DoD awards $112.6M R&D contract for Space and Strategic Defense CDR, raising cost concerns

Contract Overview

Contract Amount: $39,162,715 ($39.2M)

Contractor: EPS Corporation

Awarding Agency: Department of Defense

Start Date: 2004-01-07

End Date: 2008-01-31

Contract Duration: 1,485 days

Daily Burn Rate: $26.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: 200407!000858!2100!W9113M!USA SPACE AND STRATEGIC DEF CDR !W9113M04C0028 !A!N! !N! ! !20040107!20040906!112617899!112617899!112617899!N!ENGINEERING AND PROFESSIONAL S!78 APPLE STREET !TINTON FALLS !NJ!07724!73020!025!34!TINTON FALLS !MONMOUTH !NEW JERSEY!+000001125000!N!N!000005410051!AC14!RDTE/AIRCRAFT-DEMO/VALID !A1A!AIRFRAMES AND SPARES !000 !* !541710!E! !1! ! ! ! ! !99990909!B! ! !N!A!D!N!U!1!001!N!2A!A!Y!Z! ! !N!B!N!N! !B!A! !A!A!00 !A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: TINTON FALLS, MONMOUTH County, NEW JERSEY, 07724

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $39.2 million to EPS CORPORATION for work described as: 200407!000858!2100!W9113M!USA SPACE AND STRATEGIC DEF CDR !W9113M04C0028 !A!N! !N! ! !20040107!20040906!112617899!112617899!112617899!N!ENGINEERING AND PROFESSIONAL S!78 APPLE STREET !TINTON FALLS !NJ!07724!73020!025!34!TINTON FALLS !MONM… Key points: 1. The contract's cost-plus-fixed-fee structure and lack of competition may lead to inflated prices. 2. Research and Development in Physical, Engineering, and Life Sciences is a critical but often complex sector for oversight. 3. The significant award value warrants scrutiny for potential inefficiencies and taxpayer impact. 4. The contract duration of nearly 5 years suggests a long-term need, but the pricing mechanism needs validation.

Value Assessment

Rating: questionable

The contract's cost-plus-fixed-fee (CPFF) structure, while common for R&D, can incentivize cost overruns. Without a competitive benchmark, it's difficult to assess if the $112.6M award is reasonable.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially allows the contractor to set higher prices than in a competitive environment.

Taxpayer Impact: The lack of competition for a substantial $112.6M award raises concerns about potential overspending of taxpayer funds.

Public Impact

Taxpayers may be overpaying due to the sole-source nature of the contract. The Department of Defense is investing heavily in space and strategic defense capabilities. The long contract duration could impact future budget allocations for this area. The specific R&D outcomes and their impact on national security are not detailed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost-plus-fixed-fee pricing
High contract value
Long contract duration

Positive Signals

Supports critical defense capabilities
Long-term investment in R&D

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. Spending in this area is crucial for technological advancement but often involves higher risk and less predictable outcomes, making oversight challenging.

Small Business Impact

There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. Further investigation would be needed to confirm their participation.

Oversight & Accountability

The sole-source nature of this large contract warrants close oversight to ensure the government is receiving fair value and that costs are managed effectively throughout the contract's lifecycle.

Related Government Programs

Research and Development in the Physical, Engineering, and Life Sciences
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Potential for cost overruns due to CPFF structure.
Lack of competitive pressure on pricing.
Limited transparency on specific R&D deliverables and success metrics.
Significant taxpayer investment without clear competitive justification.
Long contract duration may not reflect evolving technological needs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.2 million to EPS CORPORATION. 200407!000858!2100!W9113M!USA SPACE AND STRATEGIC DEF CDR !W9113M04C0028 !A!N! !N! ! !20040107!20040906!112617899!112617899!112617899!N!ENGINEERING AND PROFESSIONAL S!78 APPLE STREET !TINTON FALLS !NJ!07724!73020!025!34!TINTON FALLS !MONMOUTH !NEW JERSEY!+000001125000!N!N!000005410051!AC14!RDTE/AIRCRAFT-DEMO/VALID !A1A!AIRFRAMES AND SPARES !000 !* !541710!E! !1! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is EPS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $39.2 million.

What is the period of performance?

Start: 2004-01-07. End: 2008-01-31.

What specific R&D objectives does this contract aim to achieve, and how will their success be measured?

The contract details are limited, but it is for 'ENGINEERING AND PROFESSIONAL S' supporting 'USA SPACE AND STRATEGIC DEF CDR'. Specific R&D objectives and success metrics are not provided in this data. Further documentation would be required to understand the precise goals and how their achievement will be evaluated, which is crucial for assessing the value of the $112.6M investment.

Given the sole-source award, what steps were taken to ensure the pricing is fair and reasonable?

The data indicates the contract was 'NOT COMPETED'. Without a competitive bidding process, it is essential that the contracting agency performed robust price analysis, including cost realism and negotiation, to justify the $112.6M award. The cost-plus-fixed-fee structure also requires diligent monitoring of incurred costs to prevent overruns.

How does this $112.6M investment in space and strategic defense R&D align with current and future defense priorities?

The award supports the 'USA SPACE AND STRATEGIC DEF CDR', suggesting alignment with national security priorities in these domains. However, the specific R&D outcomes and their long-term strategic value are not detailed. Understanding how this investment contributes to evolving threats and technological advantages would provide better insight into its effectiveness.

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

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Address: 78 APPLE STREET, TINTON FALLS, NJ, 90

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline