DoD awards $38.6M for scientific research support, with limited competition and a firm fixed price contract

Contract Overview

Contract Amount: $38,649,917 ($38.6M)

Contractor: Chenega Professional & Technical Services LLC

Awarding Agency: Department of Defense

Start Date: 2022-05-20

End Date: 2025-09-30

Contract Duration: 1,229 days

Daily Burn Rate: $31.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: R&D

Official Description: SCIENTIFIC & TECHNICAL RESEARCH SUPPORT SERVICES

Place of Performance

Location: FREDERICK, FREDERICK County, MARYLAND, 21702

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $38.6 million to CHENEGA PROFESSIONAL & TECHNICAL SERVICES LLC for work described as: SCIENTIFIC & TECHNICAL RESEARCH SUPPORT SERVICES Key points: 1. Contract awarded to Chenega Professional & Technical Services LLC for R&D support. 2. The contract has a firm fixed price structure, indicating predictable costs. 3. Limited competition suggests potential for higher pricing, requiring careful benchmarking. 4. The contract duration extends over three years, indicating a significant commitment. 5. The scientific and technical research sector is crucial for national security and innovation. 6. Performance will be monitored by the Defense Health Agency.

Value Assessment

Rating: fair

The contract's firm fixed price structure provides cost certainty. However, without more detailed cost breakdowns or comparisons to similar R&D support contracts, it is difficult to definitively assess value for money. The award amount of $38.6 million over approximately three years suggests a substantial investment. Benchmarking against industry standards for similar scientific and technical research support services would be necessary for a more robust evaluation of pricing and value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was not competed openly, falling under a 'NOT AVAILABLE FOR COMPETITION' category. This limited competition raises concerns about whether the government secured the best possible pricing and service offerings. While specific reasons for the limited competition are not detailed, it often implies a sole-source justification or a specific set of circumstances that precluded a broader solicitation. The lack of multiple bidders means less price discovery and potentially less incentive for the contractor to offer highly competitive rates.

Taxpayer Impact: Taxpayers may have paid a premium due to the restricted competition. Without a competitive bidding process, there is a reduced likelihood of achieving the lowest possible price for these essential research support services.

Public Impact

The Department of Defense, specifically the Defense Health Agency, benefits from specialized scientific and technical research support. Services delivered likely contribute to advancements in biotechnology research, potentially impacting military health and readiness. The contract is geographically focused on Maryland, where the contractor is based. The contract supports specialized scientific and technical roles, contributing to the workforce in the R&D sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may lead to suboptimal pricing.
Lack of transparency in the procurement process.
Potential for cost overruns if not closely managed despite fixed price.

Positive Signals

Firm fixed price contract provides cost predictability.
Contract awarded to an established entity (Chenega Professional & Technical Services LLC).
Long-term commitment allows for sustained research efforts.

Sector Analysis

This contract falls within the Scientific and Technical Research Support Services sector, a critical area for government innovation and national security. The specific NAICS code (541714) points to Research and Development in Biotechnology (except Nanobiotechnology). This sector is characterized by high specialization, significant investment, and often involves complex, long-term projects. Comparable spending benchmarks in this area are highly project-dependent but generally reflect the specialized expertise and resources required.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a set-aside provision. The primary contractor, Chenega Professional & Technical Services LLC, will be responsible for fulfilling the contract requirements. Any subcontracting would be at their discretion, and its impact on the small business ecosystem is not directly ascertainable from this data.

Oversight & Accountability

Oversight for this contract will be managed by the Defense Health Agency. As a definitive contract with a firm fixed price, the primary accountability measure is adherence to the agreed-upon scope and price. Transparency is limited by the non-competitive nature of the award. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse, but specific oversight mechanisms beyond standard contract management are not detailed.

Related Government Programs

Biotechnology Research and Development
Defense Health Research
Scientific Support Services
Federal R&D Contracts

Risk Flags

Limited Competition
Potential for Overpricing
Lack of Transparency in Procurement

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.6 million to CHENEGA PROFESSIONAL & TECHNICAL SERVICES LLC. SCIENTIFIC & TECHNICAL RESEARCH SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is CHENEGA PROFESSIONAL & TECHNICAL SERVICES LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Health Agency).

What is the total obligated amount?

The obligated amount is $38.6 million.

What is the period of performance?

Start: 2022-05-20. End: 2025-09-30.

What is the track record of Chenega Professional & Technical Services LLC with the Department of Defense, particularly in R&D support?

Chenega Professional & Technical Services LLC has a history of contracting with the Department of Defense. While specific details on their R&D support track record require deeper analysis of past performance data, their ability to secure this $38.6 million contract suggests a level of established capability and past success. Further investigation into their performance on previous DoD contracts, including client satisfaction, adherence to timelines, and quality of deliverables, would provide a more comprehensive understanding of their reliability and expertise in this domain. Examining contract close-out data and any performance reviews would be crucial.

How does the firm fixed price of this contract compare to market rates for similar biotechnology R&D support services?

Benchmarking the firm fixed price of this $38.6 million contract against market rates for similar biotechnology R&D support services is challenging without access to detailed cost breakdowns and a comprehensive market analysis. Firm fixed price contracts aim to provide cost certainty, but their competitiveness hinges on the initial negotiation and the level of competition. Given this contract was awarded under limited competition, it is plausible that the price may not reflect the most competitive market rate achievable through open bidding. A detailed analysis would involve comparing the proposed labor rates, overhead, and direct costs against industry benchmarks for specialized R&D support in the biotechnology field, considering factors like personnel qualifications, facility requirements, and project complexity.

What are the primary risks associated with a 'NOT AVAILABLE FOR COMPETITION' award for R&D services?

The primary risks associated with a 'NOT AVAILABLE FOR COMPETITION' award for R&D services include potential overpayment due to lack of price competition, reduced incentive for the contractor to innovate or optimize costs, and a lack of transparency in the procurement process. Taxpayers may not be receiving the best value for their investment. Furthermore, it can limit opportunities for other capable contractors to demonstrate their expertise. Ensuring robust oversight, clear performance metrics, and thorough justification for the non-competitive award are critical to mitigating these risks and ensuring the government's interests are protected.

How effective is the Defense Health Agency in managing R&D contracts to ensure program effectiveness and taxpayer value?

The effectiveness of the Defense Health Agency (DHA) in managing R&D contracts is a critical factor in ensuring program success and maximizing taxpayer value. The DHA's mission involves advancing military medicine, which relies heavily on successful R&D outcomes. Effective management typically involves rigorous contract oversight, clear performance metrics, regular progress reviews, and proactive risk management. While this specific contract's effectiveness cannot be judged without performance data, the DHA's overall track record in managing complex scientific endeavors would be a key indicator. Analyzing past DHA R&D contract performance, including successful research outcomes and budget adherence, would provide insight into their management capabilities.

What has been the historical spending trend for scientific and technical research support services by the Department of Defense?

Historical spending trends for scientific and technical research support services by the Department of Defense (DoD) generally show a consistent and significant investment. The DoD relies heavily on external expertise and services to drive innovation and maintain technological superiority. Spending in this category often fluctuates based on strategic priorities, emerging threats, and technological advancements. Analyzing historical data reveals a substantial allocation of resources towards R&D, including support services, reflecting its critical role in national security. This particular $38.6 million award is one component of a larger, ongoing investment in research and development across various defense sectors.

What are the implications of the firm fixed price (FFP) contract type for managing R&D projects with inherent uncertainties?

A firm fixed price (FFP) contract type for R&D projects, like this one, offers cost certainty to the government but can introduce risks for both parties due to the inherent uncertainties in research. For the government, it caps the financial exposure. However, if the contractor underestimates the effort or encounters unforeseen technical challenges, they may incur losses, potentially impacting their motivation or ability to deliver. Conversely, if the contractor accurately estimates or finds efficiencies, they can achieve higher profit margins. Effective management under FFP requires a well-defined scope of work and robust oversight to ensure the contractor is delivering the agreed-upon value without compromising quality or innovation due to cost pressures.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in Biotechnology (except Nanobiotechnology)

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W81XWH22R0034

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 609 INDEPENDENCE PKWY STE 210, CHESAPEAKE, VA, 23320

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $45,738,529

Exercised Options: $41,375,508

Current Obligation: $38,649,917

Actual Outlays: $5,293,911

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline