DoD's $22.3M R&D contract with Radiance Technologies Inc. shows fair value despite limited competition

Contract Overview

Contract Amount: $22,293,863 ($22.3M)

Contractor: Radiance Technologies Inc

Awarding Agency: Department of Defense

Start Date: 2008-09-24

End Date: 2013-12-05

Contract Duration: 1,898 days

Daily Burn Rate: $11.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIXED PRICE LEVEL OF EFFORT

Sector: R&D

Official Description: SETAC - FIXED PRICE LABOR

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35801

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $22.3 million to RADIANCE TECHNOLOGIES INC for work described as: SETAC - FIXED PRICE LABOR Key points: 1. Contract value of $22.3 million for R&D services. 2. Fixed-price contract type suggests cost control by the government. 3. Awarded by the Department of the Army, indicating defense sector focus. 4. Performance period spans over 5 years, allowing for sustained development. 5. Research and Development in Physical, Engineering, and Life Sciences (except Biotechnology) is the primary NAICS code. 6. Geographic location of performance is Alabama. 7. Contract was competed, but with exclusions, suggesting potential for better pricing if fully open.

Value Assessment

Rating: fair

The contract's total value of $22.3 million over approximately five years appears reasonable for specialized R&D services in the defense sector. Benchmarking against similar fixed-price R&D contracts within the Department of Defense is challenging without more specific service details. However, the fixed-price nature of the contract generally provides a degree of cost certainty for the government, assuming the scope of work was well-defined. The contract's duration suggests a commitment to a specific research area, which can be cost-effective if the research yields significant advancements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This indicates that while competition was sought, certain sources were excluded from the outset. The exact reasons for these exclusions are not detailed, but this approach typically results in fewer bidders than a truly full and open competition. The limited number of bidders, stemming from the exclusion of sources, may have had an impact on price discovery, potentially leading to less competitive pricing than if all qualified sources had been allowed to bid.

Taxpayer Impact: Taxpayers may have missed out on potentially lower prices that could have resulted from broader competition. The exclusion of sources limits the government's ability to ensure it is receiving the best possible value through robust market competition.

Public Impact

The Department of the Army benefits from advanced research and development capabilities. Services delivered likely contribute to national defense technological superiority. Geographic impact is concentrated in Alabama, supporting the local economy and R&D ecosystem. Workforce implications include employment for highly skilled scientists and engineers in the R&D sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition due to source exclusions could lead to higher costs.
Lack of transparency regarding source exclusions hinders full value assessment.
Potential for cost overruns if scope definition was inadequate for fixed-price contract.

Positive Signals

Fixed-price contract type provides cost certainty.
Long performance period allows for focused R&D efforts.
Award to Radiance Technologies Inc. suggests confidence in contractor's capabilities.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences (excluding biotechnology). This is a critical area for defense modernization, requiring specialized expertise and innovation. The market for defense R&D is characterized by high barriers to entry due to security clearances, intellectual property considerations, and the need for proven technical capabilities. Spending in this area is often project-specific and driven by evolving threat landscapes and technological advancements. Comparable spending benchmarks are difficult to establish without knowing the precise nature of the R&D.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or impacts on the small business ecosystem stemming from a small business set-aside. The primary contractor, Radiance Technologies Inc., is likely a mid-to-large-sized business given the contract value. Opportunities for small businesses would typically arise through subcontracting if the prime contractor chooses to engage them.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Army contracting and program management offices. Accountability measures are inherent in the fixed-price contract structure, requiring the contractor to deliver specified R&D outcomes within the agreed-upon price. Transparency is limited by the 'exclusion of sources' aspect of the competition, as the rationale for exclusions is not publicly detailed. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Research and Development Programs
Army Science and Technology Programs
Advanced Technology Development Contracts
Fixed-Price R&D Contracts

Risk Flags

Limited competition due to source exclusions.
Potential for cost overruns in fixed-price R&D.
Uncertainty in R&D outcomes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.3 million to RADIANCE TECHNOLOGIES INC. SETAC - FIXED PRICE LABOR

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 $22.3 million.

What is the period of performance?

Start: 2008-09-24. End: 2013-12-05.

What is the track record of Radiance Technologies Inc. with the Department of Defense?

Radiance Technologies Inc. has a history of securing contracts with the Department of Defense, primarily in research and development and engineering services. Their portfolio often includes work related to advanced technologies, systems engineering, and scientific research. Analyzing their past performance on similar fixed-price R&D contracts would provide insight into their ability to deliver within budget and schedule. A review of contract award histories and performance evaluations, where available, would be necessary to fully assess their track record. However, the award of this $22.3 million contract suggests a level of trust and demonstrated capability by the DoD.

How does the value of this contract compare to similar R&D efforts within the DoD?

Direct comparison of this $22.3 million contract's value to similar R&D efforts within the DoD is challenging without specific details on the scope of work and the technological domain. Defense R&D contracts can vary significantly in cost based on complexity, duration, and the criticality of the research. However, for a multi-year, fixed-price R&D effort, $22.3 million is a substantial but not extraordinary amount, reflecting the specialized nature of defense innovation. Benchmarking would require identifying contracts with similar NAICS codes (541712), contract types (Fixed Price), and agencies (DoD components) over comparable performance periods. The 'fair' value assessment suggests it is within an expected range, but not necessarily a bargain.

What are the primary risks associated with this fixed-price R&D contract?

The primary risks associated with this fixed-price R&D contract include scope creep, inadequate technical definition, and contractor underperformance. For fixed-price contracts, especially in R&D where outcomes can be uncertain, there's a risk that the initial scope definition may not fully capture the work required, potentially leading to disputes or the need for contract modifications. If the technical requirements are not precisely defined, the contractor might deliver a product or research outcome that doesn't fully meet the government's evolving needs. Furthermore, there's always a risk that the contractor may not possess the necessary expertise or resources to successfully complete the R&D, leading to delays or failure to achieve objectives. The 'limited' competition also introduces a risk that the government did not secure the most innovative solutions or the best possible price.

How effective is the 'Full and Open Competition after Exclusion of Sources' approach for defense R&D?

The 'Full and Open Competition after Exclusion of Sources' approach is a nuanced strategy that aims to balance competition with specific needs or constraints. For defense R&D, this approach might be used when certain technologies are proprietary, require specific security clearances, or when there's a need to leverage existing partnerships or specialized capabilities that only a limited number of firms possess. While it allows for some level of competition, the exclusion of sources inherently limits the pool of potential bidders. This can be effective if the excluded sources are genuinely unable to meet the stringent requirements or if there are compelling national security reasons. However, it carries the risk of reducing overall competition, potentially impacting price and innovation compared to a truly unrestricted competition.

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 except Biotechnology) is substantial, reflecting the Army's continuous investment in technological superiority. While specific aggregate figures fluctuate annually based on budget allocations and strategic priorities, this code consistently represents a significant portion of the Army's R&D procurement. Analyzing trends over the past decade would likely show consistent, high-level spending, with peaks and troughs corresponding to major modernization initiatives or emerging technological needs. This particular contract, awarded in 2008 and ending in 2013, falls within a period where the Army was actively pursuing advancements in various scientific and engineering fields to support its operational requirements.

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: W9113M07R0006

Offers Received: 1

Pricing Type: FIXED PRICE LEVEL OF EFFORT (B)

Evaluated Preference: NONE

Contractor Details

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

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

Financial Breakdown

Contract Ceiling: $22,764,759

Exercised Options: $22,764,759

Current Obligation: $22,293,863

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9113M08D0001

IDV Type: IDC

Timeline