obligated $17.4 million to SNA INTERNATIONAL LLC for work described as: SCIENTIFIC, TECHNICAL, ADMINISTRATIVE AND LOGISTICAL SUPPORT SERVICES Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential overpayment. 2. The contract duration of 548 days suggests a significant scope of work for research and development. 3. Focus on Biotechnology R&D (NAICS 541714) indicates specialized scientific services. 4. The firm fixed-price contract type aims to control costs, but the lack of competition limits benchmarking. 5. No small business set-aside was applied, potentially limiting opportunities for smaller specialized firms. 6. The Defense Health Agency is the contracting entity, suggesting a focus on medical or biological research.

Value Assessment

Rating: questionable

Benchmarking the value of this $17.35 million contract is challenging due to its sole-source nature. Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value. The firm fixed-price structure provides some cost certainty, but the absence of competition means there's no direct comparison to similar contracts awarded through a competitive process. Further analysis would require access to detailed cost breakdowns and market research data for comparable biotechnology R&D services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source procurement method, meaning only one vendor, SNA International LLC, was solicited. This approach is typically used when only one source is capable of meeting the agency's needs, often due to unique capabilities or proprietary technology. The lack of competition means that the Defense Health Agency did not benefit from the price reductions and innovation that can arise from a bidding process.

Taxpayer Impact: Taxpayers may not be receiving the best possible value, as the absence of competition limits the government's ability to negotiate the lowest price. This could lead to higher overall spending for the services rendered.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Defense Health Agency, which will receive specialized scientific support. The contract supports research and development in biotechnology, potentially leading to advancements in medical treatments or defense-related biological applications. The geographic impact is primarily within Delaware, where the contractor is based, but the research outcomes could have national or global implications. The contract may indirectly impact the scientific workforce by engaging specialized researchers and technicians.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential value for money.
Lack of transparency in the justification for sole-source award.
Potential for cost overruns if pricing was not adequately vetted due to lack of competition.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Contract awarded to a specific entity likely possessing unique and necessary expertise for the R&D.
Contract duration allows for focused and potentially in-depth research.

Sector Analysis

The contract falls within the Research and Development in Biotechnology sector, a highly specialized area. This sector is characterized by significant investment in innovation, long development cycles, and often requires unique expertise. The market size for such specialized R&D services can be substantial, driven by government funding for defense, health, and scientific advancement. This contract represents a specific allocation of resources within the broader biotechnology R&D landscape, likely supporting critical defense health initiatives.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The sole-source nature of the award further limits the potential for small business participation, as the primary contract is directly with SNA International LLC. This approach may bypass the typical mechanisms designed to ensure small business engagement in federal contracting.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the Defense Health Agency. As a definitive contract, it is subject to standard federal procurement regulations and oversight. The firm fixed-price nature provides a degree of financial oversight by fixing the total cost. However, the lack of competition might reduce the intensity of oversight focused on price negotiation and benchmarking.

Related Government Programs

Biotechnology Research and Development
Defense Health Programs
Scientific and Technical Support Services
Federal Research Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for unverified pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.4 million to SNA INTERNATIONAL LLC. SCIENTIFIC, TECHNICAL, ADMINISTRATIVE AND LOGISTICAL SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is SNA INTERNATIONAL LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Health Agency).

What is the total obligated amount?

The obligated amount is $17.4 million.

What is the period of performance?

Start: 2024-05-01. End: 2025-10-31.

What is the specific nature of the biotechnology R&D being conducted under this contract?

The provided data indicates the contract is for 'Research and Development in Biotechnology (except Nanobiotechnology)' under NAICS code 541714. While the specific project details are not available in the summary data, this classification suggests work related to biological sciences, potentially including areas like genetic engineering, molecular biology, or pharmaceutical development. Given the contracting agency is the Defense Health Agency, the research may be focused on areas relevant to military health, such as infectious disease countermeasures, advanced diagnostics, or therapeutic interventions for service members.

Why was this contract awarded on a sole-source basis instead of through full and open competition?

Sole-source awards are typically justified when only one responsible source is available or capable of meeting the agency's requirements. For research and development contracts, this can occur if the contractor possesses unique intellectual property, specialized facilities, or highly specific expertise that cannot be replicated by other firms within the required timeframe. The Defense Health Agency would have had to document the specific reasons and justifications for limiting the competition to SNA International LLC, often citing factors like proprietary technology, critical urgency, or a lack of available alternatives in the market.

How does the firm fixed-price contract type mitigate risks for the government in a sole-source scenario?

A firm fixed-price (FFP) contract establishes a ceiling price that the contractor agrees not to exceed. In a sole-source situation, where competitive pressure on price is absent, the FFP structure provides the government with a degree of cost certainty. It shifts the risk of cost overruns to the contractor, who must absorb any expenses exceeding the agreed-upon price. While this protects the government from unexpected cost increases, it does not guarantee that the initial fixed price represents the best possible value, as it was not determined through a competitive bidding process.

What is the typical duration and value range for similar biotechnology R&D contracts awarded by the Department of Defense?

The duration of this contract is 548 days (approximately 18 months), and its value is $17.35 million. Without access to a comprehensive database of comparable DoD biotechnology R&D contracts, providing an exact range is difficult. However, R&D projects in this sector can vary significantly in scope and cost. Contracts can range from a few million dollars for focused research efforts to tens or even hundreds of millions for large-scale, multi-year programs. The duration of 18 months suggests a substantial, but not exceptionally long, research undertaking.

What are the potential implications of awarding a sole-source contract for specialized R&D on the broader biotechnology market?

Sole-source awards, while sometimes necessary, can have implications for the broader market. They limit opportunities for other companies, including small businesses and emerging firms, to demonstrate their capabilities and secure government funding. This can potentially stifle innovation and competition in the long run if certain companies become overly reliant on non-competitive contracts. For the biotechnology sector, which thrives on innovation and diverse approaches, ensuring a balance between necessary sole-source awards and robust competitive procurements is crucial for market health and technological advancement.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in Biotechnology (except Nanobiotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › N – Health R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 500 MONTGOMERY ST, ALEXANDRIA, VA, 22314

Business Categories: 8(a) Program Participant, Category Business, Limited Liability Corporation, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $17,366,484

Exercised Options: $17,366,484

Current Obligation: $17,353,984

Actual Outlays: $2,887,727

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline