DoD's $205M R&D contract with SRC INC awarded in 2004, ending in 2012

Contract Overview

Contract Amount: $205,532,797 ($205.5M)

Contractor: SRC Inc

Awarding Agency: Department of Defense

Start Date: 2004-10-29

End Date: 2012-07-31

Contract Duration: 2,832 days

Daily Burn Rate: $72.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Place of Performance

Location: SYRACUSE, ONONDAGA County, NEW YORK, 13212, UNITED STATES OF AMERICA

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $205.5 million to SRC INC for work described as: Key points: 1. Contract value of $205M over 8 years suggests significant investment in R&D. 2. Sole-source award raises questions about competition and potential for overpricing. 3. Long contract duration may indicate a stable, ongoing need or a lack of re-evaluation. 4. Cost Plus Fixed Fee (CPFF) structure can incentivize cost overruns if not managed tightly. 5. The contract's focus on R&D in physical, engineering, and life sciences is broad. 6. Awarded by the Department of the Army, indicating a specific defense-related research need.

Value Assessment

Rating: questionable

Benchmarking the value of this $205M R&D contract is challenging without specific deliverables or comparable projects. The CPFF pricing structure, while common for R&D, carries inherent risk of cost escalation if not rigorously overseen. The long duration (2832 days) suggests a substantial, potentially evolving research effort, but also raises questions about whether the fixed fee remained appropriate throughout the period or if market rates for similar research have shifted significantly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This typically occurs when a specific contractor possesses unique capabilities or proprietary technology essential for the requirement. However, it limits the government's ability to explore alternative solutions or leverage competitive pricing, potentially leading to higher costs than if multiple bids were solicited.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the price reductions typically achieved through competitive bidding, potentially resulting in a higher overall expenditure for the government.

Public Impact

The primary beneficiaries are likely the Department of Defense and its operational units, receiving advancements in physical, engineering, and life sciences research. The contract supported research and development activities, the specific outcomes of which are not detailed but would contribute to future technological capabilities. Geographic impact is centered in New York, where SRC INC is located, potentially creating local economic benefits and employment. The contract likely supported a specialized workforce of scientists, engineers, and technicians within SRC INC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and competitive pressure.
Cost Plus Fixed Fee structure can lead to cost overruns if not managed effectively.
Long contract duration without clear performance metrics could mask inefficiencies.
Lack of competition may mean less innovation pressure on the contractor.

Positive Signals

Long-term contract suggests a sustained need and potential for deep expertise development.
Focus on R&D indicates investment in future capabilities.
Award to a single entity may allow for focused, specialized development.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. This is a critical area for defense modernization, involving innovation in materials, systems, and technologies. The market for defense R&D is characterized by high specialization, significant government investment, and often involves long development cycles. Comparable spending benchmarks would depend heavily on the specific sub-field of R&D.

Small Business Impact

As this was a sole-source award and the contractor is SRC INC (a known entity in defense contracting), it is unlikely that small business set-asides were a primary consideration. There is no indication of subcontracting plans specifically targeting small businesses within the provided data. The impact on the small business ecosystem would be minimal unless SRC INC actively engaged them as subcontractors.

Oversight & Accountability

Oversight for this contract would have been managed by the Department of the Army. The effectiveness of oversight for a sole-source, CPFF contract hinges on robust contract management, regular performance reviews, and diligent cost tracking to ensure the fixed fee remains fair and costs are controlled. Transparency is typically limited in sole-source R&D contracts compared to competed ones, and specific IG jurisdiction would depend on the nature of any investigations.

Related Government Programs

Department of Defense Research and Development Programs
Army Science and Technology Investments
Advanced Technology Development Contracts
Physical Sciences Research
Engineering Research
Life Sciences Research

Risk Flags

Sole Source Award
Cost Plus Fixed Fee Structure
Long Contract Duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $205.5 million to SRC INC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is SRC INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $205.5 million.

What is the period of performance?

Start: 2004-10-29. End: 2012-07-31.

What specific R&D projects were undertaken under this contract?

The provided data does not specify the exact research and development projects conducted under this $205 million contract awarded to SRC INC by the Department of the Army. The contract falls under NAICS code 541710 (Research and Development in the Physical, Engineering, and Life Sciences), indicating a broad scope. Without access to contract line item numbers (CLINs), technical reports, or program documentation, it is impossible to detail the specific scientific or technological advancements pursued. Such information would typically be found in agency procurement databases, program management reviews, or contractor technical disclosures.

How does the $205M contract value compare to similar R&D efforts within the DoD?

Comparing the $205 million value of this contract to similar DoD R&D efforts requires context on the specific research domain and duration. Defense R&D contracts can range from a few million dollars for targeted studies to billions for major platform development. This contract, spanning approximately 8 years (2004-2012), represents a significant, long-term investment. However, without knowing the specific technological area (e.g., materials science, AI, aerospace engineering), a direct comparison is difficult. Large-scale, multi-year R&D programs within DoD often exceed this value, while smaller, more focused projects might be considerably less. The sole-source nature also complicates direct value comparisons, as competitive bids might have resulted in different pricing.

What were the key risks associated with this sole-source, CPFF contract?

The primary risks associated with this sole-source, Cost Plus Fixed Fee (CPFF) contract include: 1) Lack of Competition: The sole-source nature meant the government couldn't leverage competitive bidding to ensure the best price or explore alternative solutions. This increases the risk of paying a premium. 2) Cost Overruns: The CPFF structure incentivizes the contractor to incur costs, as the fee is fixed regardless of the final cost. Without stringent oversight, this can lead to costs exceeding initial estimates. 3) Scope Creep: For R&D contracts, defining precise deliverables can be challenging. This can lead to 'scope creep' where the project expands beyond its original intent, increasing costs. 4) Contractor Performance: Relying on a single source means the government is heavily dependent on the contractor's technical capability and management. Any performance issues could significantly delay or jeopardize research outcomes.

What was the rationale for awarding this contract as sole-source?

The rationale for awarding this $205 million contract as sole-source is not explicitly detailed in the provided data. Typically, sole-source awards are justified under specific circumstances outlined in federal acquisition regulations, such as: 1) Unique Capability: The contractor (SRC INC) possesses unique technical expertise, technology, or intellectual property essential for the R&D requirement that no other source can provide. 2) Urgency: An extreme and compelling urgency might necessitate awarding to a known entity to meet critical needs rapidly. 3) Follow-on Work: If the R&D builds directly upon prior work performed by the same contractor, ensuring continuity. Without the specific justification documented by the Department of the Army at the time of award, the precise reason remains speculative, but it implies SRC INC was deemed the only viable option.

How did the contract's duration (2004-2012) impact its overall value and effectiveness?

The contract's duration of approximately 8 years (2832 days) suggests a long-term commitment to a specific R&D objective within the Department of the Army. This extended period could allow for in-depth research, iterative development, and the maturation of complex technologies. For the contractor, it provided stable funding and the opportunity to build deep expertise. However, such long durations also carry risks: 1) Technological Obsolescence: Research areas can evolve rapidly; technology developed early in the contract might be outdated by its end. 2) Cost Inefficiency: Without regular re-competition or performance reviews, costs might not be optimized over time. 3) Shifting Requirements: The initial R&D goals might become less relevant due to changing strategic priorities, yet the contract continues. The effectiveness is thus tied to how well the R&D goals remained aligned with DoD needs throughout the period.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 7502 ROUND POND RD, NORTH SYRACUSE, NY, 13212

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

Contract Characteristics

Cost or Pricing Data: YES

Timeline