DoD's $28.8M R&D contract with AI SIGNAL RESEARCH INC awarded on a sole-source basis

Contract Overview

Contract Amount: $28,788,765 ($28.8M)

Contractor: AI Signal Research Inc

Awarding Agency: Department of Defense

Start Date: 2016-06-05

End Date: 2017-11-30

Contract Duration: 543 days

Daily Burn Rate: $53.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: R&D

Official Description: IGF::OT::IGF NEW CONTRACT

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35898

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $28.8 million to AI SIGNAL RESEARCH INC for work described as: IGF::OT::IGF NEW CONTRACT Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns and limited market engagement. 2. The contract's value of $28.8M for R&D services warrants scrutiny for cost-effectiveness compared to potentially competed alternatives. 3. Performance period of 543 days suggests a focused scope, but the lack of competition limits benchmarking opportunities. 4. The 'Research and Development in the Physical, Engineering, and Life Sciences' NAICS code indicates a specialized service area. 5. Awarded by the Department of the Army, this contract falls under the broader Department of Defense spending umbrella. 6. The absence of small business set-aside flags indicates no specific provisions were made to engage smaller enterprises.

Value Assessment

Rating: questionable

Benchmarking the value of this $28.8M contract is challenging due to its sole-source nature. Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value or if alternative, more cost-effective solutions were overlooked. The contract type 'COST NO FEE' suggests the government bears the cost of performance, with the contractor receiving no fee, which is unusual for R&D and may indicate specific circumstances or a unique service delivery model that needs further clarification to assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed among multiple vendors. This approach is typically reserved for situations where only one responsible source can provide the required services or supplies. The lack of competition means that the government did not benefit from the price discovery and innovation that typically arises from a competitive bidding process.

Taxpayer Impact: Taxpayers may have paid a premium for these services due to the absence of competition. Without multiple bids, there is less pressure on the contractor to offer the most competitive price, potentially leading to higher overall costs.

Public Impact

The primary beneficiaries are likely the research and development initiatives within the Department of the Army, advancing scientific and technological capabilities. Services delivered under this contract are focused on research and development in physical, engineering, and life sciences. The geographic impact is primarily within Alabama, where the contractor is located, suggesting localized economic benefits. Workforce implications may include specialized scientific and technical personnel employed by AI SIGNAL RESEARCH INC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits transparency and potential cost savings.
Lack of competition may result in higher prices than a competed contract.
Unusual 'COST NO FEE' contract type requires further investigation into its implications for contractor incentive and government risk.
Limited public information on the specific R&D objectives and expected outcomes.

Positive Signals

Contract awarded to a company specializing in AI and research, potentially bringing advanced capabilities.
Focus on R&D aligns with strategic goals for technological advancement.
Specific NAICS code indicates a focus on specialized scientific endeavors.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically NAICS code 541712. This sector is characterized by innovation and the pursuit of new knowledge and applications. The Department of Defense is a significant investor in R&D, aiming to maintain technological superiority. Comparable spending benchmarks for R&D contracts can vary widely based on the specific scientific field, project complexity, and duration, but significant government investment in this area is common.

Small Business Impact

The contract details indicate that this was not a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mentioned. This suggests that the primary focus was on securing specialized R&D capabilities from the awarded contractor, AI SIGNAL RESEARCH INC, rather than on fostering small business participation through this specific award.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the Department of the Army's contracting officers and potentially program managers responsible for the R&D initiative. Accountability measures would be tied to the delivery of research outcomes as defined in the contract. Transparency is limited due to the sole-source nature and the proprietary aspects often associated with R&D projects. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Research and Development Programs
Army Contracting Command
Research and Development in Physical Sciences
AI and Machine Learning Research Contracts

Risk Flags

Sole-source award
Lack of competition
Unusual contract type (Cost No Fee)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.8 million to AI SIGNAL RESEARCH INC. IGF::OT::IGF NEW CONTRACT

Who is the contractor on this award?

The obligated recipient is AI SIGNAL RESEARCH 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 $28.8 million.

What is the period of performance?

Start: 2016-06-05. End: 2017-11-30.

What specific R&D objectives were pursued under this contract, and what were the expected outcomes?

The contract, awarded under NAICS code 541712 (Research and Development in the Physical, Engineering, and Life Sciences), indicates a focus on scientific and technical advancement. However, the specific objectives and expected outcomes are not detailed in the provided data. Typically, R&D contracts aim to explore new technologies, solve complex problems, or develop innovative solutions. For this contract, the 'COST NO FEE' structure suggests the contractor's primary motivation might be the advancement of research itself or fulfilling a specific government mandate, rather than profit. Further documentation would be needed to ascertain the precise R&D goals, such as developing a new sensor technology, improving a simulation model, or conducting fundamental research in a specific scientific domain.

Why was this contract awarded on a sole-source basis instead of being competed?

Sole-source awards are typically justified when only one responsible source is available to meet the government's needs. This can occur due to unique capabilities, proprietary technology, or urgent requirements where competition is not feasible. For this $28.8 million contract with AI SIGNAL RESEARCH INC, the Department of the Army would have had to provide a justification for not competing the award. Common reasons include the contractor possessing unique intellectual property, specialized expertise essential for the project, or being the only entity capable of performing the work within the required timeframe. Without access to the specific justification document (e.g., a Justification and Approval document), the exact rationale remains unknown, but it implies a perceived lack of alternatives.

How does the 'COST NO FEE' contract type impact the contractor's incentives and the government's risk?

The 'COST NO FEE' (CNF) contract type is highly unusual, especially for R&D, as it means the contractor is reimbursed for allowable costs but receives no profit or fee. This structure significantly alters contractor incentives. Typically, contractors are motivated by profit to control costs and deliver efficiently. Under a CNF contract, the primary incentive for the contractor is often the opportunity to conduct the research itself, gain valuable experience, or fulfill a strategic objective, rather than financial gain. For the government, this structure shifts the risk of cost overruns entirely to the government, as it must cover all allowable costs incurred by the contractor. It also necessitates robust oversight to ensure costs are reasonable and allocable to the contract, and that the contractor remains motivated to achieve the contract's objectives despite the absence of a profit motive.

What is the historical spending pattern for AI SIGNAL RESEARCH INC with the Department of Defense?

The provided data indicates a single definitive contract awarded to AI SIGNAL RESEARCH INC by the Department of the Army for $28.8 million, spanning from June 5, 2016, to November 30, 2017. This suggests that, based on this specific data point, AI SIGNAL RESEARCH INC was engaged by the DoD for a significant R&D project during that period. To assess historical spending patterns comprehensively, one would need to examine broader federal procurement databases (like FPDS or USASpending) for all contracts awarded to this entity across all agencies and over a longer timeframe. This would reveal the frequency, value, and types of contracts AI SIGNAL RESEARCH INC has secured, indicating whether this DoD contract was an isolated event or part of a consistent engagement.

What is the significance of the NAICS code 541712 in the context of this contract?

The North American Industry Classification System (NAICS) code 541712 designates 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology).' This classification signifies that the contract's scope involves scientific inquiry and experimentation aimed at discovering or interpreting facts, principles, or theories for application in physical sciences, engineering, and life sciences, excluding the specific field of biotechnology. For this Department of Defense contract, it implies that AI SIGNAL RESEARCH INC was engaged in advanced research activities potentially related to areas like materials science, advanced manufacturing, energy systems, environmental science, or other engineering and physical science disciplines critical for defense applications.

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 › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 2001 NICHOLS DR STE 300, HUNTSVILLE, AL, 35802

Business Categories: Asian Pacific American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $41,255,336

Exercised Options: $40,896,332

Current Obligation: $28,788,765

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline