DoD's $17.8M R&D contract for missile defense systems awarded to MEVATEC CORPORATION shows potential value concerns

Contract Overview

Contract Amount: $17,840,837 ($17.8M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2002-04-24

End Date: 2011-05-01

Contract Duration: 3,294 days

Daily Burn Rate: $5.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 7

Pricing Type: TIME AND MATERIALS

Sector: R&D

Official Description: 200208!001648!2100!SG60 !USA SPACE AND STRATEGIC DEF CDR !DASG6002D0009 !A!N! !N!0004 !20020424!20050423!130106867!130106867!130106867!N!MEVATEC CORPORATION !1525 PERIMETER PARKWAY, SU!HUNTSVILLE !AL!35806!37000!089!01!HUNTSVILLE !MADISON !ALABAMA !+000002745355!N!N!000000000000!AC23!RDTE/MISSILE AND SPACE SYSTEMS-ADV TECH DEV !A2 !MISSILE AND SPACE SYSTEMS !1CAA!BALLISTIC MISSILE DEFENSE SYS !541710!E! !5!B!M! !A! !99990909!B! ! !A! !A!U!Y!2!007!K! !Z!N!Z! ! !N!B!Y!N! ! !Z! !B!A!000!A!B!N! ! ! ! ! ! !0001!

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35806

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $17.8 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: 200208!001648!2100!SG60 !USA SPACE AND STRATEGIC DEF CDR !DASG6002D0009 !A!N! !N!0004 !20020424!20050423!130106867!130106867!130106867!N!MEVATEC CORPORATION !1525 PERIMETER PARKWAY, SU!HUNTSVILLE !AL!35806!37000!089!01!HUNTSVILLE !MADIS… Key points: 1. The contract's value appears high relative to its duration and the number of bids received. 2. Competition was limited, raising questions about price discovery and potential overpayment. 3. The contract type (Time and Materials) can introduce cost escalation risks. 4. Performance context is limited, making it difficult to assess the true value delivered. 5. This contract falls within the broader 'Missile and Space Systems' sector, a critical area for national defense. 6. The contractor, MEVATEC CORPORATION, has a track record that warrants further examination for similar contracts.

Value Assessment

Rating: questionable

The total contract value of $17.8 million over approximately 9 years (from award to estimated completion) suggests a significant investment. However, with only 7 bids received and a Time and Materials contract type, there's a risk that the final cost may have exceeded what could have been achieved through more robust competition or a fixed-price structure. Benchmarking against similar R&D contracts for missile defense systems is crucial to determine if this represents a fair market price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which implies that while competition was sought, certain sources were excluded, potentially limiting the pool of bidders. With only 7 bids received, the level of competition was moderate, which may not have driven the most competitive pricing. This limited competition could mean that the government did not secure the best possible price for the research and development services.

Taxpayer Impact: The moderate number of bidders suggests that taxpayers may not have benefited from the most aggressive pricing that a wider, unrestricted competition might have yielded.

Public Impact

The primary beneficiaries are the Department of Defense and its mission to advance ballistic missile defense capabilities. The contract supports the development of advanced technologies for missile and space systems. Geographic impact is concentrated around the contractor's location in Huntsville, Alabama, a known hub for aerospace and defense. Workforce implications include employment for specialized engineers and researchers in the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials contract type increases risk of cost overruns.
Limited competition may have led to suboptimal pricing.
Lack of detailed performance metrics makes value assessment difficult.
Long contract duration without clear milestones could obscure accountability.

Positive Signals

Contract awarded to a specific entity for specialized R&D.
Contract falls under a critical defense capability area (ballistic missile defense).
Contractor is located in a region with a strong defense industry presence.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on 'Missile and Space Systems - Advanced Technology Development.' The federal government is a significant investor in defense R&D, with substantial spending allocated to developing cutting-edge technologies for national security. Comparable spending benchmarks would involve analyzing other R&D contracts within the missile defense domain, looking at contract values, durations, and competition levels to assess if MEVATEC's contract aligns with market norms.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. The primary contractor, MEVATEC CORPORATION, is responsible for fulfilling the contract requirements, and any subcontracting would be at their discretion, not mandated by a small business set-aside.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. The 'AC23' code might indicate specific oversight or reporting requirements. Transparency is assessed through the availability of contract data. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Ballistic Missile Defense System
Advanced Technology Development
Missile and Space Systems Research
Department of Defense Research Contracts

Risk Flags

Potential for cost overruns due to T&M contract type.
Limited competition may have resulted in suboptimal pricing.
Lack of detailed performance metrics hinders value assessment.
Long contract duration without clear milestones could obscure accountability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.8 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. 200208!001648!2100!SG60 !USA SPACE AND STRATEGIC DEF CDR !DASG6002D0009 !A!N! !N!0004 !20020424!20050423!130106867!130106867!130106867!N!MEVATEC CORPORATION !1525 PERIMETER PARKWAY, SU!HUNTSVILLE !AL!35806!37000!089!01!HUNTSVILLE !MADISON !ALABAMA !+000002745355!N!N!000000000000!AC23!RDTE/MISSILE AND SPACE SYSTEMS-ADV TECH DEV !A2 !MISSILE AND SPACE SYSTEMS !1CAA!BALLISTIC MISSILE DEFENSE SYS !541710!E! !5!B!M! !A! !99990909!B

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES 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 $17.8 million.

What is the period of performance?

Start: 2002-04-24. End: 2011-05-01.

What is MEVATEC CORPORATION's track record with similar Department of Defense R&D contracts?

MEVATEC CORPORATION has been awarded contracts related to missile and space systems, including advanced technology development. Analyzing their past performance on similar contracts, particularly those involving Time and Materials pricing and limited competition, would provide insight into their reliability and cost-effectiveness. A review of past contract awards, modifications, and any performance reviews or disputes associated with MEVATEC would be necessary to fully assess their track record. This includes examining whether they have consistently met technical requirements and managed costs effectively on previous R&D endeavors for the DoD.

How does the $17.8 million value compare to similar missile defense R&D contracts?

Benchmarking this $17.8 million contract against similar Department of Defense R&D contracts for ballistic missile defense systems is essential. Factors to consider include the contract's duration (approximately 9 years), the specific technological advancements sought, and the number of bidders. If comparable contracts for similar scope and duration were awarded at significantly lower values or through more competitive processes, it would suggest that this contract may not represent optimal value for money. Conversely, if the complexity and novelty of the R&D justify the cost and limited competition, the value proposition might be stronger.

What are the primary risks associated with the Time and Materials (T&M) contract type for this R&D effort?

The primary risk with a Time and Materials (T&M) contract type for this R&D effort is the potential for cost escalation. Unlike fixed-price contracts, T&M contracts reimburse the contractor for direct labor hours at specified hourly rates, plus actual costs for materials. This structure provides less incentive for the contractor to control costs efficiently. For a long-duration R&D project like this, the costs can accumulate significantly over time, potentially exceeding initial estimates if not closely monitored and managed. This necessitates robust oversight to ensure that labor hours and material costs are reasonable and directly related to the contract's objectives.

How effective has the 'Full and Open Competition After Exclusion of Sources' been in ensuring competitive pricing for this contract?

The effectiveness of 'Full and Open Competition After Exclusion of Sources' in ensuring competitive pricing for this contract is questionable given the moderate number of bidders (7). While it aimed for open competition, the exclusion of certain sources inherently limits the bidder pool. A larger number of bidders typically drives more aggressive pricing and innovation. With only seven bids, it's possible that the government did not receive the full benefit of market competition, potentially leading to higher costs than if a broader range of qualified contractors had participated. Further analysis would require knowing which sources were excluded and why.

What are the historical spending patterns for missile defense R&D within the Department of Defense?

Historical spending patterns for missile defense R&D within the Department of Defense show a consistent and significant investment driven by evolving threats and technological advancements. The DoD allocates substantial budgets annually to research, develop, test, and evaluate systems aimed at countering ballistic missiles. This spending is often characterized by long-term programs, complex technological challenges, and a mix of contract types, including R&D-focused agreements. Analyzing trends in spending levels, major program investments, and the prevalence of different contract vehicles over the past decade would provide context for the $17.8 million awarded to MEVATEC.

What is the significance of the PSC code 'AC23' for this contract?

The Product Service Code (PSC) 'AC23' typically relates to 'Defense-Related Research and Development.' For this specific contract, it signifies that the core purpose of the award is research and development activities directly supporting national defense objectives, likely within the realm of missile and space systems as indicated by the NAICS code. Understanding the specific subcategories within AC23 could offer more granular detail on the type of R&D being funded. This code is crucial for categorizing spending and tracking investments in defense technology development across the government.

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: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 7

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 308 VOYAGER WAY, HUNTSVILLE, AL, 05

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

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DASG6002D0009

IDV Type: IDC

Timeline