DoD's $50M R&D contract with Concurrent Technologies Corp shows concerning value and limited competition

Contract Overview

Contract Amount: $49,985,204 ($50.0M)

Contractor: Concurrent Technologies Corp

Awarding Agency: Department of Defense

Start Date: 2008-03-24

End Date: 2016-10-29

Contract Duration: 3,141 days

Daily Burn Rate: $15.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: BASIC EFFORT - EXERCISED PORTION

Place of Performance

Location: JOHNSTOWN, CAMBRIA County, PENNSYLVANIA, 15904

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $50.0 million to CONCURRENT TECHNOLOGIES CORP for work described as: BASIC EFFORT - EXERCISED PORTION Key points: 1. The contract's value proposition appears questionable given the lack of competitive bidding and the cost-plus fixed-fee structure. 2. Limited competition raises concerns about potential overpricing and reduced innovation incentives. 3. The long duration and cost-plus structure may indicate inherent risks in project scope or cost control. 4. Performance context is limited due to the R&D nature, making direct outcome comparisons difficult. 5. This contract falls within the broader Research and Development sector, specifically physical and engineering sciences. 6. The absence of small business set-asides or subcontracting plans suggests limited direct impact on the small business ecosystem.

Value Assessment

Rating: questionable

Benchmarking this contract's value is challenging due to its R&D focus and sole-source nature. The cost-plus fixed-fee (CPFF) pricing structure, while common for R&D, can lead to cost overruns if not managed tightly. Without competitive bids, it's difficult to ascertain if the government received fair market value for the services rendered. The exercised portion of $49.9M over its life suggests a significant investment, but the lack of transparency in pricing makes a definitive value assessment difficult.

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. This significantly limits the opportunity for price discovery and potentially leads to higher costs for the government. The absence of multiple bidders means the government did not benefit from the competitive pressures that typically drive down prices and encourage innovation. The rationale for a sole-source award in R&D often relates to unique capabilities or proprietary technology, but this needs careful justification.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price, as there was no market pressure to ensure cost-effectiveness. This can lead to a less efficient use of public funds.

Public Impact

The primary beneficiaries are likely the research and development teams at Concurrent Technologies Corp, contributing to advancements in physical, engineering, and life sciences. The contract supports research activities, potentially leading to new technologies or improved processes within the Department of Defense. The geographic impact is concentrated in Pennsylvania, where Concurrent Technologies Corp is located, potentially creating or sustaining high-skilled jobs in that region. Workforce implications include the employment of scientists, engineers, and support staff involved in the research and development efforts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus fixed-fee structure can incentivize cost overruns if not rigorously monitored.
Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Long contract duration (over 8 years) increases the risk of scope creep or changing technological needs.
Lack of transparency in R&D outcomes makes performance assessment challenging.
The 'PA' status (Procurement Administrative) is unclear without further context, potentially indicating specific contract conditions.

Positive Signals

Concurrent Technologies Corp is a known entity in defense contracting, suggesting some level of established capability.
The contract falls under R&D, which is crucial for maintaining technological superiority for the DoD.
The exercised portion of nearly $50M indicates a substantial and ongoing need for the contractor's services.
The contract was awarded by the Department of the Army, a major component of the DoD, suggesting strategic importance.

Sector Analysis

This contract operates within the Research and Development (R&D) sector, specifically classified under NAICS code 541712 for Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology). This sector is vital for national security, enabling technological advancements and maintaining a competitive edge. Comparable spending in this area can vary widely depending on the specific research focus, but significant government investment is typical for defense-related R&D. The market is often characterized by specialized firms with unique expertise.

Small Business Impact

This contract does not appear to have involved small business set-asides, as indicated by 'sb': false. Furthermore, there's no explicit mention of subcontracting plans. This suggests that the primary contract was awarded directly to Concurrent Technologies Corp without specific provisions to ensure small business participation. Consequently, the direct impact on the small business ecosystem is likely minimal, with opportunities for small businesses primarily arising if Concurrent Technologies Corp chooses to subcontract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Given the R&D nature and cost-plus structure, rigorous oversight of expenditures, progress reports, and adherence to research objectives would be crucial. Transparency is often limited in R&D contracts due to the proprietary nature of the work, but regular reporting and milestone reviews are standard. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Research and Development Contracts
Army Research Laboratory Contracts
Cost Plus Fixed Fee Contracts
Sole Source Research Contracts
Physical and Engineering Sciences R&D

Risk Flags

Sole-source award limits competition.
Cost-plus contract structure can incentivize higher costs.
Long contract duration increases risk.
Lack of detailed performance metrics hinders assessment.
R&D outcomes can be uncertain.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $50.0 million to CONCURRENT TECHNOLOGIES CORP. BASIC EFFORT - EXERCISED PORTION

Who is the contractor on this award?

The obligated recipient is CONCURRENT TECHNOLOGIES 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 $50.0 million.

What is the period of performance?

Start: 2008-03-24. End: 2016-10-29.

What is the specific research area or technological focus of this contract?

The provided data indicates the contract falls under NAICS code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology).' However, the specific research area or technological focus is not detailed in the provided data. This level of specificity is crucial for understanding the contract's objectives, potential outcomes, and its alignment with broader DoD research priorities. Without this information, it's difficult to assess the technical merit or strategic importance of the R&D being conducted. Further investigation into contract line item numbers (CLINs) or associated documentation would be necessary to identify the precise scientific or engineering domain.

How does the $49.9M exercised value compare to similar R&D contracts within the DoD for physical and engineering sciences?

Comparing the $49.9M exercised value requires context regarding the scope and duration of similar R&D efforts. Contracts in this domain can range significantly, from small exploratory research grants to large-scale system development programs. Given this contract's duration (over 8 years) and its sole-source nature, the $49.9M represents a substantial investment. Benchmarking would involve identifying comparable DoD contracts for R&D in physical and engineering sciences awarded over similar timeframes, ideally through competitive processes, to assess if this represents a fair market price. The absence of competition here makes direct value comparison difficult, but the amount suggests a significant, long-term research undertaking.

What were the justifications for awarding this contract on a sole-source basis?

Sole-source awards are typically granted when only one responsible source is available or capable of providing the required goods or services. For R&D contracts, this often stems from unique intellectual property, proprietary technology, specialized expertise, or a critical need for continuity with prior research. The Department of the Army would have had to document specific justifications, such as the contractor possessing unique knowledge or capabilities essential for the research, or that competition was not feasible or cost-effective. Without access to the contract file or justification documentation, the precise reasons remain unknown, but they are critical for assessing the necessity of bypassing the competitive bidding process.

What are the key performance indicators (KPIs) or milestones associated with this R&D contract?

R&D contracts, especially those with a cost-plus fixed-fee structure, typically include specific milestones and deliverables tied to research progress. These might include technical reports, prototype development, experimental results, or demonstrations of new capabilities. The effectiveness of oversight hinges on clearly defined KPIs that allow the government to track progress, assess technical achievements, and manage costs effectively. The absence of detailed performance data in the provided summary makes it difficult to evaluate the contractor's performance against these potential KPIs. Understanding these metrics is essential for judging the contract's success and value.

Has Concurrent Technologies Corp had other sole-source R&D contracts with the DoD, and what was their performance history?

Examining Concurrent Technologies Corp's broader contract history, particularly other sole-source R&D awards with the DoD, could provide valuable insights into their track record and the government's reliance on them for specific research areas. If they have a history of successful, cost-effective performance on similar sole-source contracts, it might lend some credence to this award. Conversely, a history of cost overruns, missed deadlines, or subpar technical outcomes on previous sole-source R&D efforts would heighten concerns about this particular contract. Accessing historical performance data and contract award details for the company would be necessary for a comprehensive assessment.

What is the potential for technology transition or commercialization resulting from this contract?

A key objective of many R&D contracts is the eventual transition of developed technologies into operational systems or commercial products. The potential for this depends heavily on the specific research area and the strategic goals of the Department of the Army. Information regarding technology transfer plans, intellectual property agreements, and efforts to commercialize the research outcomes would be necessary to assess this aspect. Without such details, it's difficult to gauge the long-term return on investment beyond the immediate research objectives. The success of technology transition is a critical measure of R&D effectiveness.

Industry Classification

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

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: 100 CTC DR, JOHNSTOWN, PA, 15904

Business Categories: Category Business, Corporate Entity Tax Exempt, Nonprofit Organization, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $52,678,773

Exercised Options: $52,678,773

Current Obligation: $49,985,204

Actual Outlays: $273,552

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline