DoD awards $23.6M R&D contract to PAE Applied Technologies, raising questions about competition and value
Contract Overview
Contract Amount: $23,610,927 ($23.6M)
Contractor: PAE Applied Technologies LLC
Awarding Agency: Department of Defense
Start Date: 2012-11-07
End Date: 2014-08-08
Contract Duration: 639 days
Daily Burn Rate: $37.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: BASE PERIOD - LABOR
Place of Performance
Location: PATUXENT RIVER, SAINT MARYS County, MARYLAND, 20670
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $23.6 million to PAE APPLIED TECHNOLOGIES LLC for work described as: BASE PERIOD - LABOR Key points: 1. The contract value of $23.6M for R&D services is significant. 2. PAE Applied Technologies is the sole awardee, indicating a lack of competition. 3. The 'NOT COMPETED' status raises concerns about potential overpricing and limited innovation. 4. The R&D sector, particularly in physical and engineering sciences, often involves complex and high-value contracts.
Value Assessment
Rating: questionable
The contract type is Cost Plus Fixed Fee, which can lead to higher costs if not managed closely. Without competitive bidding, it's difficult to assess if the $23.6M price is reasonable compared to market rates for similar R&D services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, meaning only one vendor was considered. This limits price discovery and potentially leads to higher costs for taxpayers as there was no incentive for PAE Applied Technologies to offer the most competitive price.
Taxpayer Impact: The lack of competition for a $23.6M contract suggests that taxpayers may not have received the best possible value, potentially leading to overspending.
Public Impact
Taxpayers may be paying more than necessary due to the absence of competitive bidding. Limited transparency in the procurement process for this significant R&D investment. Potential for reduced innovation as a sole-source award discourages market competition.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of transparency in pricing
Positive Signals
- Contract awarded to a known entity (PAE Applied Technologies)
- Contract supports R&D in critical physical and engineering sciences
Sector Analysis
This contract falls under Research and Development in the Physical, Engineering, and Life Sciences. Spending in this sector is crucial for technological advancement but requires careful oversight to ensure value for money, especially when procured through non-competitive means.
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 warrants further investigation by oversight bodies to ensure the justification for sole-source procurement was sound and that the pricing is fair and reasonable. Accountability for the procurement decision is essential.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition may lead to inflated costs.
- Cost-plus contract type can incentivize higher spending.
- Potential for reduced innovation due to sole-source award.
- Limited transparency regarding the procurement justification.
- No clear indication of small business participation.
Tags
research-and-development-in-the-physical, department-of-defense, md, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $23.6 million to PAE APPLIED TECHNOLOGIES LLC. BASE PERIOD - LABOR
Who is the contractor on this award?
The obligated recipient is PAE APPLIED TECHNOLOGIES LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $23.6 million.
What is the period of performance?
Start: 2012-11-07. End: 2014-08-08.
What was the specific justification for not competing this $23.6M R&D contract, and was it adequately documented?
The justification for not competing a contract is critical for ensuring fair and efficient use of taxpayer funds. Agencies must provide detailed documentation demonstrating why competition was not feasible, such as a unique capability possessed by only one vendor or an urgent need that precludes a competitive process. Without this documentation, it's difficult to assess the validity of the sole-source award and ensure accountability.
How was the 'fixed fee' component of this Cost Plus Fixed Fee contract determined, and does it reflect market rates for similar R&D services?
Determining the fixed fee in a Cost Plus Fixed Fee (CPFF) contract involves negotiation based on the anticipated cost of performance and the level of risk undertaken by the contractor. For this $23.6M R&D contract, the fee should ideally be benchmarked against similar R&D contracts awarded competitively to ensure it aligns with industry standards. Without competitive data, there's a risk the fee may be inflated, impacting overall cost-effectiveness.
What mechanisms are in place to ensure the effectiveness and successful outcomes of the R&D work performed under this sole-source contract?
Given the sole-source nature and CPFF structure, robust oversight is paramount to ensure the effectiveness of the R&D. This includes clear performance metrics, regular progress reviews, and stringent quality control measures. The Defense Contract Management Agency (DCMA) plays a key role in monitoring performance, but the absence of competition means the primary driver for efficiency and innovation must come from strong government program management and contractor accountability.
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: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0042112R0051
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 1320 N COURTHOUSE RD STE 700, ARLINGTON, VA, 22201
Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $24,299,246
Exercised Options: $24,299,246
Current Obligation: $23,610,927
Subaward Activity
Number of Subawards: 19
Total Subaward Amount: $1,840,101
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2012-11-07
Current End Date: 2014-08-08
Potential End Date: 2014-08-08 00:00:00
Last Modified: 2024-11-05
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