DoD's $62.8M contract for R&D services to Radiance Technologies Inc. shows fair value with 2 bidders

Contract Overview

Contract Amount: $62,805,946 ($62.8M)

Contractor: Radiance Technologies Inc

Awarding Agency: Department of Defense

Start Date: 2018-08-29

End Date: 2021-09-03

Contract Duration: 1,101 days

Daily Burn Rate: $57.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: SYSTEM ENGINEERING AND TECHNICAL ASSISTANCE SUPPORT PROGRAM - ASSESSMENT, SIMULATION, AND TRANSITION SUPPORT SERVICES

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35807

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $62.8 million to RADIANCE TECHNOLOGIES INC for work described as: SYSTEM ENGINEERING AND TECHNICAL ASSISTANCE SUPPORT PROGRAM - ASSESSMENT, SIMULATION, AND TRANSITION SUPPORT SERVICES Key points: 1. The contract's value appears reasonable given the specialized nature of R&D support. 2. Competition was limited but sufficient to establish a benchmark for pricing. 3. Performance risks are moderate, typical for complex R&D projects. 4. The contract duration aligns with the project's scope and objectives. 5. This contract falls within the broader R&D sector for defense applications. 6. The contractor has a track record in similar technical assistance programs.

Value Assessment

Rating: good

The contract's total value of $62.8 million over approximately three years suggests a moderate annual spend. Benchmarking against similar R&D support contracts is challenging due to the specialized nature of the services. However, the cost-plus-fixed-fee structure implies that costs were scrutinized, and the fixed fee provides a degree of cost certainty for the government. The number of bids received (2) indicates some level of market interest, which can be a proxy for competitive pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while full and open competition was intended, specific sources were excluded. With two bidders, the competition level is moderate. This suggests that while multiple companies were considered, the pool of qualified offerors may have been limited, potentially impacting the downward pressure on pricing compared to a broader competition.

Taxpayer Impact: A moderate level of competition means taxpayers likely paid a fair, but not necessarily the lowest possible, price. The exclusion of certain sources warrants further scrutiny to ensure it did not unduly restrict competition and inflate costs.

Public Impact

The Department of the Army benefits from advanced research and development support. Services include assessment, simulation, and transition support for complex defense systems. The contract's geographic impact is primarily in Alabama, where the contractor is located. Workforce implications include employment for specialized engineers and scientists.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns in cost-plus-fixed-fee contracts if not closely monitored.
Limited competition could lead to less aggressive pricing.
Dependence on a single contractor for critical R&D support.

Positive Signals

Contractor's specialization in technical assistance and simulation.
Clear performance objectives outlined in the contract.
Fixed fee component provides some cost predictability.

Sector Analysis

This contract operates within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences, excluding biotechnology. This segment of the R&D market is crucial for defense innovation, enabling the development of advanced technologies. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of R&D services, but the overall federal R&D spending is in the hundreds of billions annually, with defense being a significant portion.

Small Business Impact

The contract data indicates that small business participation was not a primary focus, as the 'small business set-aside' field is false. There is no explicit mention of subcontracting goals for small businesses. This suggests that the primary contractor, Radiance Technologies Inc., is likely a large business, and the contract's direct impact on the small business ecosystem may be limited unless significant subcontracting opportunities arise.

Oversight & Accountability

Oversight is typically managed by the contracting officer and program managers within the Department of the Army. Accountability measures are embedded in the contract's performance work statement and payment terms, tied to milestones and deliverables. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply if fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Research and Development
Army Systems Engineering Support
Technical Assistance Contracts
Simulation and Modeling Services

Risk Flags

Limited competition may impact price.
Cost-plus-fixed-fee contracts require diligent oversight to manage costs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $62.8 million to RADIANCE TECHNOLOGIES INC. SYSTEM ENGINEERING AND TECHNICAL ASSISTANCE SUPPORT PROGRAM - ASSESSMENT, SIMULATION, AND TRANSITION SUPPORT SERVICES

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 $62.8 million.

What is the period of performance?

Start: 2018-08-29. End: 2021-09-03.

What is Radiance Technologies Inc.'s track record with similar Department of Defense contracts?

Radiance Technologies Inc. has a history of securing contracts with the Department of Defense, often in areas related to engineering, technical assistance, and simulation. While specific details require deeper analysis of contract databases, their presence in this sector suggests experience with government requirements. Their performance on previous contracts, including adherence to schedules, budget, and technical specifications, would be a key indicator of their capability for this current award. Reviewing past performance evaluations and any documented issues would provide a more comprehensive understanding of their reliability.

How does the pricing of this contract compare to similar R&D support services?

Directly comparing the pricing of this $62.8 million contract to similar R&D support services is challenging due to the highly specialized and often unique nature of research and development work. The cost-plus-fixed-fee (CPFF) structure means that actual costs incurred by the contractor are reimbursed, plus a predetermined fixed fee for profit. Benchmarking would ideally involve comparing the fixed fee percentage and the overall cost structure against contracts with similar technical scopes, durations, and complexity. The fact that only two bids were received suggests that the market for such specialized services might be limited, making direct price comparisons difficult without access to proprietary cost data from competitors.

What are the primary risks associated with this contract, and how are they being mitigated?

The primary risks associated with this contract likely include technical challenges inherent in R&D, potential cost overruns (despite the fixed fee component), schedule delays, and the possibility of the research not yielding the desired outcomes. Mitigation strategies typically involve robust project management, regular technical reviews, clear performance metrics, and strong oversight from the contracting officer's representative. The CPFF contract type itself implies a shared risk, where the government bears the cost risk, but the fixed fee incentivizes the contractor to manage costs efficiently to protect their profit margin. The limited competition also presents a risk of less aggressive pricing.

How effective has the Department of the Army been in managing similar R&D contracts?

The effectiveness of the Department of the Army in managing similar R&D contracts can vary significantly based on the specific program, the contracting team's expertise, and the contractor's performance. Historically, the Army has managed a vast portfolio of R&D efforts, some highly successful in driving technological advancements, while others may have faced challenges. Key indicators of effectiveness include meeting program objectives within budget and schedule, successful technology transition, and positive contractor performance reviews. Analyzing the Army's historical success rates in R&D procurement, the implementation of best practices in contract oversight, and the utilization of program management tools would provide a clearer picture of their management capabilities in this domain.

What are the historical spending patterns for system engineering and technical assistance support within the Department of Defense?

Historical spending patterns for System Engineering and Technical Assistance (SETA) support within the Department of Defense (DoD) show a consistent and substantial investment. SETA contracts are crucial for providing specialized expertise that complements organic government personnel in areas like program management, systems engineering, cybersecurity, and acquisition support. Annual spending on SETA services across the DoD typically runs into the billions of dollars, reflecting the complexity and scale of defense acquisition programs. This spending fluctuates based on defense priorities, major acquisition programs, and budget allocations, but it remains a critical component of the DoD's operational and developmental capabilities.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Radiance Technologies, Inc.

Address: 310 BOB HEATH DR NW, HUNTSVILLE, AL, 35806

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

Financial Breakdown

Contract Ceiling: $71,748,439

Exercised Options: $71,748,439

Current Obligation: $62,805,946

Actual Outlays: $489,422

Subaward Activity

Number of Subawards: 42

Total Subaward Amount: $87,829,752

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q14OADS614

IDV Type: IDC

Timeline