Army awards $93.9M for missile and space systems R&D, with significant cost underruns

Contract Overview

Contract Amount: $36,619,569 ($36.6M)

Contractor: Cubrc, Inc.

Awarding Agency: Department of Defense

Start Date: 2004-04-27

End Date: 2009-09-30

Contract Duration: 1,982 days

Daily Burn Rate: $18.5K/day

Competition Type: FOLLOW ON TO COMPETED ACTION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200408!002867!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q04CR095 !A!N! !N! ! !20040427!20081231!938980042!938980042!938980042!N!CALSPAN-UB RESEARCH CENTER !4455 GENESEE ST !BUFFALO !NY!14225!11000!029!36!BUFFALO !ERIE !NEW YORK !+000000010000!N!N!000000000000!AD92!RDTE/OTHER DEFENSE-APPLIED RESEARCH !A2 !MISSILE AND SPACE SYSTEMS !000 !* !541330!E! !3! ! ! ! ! !99990909!B! ! !A! !C!N!U!2!001!N!1B!Z!N!Z! ! !N!C!N! ! ! !C!C!A!A!000!A!D!N! ! ! ! ! ! !0001! !

Place of Performance

Location: BUFFALO, ERIE County, NEW YORK, 14225

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $36.6 million to CUBRC, INC. for work described as: 200408!002867!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q04CR095 !A!N! !N! ! !20040427!20081231!938980042!938980042!938980042!N!CALSPAN-UB RESEARCH CENTER !4455 GENESEE ST !BUFFALO !NY!14225!11000!029!36!BUFFALO !ERIE… Key points: 1. Contract value significantly lower than initial estimates suggests strong price negotiation or scope reduction. 2. The contract was a follow-on to a competed action, indicating a competitive history. 3. Engineering services for missile and space systems are critical for national defense. 4. The contractor has a track record in defense R&D, suggesting relevant expertise. 5. The contract's duration and cost performance warrant further investigation into value realization. 6. Geographic concentration in New York for contract performance.

Value Assessment

Rating: good

The total award amount of $93.9M is substantially less than the initial ceiling of $184.8M, indicating significant cost savings or a reduced scope of work. This suggests effective negotiation or a more efficient execution than initially projected. Benchmarking against similar R&D contracts for missile systems is difficult without more granular data on the specific services rendered, but the substantial underrun is a positive indicator of value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract is described as a 'FOLLOW ON TO COMPETED ACTION,' implying that the original contract was competed. While the specific details of the competition for this follow-on action are not provided, the initial competition likely established a baseline for pricing and performance. The fact that it's a follow-on suggests the incumbent contractor was selected, potentially based on performance and price, but the initial competition is key to understanding the broader market dynamics.

Taxpayer Impact: A competitive initial award generally benefits taxpayers by driving down prices and encouraging innovation. The follow-on nature suggests continued value, assuming the competition was robust.

Public Impact

The U.S. Army benefits from advanced research and development in missile and space systems. Services delivered include engineering and applied research critical for defense capabilities. The primary geographic impact is in Buffalo, New York, where the contractor is located. The contract supports specialized engineering and research workforce within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics makes it difficult to fully assess the value delivered for the funds expended.
The 'COST PLUS FIXED FEE' contract type can sometimes lead to cost overruns if not managed tightly, though the underrun here is positive.
Limited information on the specific R&D outcomes achieved.

Positive Signals

Significant cost underrun compared to the contract ceiling suggests efficient execution or favorable pricing.
The contract was a follow-on to a competed action, indicating a history of competition.
The contractor, CALSPAN-UB RESEARCH CENTER, is located in Buffalo, NY, potentially supporting local high-tech employment.

Sector Analysis

This contract falls within the Research, Development, Test, and Evaluation (RDTE) sector, specifically focusing on missile and space systems. This is a highly specialized area within the broader defense industry, characterized by long development cycles and significant technological innovation. Comparable spending benchmarks are difficult to establish without knowing the precise nature of the R&D, but defense R&D spending is a substantial portion of the overall federal budget, with significant investment in advanced aerospace and missile technologies.

Small Business Impact

There is no indication that this contract included small business set-asides. The prime contractor, CALSPAN-UB RESEARCH CENTER, is a research institution. Analysis of subcontracting to small businesses would require further data, but the nature of specialized R&D may limit opportunities for broad subcontracting.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Inspector General (IG) jurisdiction would apply to investigations of fraud, waste, or abuse. Transparency is facilitated by contract databases, but detailed performance reports and specific R&D outcomes are often classified or proprietary.

Related Government Programs

Missile Defense Systems
Space Systems Development
Advanced Weapons Research
Aerospace Engineering Services
Department of Defense Research and Development

Risk Flags

Potential for scope creep or cost overruns inherent in R&D contracts.
Need for detailed performance metrics to fully assess value realization.
Follow-on nature of the contract warrants review of initial competition effectiveness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.6 million to CUBRC, INC.. 200408!002867!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q04CR095 !A!N! !N! ! !20040427!20081231!938980042!938980042!938980042!N!CALSPAN-UB RESEARCH CENTER !4455 GENESEE ST !BUFFALO !NY!14225!11000!029!36!BUFFALO !ERIE !NEW YORK !+000000010000!N!N!000000000000!AD92!RDTE/OTHER DEFENSE-APPLIED RESEARCH !A2 !MISSILE AND SPACE SYSTEMS !000 !* !541330!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is CUBRC, 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 $36.6 million.

What is the period of performance?

Start: 2004-04-27. End: 2009-09-30.

What specific missile and space systems R&D was performed under this contract?

The provided data indicates the contract was for 'RDTE/OTHER DEFENSE-APPLIED RESEARCH' and specifically categorized under 'MISSILE AND SPACE SYSTEMS'. However, the exact nature of the research and development activities is not detailed in the extract. This could range from conceptual design and feasibility studies to prototype development and testing of components for advanced missile and space platforms. Without access to the contract statement of work or performance reports, the precise technical objectives and deliverables remain unspecified. Further investigation would be needed to ascertain the specific technological advancements or system improvements targeted by this contract.

How does the actual cost compare to the initial ceiling and what does this imply?

The contract had an initial ceiling of $184,760,000, but the total award amount was $93,898,004.20. This represents a significant underrun of approximately 49.1%. Such a substantial difference could imply several things: the initial ceiling was set conservatively, the contractor achieved efficiencies leading to lower costs, the scope of work was reduced during the contract period, or the government exercised options that were not fully utilized. In most cases, a significant underrun is viewed positively from a value-for-money perspective, suggesting the government did not pay for services or materials it did not ultimately require or that costs were managed effectively.

What is the track record of CALSPAN-UB RESEARCH CENTER with the federal government, particularly the Department of Defense?

CALSPAN-UB RESEARCH CENTER (which appears to be associated with CUBRC, Inc. based on the data) has a history of performing research and development contracts for the Department of Defense. While this specific data point doesn't provide a comprehensive history, entities like CUBRC are known for their work in areas such as advanced radar, sensor systems, and high-speed flight research, often supporting military applications. Their involvement in missile and space systems R&D aligns with their established capabilities. A deeper dive into federal procurement databases would reveal the full scope and performance history of their contracts with DoD and other agencies.

What were the key performance indicators (KPIs) for this contract, and how were they met?

The provided data does not include specific Key Performance Indicators (KPIs) or details on how they were measured or met. For R&D contracts, KPIs often relate to achieving specific technical milestones, delivering prototypes, completing testing phases, or meeting performance specifications within a certain timeframe. The 'COST PLUS FIXED FEE' (CPFF) contract type suggests that the contractor is reimbursed for allowable costs plus a fixed fee, with performance targets likely outlined in the contract's statement of work. Without access to the contract details or performance reports, assessing whether KPIs were met is not possible from this data alone.

How does this contract's spending compare to similar contracts for missile and space systems R&D over the same period?

Comparing this $93.9 million award to similar contracts is challenging without a precise definition of 'similar.' However, R&D for missile and space systems is typically high-cost due to the complexity and cutting-edge nature of the technology involved. Contracts in this domain can range from tens of millions to billions of dollars, depending on the program's scope (e.g., basic research vs. system development). The fact that this contract was awarded under a full and open competition and resulted in a significant underrun suggests it may represent good value compared to potentially less competitive or more broadly scoped R&D efforts. However, a direct comparison would require analyzing contracts with identical or closely related PSS codes and research objectives.

What is the significance of the contract type (Cost Plus Fixed Fee) in relation to the observed cost underrun?

A Cost Plus Fixed Fee (CPFF) contract reimburses the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. This contract type is often used for R&D where the scope or costs are uncertain. The significant cost underrun ($93.9M awarded vs. $184.8M ceiling) in a CPFF contract is noteworthy. It suggests that the actual allowable costs incurred by the contractor were substantially less than anticipated. This could be due to efficient project management, lower-than-expected material or labor costs, or a reduction in the scope of work performed. While CPFF contracts can carry risks of cost overruns if not managed properly, this specific instance demonstrates a positive outcome where actual costs were well below the projected ceiling, indicating effective cost control or a favorable execution.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FOLLOW ON TO COMPETED ACTION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 4455 GENESEE ST, BUFFALO, NY, 26

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $36,619,569

Exercised Options: $36,619,569

Current Obligation: $36,619,569

Timeline