DoD's $39.3M Laser System R&D Contract with Radiance Technologies Faces Scrutiny for Competition and Value

Contract Overview

Contract Amount: $39,327,926 ($39.3M)

Contractor: Radiance Technologies Inc

Awarding Agency: Department of Defense

Start Date: 2013-09-25

End Date: 2018-09-24

Contract Duration: 1,825 days

Daily Burn Rate: $21.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: RADIANCE TECHNOLOGIES BASE EFFORT. REASEARCH AND DEVELOPMENT EFFORTS IN SUPPORT OF "INNOVATIVE LASER SYSTEM TECHNOLOGY CONCEPTS".

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35807

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $39.3 million to RADIANCE TECHNOLOGIES INC for work described as: RADIANCE TECHNOLOGIES BASE EFFORT. REASEARCH AND DEVELOPMENT EFFORTS IN SUPPORT OF "INNOVATIVE LASER SYSTEM TECHNOLOGY CONCEPTS". Key points: 1. The contract awarded to Radiance Technologies for laser system R&D represents a significant investment in advanced technology. 2. Competition was limited after exclusion of sources, raising questions about price discovery and potential overpayment. 3. The cost-plus-fixed-fee structure may incentivize cost overruns, posing a risk to taxpayer funds. 4. This spending falls within the R&D sector, crucial for national defense but often subject to high uncertainty.

Value Assessment

Rating: questionable

The $39.3 million contract value for R&D is substantial. Without clear benchmarks for similar 'innovative laser system technology concepts,' it's difficult to definitively assess value. The cost-plus-fixed-fee structure, while common in R&D, can lead to higher costs compared to fixed-price contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating limited competition. This approach restricts the pool of potential contractors, potentially leading to higher prices and reduced innovation compared to a fully open competition.

Taxpayer Impact: The limited competition and cost-plus-fixed-fee structure raise concerns about the efficient use of taxpayer funds, as the government may not have secured the best possible price.

Public Impact

Taxpayers may be funding research with uncertain commercial or defense applications. Limited competition could stifle innovation and lead to higher costs for advanced defense technologies. The long duration (5 years) of the contract increases the risk of cost escalation and technological obsolescence.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition
Cost-plus-fixed-fee contract type
Lack of clear performance metrics for R&D success

Positive Signals

Investment in potentially cutting-edge laser technology
Support for domestic R&D capabilities

Sector Analysis

This contract falls under the Research and Development in the Physical, Engineering, and Life Sciences sector, specifically NAICS code 541712. Spending in this area is critical for defense modernization but is inherently risky due to the unpredictable nature of innovation. Benchmarks are difficult due to the unique nature of R&D projects.

Small Business Impact

The data indicates this contract was not awarded to a small business. There is no information provided on subcontracting opportunities for small businesses within this contract.

Oversight & Accountability

The contract was awarded by the Department of the Army, part of the Department of Defense. Oversight would typically involve program managers and contracting officers ensuring adherence to contract terms and monitoring progress, but specific oversight details are not provided.

Related Government Programs

Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Potential for cost overruns due to CPFF structure
Lack of robust competition may lead to inflated prices
Uncertainty of R&D outcomes and return on investment
Long contract duration increases risk exposure

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.3 million to RADIANCE TECHNOLOGIES INC. RADIANCE TECHNOLOGIES BASE EFFORT. REASEARCH AND DEVELOPMENT EFFORTS IN SUPPORT OF "INNOVATIVE LASER SYSTEM TECHNOLOGY CONCEPTS".

Who is the contractor on this award?

The obligated recipient is RADIANCE TECHNOLOGIES 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 $39.3 million.

What is the period of performance?

Start: 2013-09-25. End: 2018-09-24.

What specific technological advancements or capabilities are expected from this $39.3 million investment in laser system R&D, and how will their success be measured?

The contract aims to support 'innovative laser system technology concepts.' Specific advancements are not detailed in the provided data. Success measurement for R&D contracts is often challenging and may involve milestones like prototype development, performance testing, or feasibility studies. Clear, objective metrics are crucial for evaluating the return on this significant taxpayer investment.

Given the 'limited competition' award, what steps were taken to ensure Radiance Technologies' pricing was fair and reasonable for the research and development services provided?

When competition is limited, agencies typically rely on techniques like cost analysis, technical evaluations, and comparison to historical data or independent cost estimates to determine price reasonableness. However, the exclusion of other sources inherently reduces the government's leverage in price negotiations, potentially leading to higher costs than under a fully competitive scenario.

How does the Cost Plus Fixed Fee (CPFF) contract structure balance the need for R&D flexibility with the government's need for cost control, especially over a five-year period?

The CPFF structure allows flexibility for evolving R&D requirements by covering allowable costs plus a fixed fee representing profit. However, it places the cost risk primarily on the government. Effective oversight is critical to manage cost growth and ensure the fixed fee remains appropriate for the defined scope and risk, preventing potential overruns.

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: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Radiance Technologies, Inc.

Address: 350 WYNN DR NW, HUNTSVILLE, AL, 35805

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $39,555,573

Exercised Options: $39,555,573

Current Obligation: $39,327,926

Subaward Activity

Number of Subawards: 36

Total Subaward Amount: $36,180,384

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline