DoD's $21.2M R&D contract with Radiance Technologies Inc. shows fair value despite limited competition

Contract Overview

Contract Amount: $21,221,937 ($21.2M)

Contractor: Radiance Technologies Inc

Awarding Agency: Department of Defense

Start Date: 2016-04-14

End Date: 2019-02-28

Contract Duration: 1,050 days

Daily Burn Rate: $20.2K/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: OTHER FUNCTION - IGF::OT::IGF. AWARD.

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35806

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $21.2 million to RADIANCE TECHNOLOGIES INC for work described as: OTHER FUNCTION - IGF::OT::IGF. AWARD. Key points: 1. Contract awarded for research and development in physical, engineering, and life sciences. 2. Radiance Technologies Inc. secured the award under full and open competition after source exclusion. 3. The contract duration spans 1050 days, indicating a medium-term project. 4. Performance is in Alabama, suggesting a focus on domestic R&D capabilities. 5. The cost-plus-fixed-fee structure allows for flexibility but requires careful oversight. 6. No small business set-aside was utilized, potentially limiting broader participation.

Value Assessment

Rating: fair

The contract's value of $21.2 million for R&D services appears reasonable given the scope and duration. Benchmarking against similar R&D contracts in the physical and engineering sciences is challenging without more specific service details. However, the cost-plus-fixed-fee structure, while common for R&D, can sometimes lead to higher costs if not managed tightly. The fixed fee component provides some cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition after exclusion of sources.' This indicates that while the competition was open, specific sources may have been excluded based on predefined criteria. The number of bidders is not specified, but the 'full and open' nature suggests a robust competitive process was intended, which typically aids in price discovery.

Taxpayer Impact: This competitive approach aims to ensure that the government receives the best possible value by considering a wide range of potential offerors, ultimately benefiting taxpayers through potentially lower prices or higher quality services.

Public Impact

The primary beneficiaries are the Department of Defense and its research initiatives. Services delivered include advanced research and development in physical, engineering, and life sciences. The geographic impact is concentrated in Alabama, supporting local technological development. Workforce implications include employment for scientists, engineers, and support staff within Radiance Technologies Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Fixed Fee contracts if not rigorously managed.
Limited transparency on the specific R&D projects undertaken without further disclosure.
Exclusion of certain sources, even within a full and open competition, warrants understanding of the rationale.

Positive Signals

Awarded through a full and open competition process, indicating a commitment to broad market engagement.
The contract supports critical R&D for the Department of Defense, aligning with national security objectives.
Radiance Technologies Inc. is a known entity in the defense sector, suggesting a degree of established capability.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences (NAICS 541712). This sector is crucial for technological advancement and national security. Spending in this area is often characterized by innovation, long development cycles, and significant investment. Comparable spending benchmarks would depend on the specific sub-discipline of R&D, but overall federal R&D spending is substantial, with defense R&D being a major component.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This means that large businesses were eligible to compete and likely participated. The absence of a small business set-aside suggests that the nature of the R&D required may have been perceived as beyond the typical scope or capacity of small businesses, or that the competition was structured to attract a broader range of capabilities. Subcontracting opportunities for small businesses may exist but are not explicitly detailed in this award.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract would typically involve rigorous monitoring of expenditures, progress reports, and adherence to the fixed fee milestones by the Department of the Army. Accountability measures would be tied to the successful completion of R&D objectives within the agreed-upon budget and timeline. Transparency is often limited in R&D contracts due to the sensitive nature of the work, but contract modifications and performance reviews are usually documented.

Related Government Programs

Department of Defense Research and Development Programs
Army Research Laboratory Contracts
Advanced Technology Development Contracts
Science and Technology Reinvention Programs

Risk Flags

Cost-Plus-Fixed-Fee contract type requires diligent oversight to manage costs.
Limited information on specific R&D deliverables and outcomes.
Rationale for 'exclusion of sources' in competition needs clarification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.2 million to RADIANCE TECHNOLOGIES INC. OTHER FUNCTION - IGF::OT::IGF. AWARD.

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 $21.2 million.

What is the period of performance?

Start: 2016-04-14. End: 2019-02-28.

What is the track record of Radiance Technologies Inc. with the Department of Defense for R&D contracts?

Radiance Technologies Inc. has a history of securing contracts with the Department of Defense, particularly in areas related to research, development, and advanced technologies. While this specific contract is for $21.2 million, their broader portfolio likely includes various other awards, some potentially larger or smaller, and spanning different R&D disciplines. Analyzing their past performance on similar cost-plus-fixed-fee contracts would reveal their ability to manage budgets, meet deadlines, and deliver on technical objectives. A review of their contract history, including any past performance evaluations or disputes, would provide a clearer picture of their reliability and expertise within the DoD ecosystem.

How does the value of this contract compare to similar R&D efforts in physical and engineering sciences?

Directly comparing the $21.2 million value of this contract to similar R&D efforts requires detailed knowledge of the specific research areas and project scopes. Federal R&D spending in physical and engineering sciences can range from millions to billions of dollars, depending on the complexity, duration, and strategic importance of the research. Contracts for basic research might be smaller, while those for advanced development of complex systems or technologies tend to be significantly larger. Without knowing the precise nature of the R&D undertaken by Radiance Technologies Inc., it's difficult to provide a precise benchmark. However, $21.2 million for a multi-year R&D effort in a specialized scientific field is within a common range for significant, but not necessarily program-defining, federal research projects.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract?

The primary risks associated with this CPFF contract revolve around cost control and contractor performance. For the government, the risk is that the contractor may not exert maximum effort to control costs, knowing that the fee is fixed regardless of the final cost, potentially leading to cost overruns if the initial estimates were too low or if inefficiencies arise. The contractor bears the risk of cost overruns if actual costs exceed the estimated cost, as their profit is capped by the fixed fee. Effective oversight is crucial to mitigate these risks, ensuring that the contractor operates efficiently and that the government receives the intended value for its investment. Scope creep is another potential risk, where the research objectives expand beyond the initial agreement, necessitating careful change management.

How effective is the 'full and open competition after exclusion of sources' method in ensuring value for taxpayers?

The 'full and open competition after exclusion of sources' method aims to balance broad competition with specific requirements. By excluding certain sources, the agency might be targeting specific technological capabilities or ensuring that only qualified entities participate, potentially leading to a more focused and effective competition. When executed properly, this method can still yield competitive pricing and high-quality outcomes. However, the effectiveness in ensuring value for taxpayers hinges on the justification for excluding sources and the rigor of the competition among the remaining eligible bidders. If the exclusions are too broad or unjustified, it could limit competition and potentially increase costs. Transparency regarding the reasons for exclusion is key to assessing its impact on taxpayer value.

What is the historical spending pattern for NAICS code 541712 by the Department of the Army?

Historical spending by the Department of the Army under NAICS code 541712 (Research and Development in the Physical, Engineering, and Life Sciences) is substantial, reflecting the Army's continuous investment in technological superiority. While specific annual figures fluctuate based on strategic priorities and budget allocations, this code consistently represents a significant portion of the Army's R&D procurement. Analyzing trends over several fiscal years would reveal whether spending in this area is increasing, decreasing, or remaining stable. Such analysis can highlight shifts in research focus, such as increased investment in areas like AI, cybersecurity, or advanced materials, and provide context for the $21.2 million award to Radiance Technologies Inc. as part of a larger R&D portfolio.

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

Solicitation ID: W9113M11R0003

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: $23,358,806

Exercised Options: $23,358,806

Current Obligation: $21,221,937

Subaward Activity

Number of Subawards: 26

Total Subaward Amount: $15,655,798

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9113M13D0006

IDV Type: IDC

Timeline