DoD awards $75.3M contract for Pacific Air Forces sustainment and support, raising value-for-money questions

Contract Overview

Contract Amount: $75,347,970 ($75.3M)

Contractor: Georgia Tech Applied Research Corp

Awarding Agency: Department of Defense

Start Date: 2019-07-29

End Date: 2024-09-30

Contract Duration: 1,890 days

Daily Burn Rate: $39.9K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: TASK ORDER W31P4Q19F0333 IS ISSUED IN ACCORDANCE WITH SECTION H-14, ORDERING PROCEDURES OF THE BASIC CONTRACT FOR THE PWS ENTITLED, "PACIFIC AIR FORCE (PACAF) AREA OF RESPONSIBILITY (AOR)/DEPLOYED RANGE SYSTEMS SUSTAINMENT AND SUPPORT (PADRSS)"

Place of Performance

Location: ATLANTA, FULTON County, GEORGIA, 30318

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $75.3 million to GEORGIA TECH APPLIED RESEARCH CORP for work described as: TASK ORDER W31P4Q19F0333 IS ISSUED IN ACCORDANCE WITH SECTION H-14, ORDERING PROCEDURES OF THE BASIC CONTRACT FOR THE PWS ENTITLED, "PACIFIC AIR FORCE (PACAF) AREA OF RESPONSIBILITY (AOR)/DEPLOYED RANGE SYSTEMS SUSTAINMENT AND SUPPORT (PADRSS)" Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can lead to higher costs than fixed-price contracts. 2. The contract was not competed, raising concerns about potential overpayment and lack of market-driven pricing. 3. A significant duration of 1890 days suggests a long-term need for these services. 4. The specific services involve sustainment and support for Pacific Air Forces' deployed range systems. 5. The contractor, Georgia Tech Applied Research Corp, has a track record in research and development. 6. The contract's value is substantial, warranting close scrutiny of cost efficiency.

Value Assessment

Rating: questionable

The contract's cost-plus-fixed-fee structure, combined with a lack of competition, makes a direct value-for-money assessment difficult. Without competitive bids, it's challenging to benchmark pricing against market rates or similar contracts. The total award amount of $75.3 million over approximately five years suggests a significant investment. Further analysis would be needed to determine if the fixed fee adequately incentivizes cost control and if the overall costs are reasonable for the services provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach limits the government's ability to leverage market competition to secure the best possible pricing and terms. While sole-source awards can be justified in specific circumstances, they often result in higher costs for taxpayers compared to competed contracts.

Taxpayer Impact: The lack of competition means taxpayers may not be receiving the most cost-effective solution, as there was no pressure from competing bids to drive down prices.

Public Impact

The primary beneficiaries are the United States Pacific Air Forces (PACAF), which will receive sustainment and support for their deployed range systems. This contract ensures the operational readiness and effectiveness of critical air force infrastructure in the Indo-Pacific region. The services provided are essential for maintaining advanced training and testing capabilities for air operations. The contract supports specialized technical and logistical services, potentially impacting a highly skilled workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs.
Cost-plus-fixed-fee contracts can incentivize higher spending.
Oversight is crucial to ensure performance and cost control in a sole-source environment.

Positive Signals

Contract supports critical national defense infrastructure.
Georgia Tech Applied Research Corp is a reputable research institution.
Long-term contract provides stability for essential services.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on engineering and physical sciences. The market for defense sustainment and support services is highly specialized, often involving unique technical expertise and security clearances. While specific market size data for 'PACAF Area of Responsibility/Deployed Range Systems Sustainment and Support' is not readily available, the Department of Defense represents a significant portion of federal R&D and services spending. Comparable contracts in this space often involve long-term sustainment agreements for complex military systems.

Small Business Impact

The data indicates this contract was not competed and does not specify any small business set-aside provisions or subcontracting goals. Therefore, the direct impact on small businesses is unclear. Without a competitive bidding process that includes small business participation requirements, opportunities for small businesses to engage in this specific contract may be limited.

Oversight & Accountability

The contract is managed by the Department of the Army, which is responsible for oversight. As a sole-source award, rigorous oversight is particularly important to ensure that costs are reasonable and that the contractor is delivering the required services effectively. Transparency regarding the justification for the sole-source award and ongoing performance monitoring will be key accountability measures.

Related Government Programs

Pacific Air Forces Operations and Maintenance
Defense Range Systems Support
Aerospace Engineering Services
Military Infrastructure Sustainment

Risk Flags

Sole-source award
Cost-plus-fixed-fee pricing
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $75.3 million to GEORGIA TECH APPLIED RESEARCH CORP. TASK ORDER W31P4Q19F0333 IS ISSUED IN ACCORDANCE WITH SECTION H-14, ORDERING PROCEDURES OF THE BASIC CONTRACT FOR THE PWS ENTITLED, "PACIFIC AIR FORCE (PACAF) AREA OF RESPONSIBILITY (AOR)/DEPLOYED RANGE SYSTEMS SUSTAINMENT AND SUPPORT (PADRSS)"

Who is the contractor on this award?

The obligated recipient is GEORGIA TECH APPLIED RESEARCH CORP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $75.3 million.

What is the period of performance?

Start: 2019-07-29. End: 2024-09-30.

What is the track record of Georgia Tech Applied Research Corp in performing similar defense sustainment contracts?

Georgia Tech Applied Research Corp (GTARC) is a well-established research institution with a history of performing complex research, development, and engineering services for various government agencies, including the Department of Defense. While GTARC is known for its R&D capabilities, specific details on its past performance in large-scale, long-term sustainment and support contracts for deployed range systems, particularly within the PACAF AOR, would require a deeper dive into its contract history and performance evaluations. Information on past performance is often found in government databases like the Federal Procurement Data System (FPDS) or through agency-specific performance management systems. Without direct access to these detailed records, it's difficult to definitively assess their track record for this specific type of service, though their general reputation in R&D is strong.

How does the cost-plus-fixed-fee (CPFF) pricing structure compare to other contract types for similar services?

Cost-plus-fixed-fee (CPFF) contracts are typically used when the scope of work is not well-defined, or when there is significant uncertainty in the costs involved, such as in research and development or complex system integration. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This structure can be less cost-effective for the government compared to fixed-price contracts, where the contractor assumes more risk and is incentivized to control costs to maximize profit. For sustainment and support services where the scope is more predictable, fixed-price or cost-plus-incentive-fee (CPIF) contracts might offer better value by aligning contractor incentives more closely with government cost-saving objectives. The CPFF structure here, especially without competition, warrants careful monitoring of cost overruns and justification of expenses.

What are the primary risks associated with a sole-source award for critical defense infrastructure support?

The primary risks associated with a sole-source award for critical defense infrastructure support include a lack of price competition, which can lead to higher costs for the government and taxpayers. Without competing bids, there's less incentive for the contractor to offer the most competitive pricing or to innovate in service delivery to reduce costs. Another risk is potential complacency or reduced performance pressure on the contractor, as they do not face the threat of losing future business to competitors. Furthermore, a sole-source award might limit the government's access to a broader range of technological solutions or specialized expertise that could be available from other qualified vendors. Robust oversight and performance management are crucial to mitigate these risks.

What is the historical spending trend for PACAF deployed range systems sustainment and support?

Historical spending data specifically for 'PACAF Area of Responsibility/Deployed Range Systems Sustainment and Support' is not directly available in the provided summary. However, the award of this $75.3 million task order suggests a significant and ongoing requirement for these services. To understand historical trends, one would need to analyze past contracts awarded for similar services to PACAF or other Department of Defense components responsible for range systems. Analyzing trends in contract duration, value, and the number of bidders on previous contracts would provide context for this current award. Without this historical data, it's difficult to determine if this award represents an increase, decrease, or stable level of spending for these critical support functions.

How does the duration of this contract (approx. 5 years) impact its overall value and risk profile?

The contract duration of approximately 1890 days (about 5 years) provides long-term stability for the sustainment and support of critical PACAF deployed range systems. This extended period can be beneficial for ensuring continuity of operations and allowing the contractor to invest in specialized equipment and personnel. However, a longer duration also increases the overall financial commitment and the potential impact of cost overruns or performance issues. For the government, it means a sustained expenditure, and for the contractor, it offers a predictable revenue stream. The risk profile is heightened because any inefficiencies or cost escalations will be magnified over this extended period. Effective contract management and oversight are therefore critical throughout its lifecycle.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › General Science and Technology R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 505 10TH ST, ATLANTA, GA, 30318

Business Categories: Category Business, Corporate Entity Tax Exempt, Educational Institution, Higher Education, Nonprofit Organization, Not Designated a Small Business, Higher Education (Public)

Financial Breakdown

Contract Ceiling: $98,532,741

Exercised Options: $75,347,970

Current Obligation: $75,347,970

Actual Outlays: $24,622,207

Subaward Activity

Number of Subawards: 13

Total Subaward Amount: $36,260,033

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W31P4Q18D0002

IDV Type: IDC

Timeline