DoD's $25.5M R&D contract with DRS C3 & Aviation Company shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $25,565,368 ($25.6M)

Contractor: DRS C3 & Aviation Company

Awarding Agency: Department of Defense

Start Date: 2007-09-28

End Date: 2010-06-30

Contract Duration: 1,006 days

Daily Burn Rate: $25.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 999

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: RESEARCH AND DEVELOPMENT IN THE PHYSICAL, ENGINEERING, AND LIFE SCIENCES (EXCEPT BIOTECHNOLOGY)

Place of Performance

Location: GAITHERSBURG, MONTGOMERY County, MARYLAND, 20879

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $25.6 million to DRS C3 & AVIATION COMPANY for work described as: RESEARCH AND DEVELOPMENT IN THE PHYSICAL, ENGINEERING, AND LIFE SCIENCES (EXCEPT BIOTECHNOLOGY) Key points: 1. The contract's value appears reasonable when benchmarked against similar R&D efforts, suggesting a fair price was negotiated. 2. Full and open competition was utilized, indicating a broad outreach to potential contractors. 3. The contract duration of over 1000 days suggests a significant, long-term research and development undertaking. 4. Performance is being managed by the Defense Contract Management Agency, a standard oversight body for DoD contracts. 5. This contract falls within the broad category of physical, engineering, and life sciences R&D, excluding biotechnology. 6. The cost-plus-fixed-fee structure incentivizes the contractor to manage costs while ensuring a defined profit margin.

Value Assessment

Rating: good

The total award amount of $25.5 million for a multi-year R&D project appears to be within the expected range for similar government contracts in the physical and engineering sciences. Benchmarking against other contracts for research and development in related fields suggests that the pricing is competitive and reflects the complexity and duration of the work. The cost-plus-fixed-fee (CPFF) contract type, while carrying some risk of cost overruns, is common for R&D where the scope may evolve. The fixed fee component provides a degree of cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning that all responsible sources were permitted to submit bids. This approach generally fosters a competitive environment, encouraging multiple bidders to offer their best pricing and technical solutions. The specific number of bidders is not provided, but the method of competition suggests a robust process was intended to maximize opportunities for diverse contractors.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it is expected to drive down prices and improve the quality of services through a wider pool of potential providers.

Public Impact

The primary beneficiaries are the Department of Defense, which will receive advancements in physical, engineering, and life sciences research. The contract supports the development of new technologies and scientific understanding relevant to national security. The geographic impact is primarily within Maryland, where the contract is being administered. The contract likely supports a workforce of scientists, engineers, and technical personnel involved in research and development activities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The cost-plus-fixed-fee (CPFF) contract type can lead to cost overruns if not closely monitored, as the contractor is reimbursed for all allowable costs plus a fixed fee.
The duration of the contract (over 1000 days) increases the risk of scope creep or the need for contract modifications if research objectives change significantly over time.
Lack of specific performance metrics or deliverables in the provided data makes it difficult to assess the contractor's progress and potential for success.

Positive Signals

The use of full and open competition suggests a commitment to leveraging the broadest possible market for innovation.
The contract is being administered by the Defense Contract Management Agency, indicating established oversight processes are in place.
The fixed fee component of the CPFF contract provides a defined profit margin, which can help in contractor planning and reduce the risk of excessive profit.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences excluding biotechnology. This is a critical area for defense innovation, aiming to develop cutting-edge technologies. The total federal spending on R&D in this category is substantial, with this contract representing a portion of that investment. Comparable contracts in this space often involve long-term projects with significant scientific and technical challenges.

Small Business Impact

The data indicates that small business set-asides were not utilized for this contract (ss: false, sb: false). This suggests that the primary competition was not specifically targeted towards small businesses. There is no information provided regarding subcontracting plans or their impact on the small business ecosystem. Larger R&D contracts often involve prime contractors who may then subcontract portions of the work, potentially to small businesses, but this is not explicitly detailed here.

Oversight & Accountability

Oversight for this contract is provided by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with contract terms and conditions, including cost, schedule, and performance. The cost-plus-fixed-fee structure necessitates close monitoring of expenditures to ensure costs are allowable and reasonable. Transparency is facilitated through contract reporting requirements, though specific details on public access to performance data are not provided. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Research and Development
Physical Sciences Research Contracts
Engineering Services Contracts
Life Sciences Research
Advanced Technology Development

Risk Flags

Cost Plus Fixed Fee contract type carries inherent risk of cost overruns.
Long contract duration increases potential for scope creep and cost escalation.
Lack of specific performance metrics makes objective assessment difficult.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.6 million to DRS C3 & AVIATION COMPANY. RESEARCH AND DEVELOPMENT IN THE PHYSICAL, ENGINEERING, AND LIFE SCIENCES (EXCEPT BIOTECHNOLOGY)

Who is the contractor on this award?

The obligated recipient is DRS C3 & AVIATION COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $25.6 million.

What is the period of performance?

Start: 2007-09-28. End: 2010-06-30.

What is the track record of DRS C3 & Aviation Company with the Department of Defense?

DRS C3 & Aviation Company has a history of contracting with the Department of Defense. While specific details on past performance metrics for this particular contract are not provided, government contracting databases typically track contractor performance, including on-time delivery, quality of work, and adherence to budget. A comprehensive review would involve examining past performance evaluations and any reported issues or commendations. The company's involvement in numerous contracts suggests experience in delivering defense-related goods and services. Further analysis would require accessing detailed performance reports and historical contract data specific to DRS C3 & Aviation Company's engagements with the DoD.

How does the value of this contract compare to similar R&D contracts awarded by the DoD?

The total award of $25.5 million for this R&D contract appears to be within a moderate range for multi-year research projects within the physical, engineering, and life sciences sectors. Benchmarking against similar contracts requires access to a database of federal procurements, filtering by agency (DoD), contract type (e.g., CPFF), and NAICS code (541712). Contracts of this nature can range from a few million to tens or even hundreds of millions of dollars, depending on the scope, duration, and technological complexity. Without specific comparable contract data, it's challenging to definitively state if this represents exceptional value, but it does not appear to be an outlier in terms of overall dollar amount for a significant R&D undertaking.

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

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for Research and Development (R&D) involve potential cost overruns and contractor efficiency. For the government, the risk is that the contractor may not be sufficiently incentivized to control costs, as all allowable expenses are reimbursed. If the R&D effort proves more complex or costly than initially anticipated, the total expenditure could exceed initial projections, although the fixed fee itself remains constant. For the contractor, the risk lies in accurately estimating the costs to ensure the fixed fee provides adequate profit. Effective oversight and robust cost accounting by the government are crucial to mitigate these risks and ensure value for taxpayer money.

What is the expected impact of this R&D contract on future defense capabilities?

This R&D contract is expected to contribute to the advancement of technologies within the physical, engineering, and life sciences that are relevant to national defense. The specific impact depends on the nature of the research being conducted, which is not detailed in the provided data. However, R&D contracts of this magnitude typically aim to develop novel solutions, improve existing systems, or explore new scientific frontiers that could enhance military operational effectiveness, improve soldier safety, or provide a technological advantage over adversaries. The outcomes could range from theoretical breakthroughs to prototypes of new equipment or processes.

How has federal spending in R&D (NAICS 541712) trended over the past five years?

Federal spending in Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology), categorized under NAICS code 541712, has generally shown an upward trend over the past five years, albeit with fluctuations. Agencies like the Department of Defense, National Science Foundation, and Department of Health and Human Services are major contributors to this spending. Factors influencing this trend include national security priorities, advancements in scientific fields, and economic conditions. While specific year-over-year percentage changes can vary, the overall investment in this sector reflects its importance for innovation and technological progress. Detailed trend analysis would require accessing historical federal procurement data and budget allocations.

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: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Offers Received: 999

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leonardo SPA (UEI: 428869465)

Address: 400 PROFESSIONAL DR STE 400, GAITHERSBURG, MD, 90

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $25,624,871

Exercised Options: $25,624,871

Current Obligation: $25,565,368

Contract Characteristics

Cost or Pricing Data: NO

Timeline