DoD's $12.8M R&D contract with UT Austin shows limited competition and potential value concerns

Contract Overview

Contract Amount: $12,808,946 ($12.8M)

Contractor: University of Texas AT Austin

Awarding Agency: Department of Defense

Start Date: 2008-09-30

End Date: 2012-06-30

Contract Duration: 1,369 days

Daily Burn Rate: $9.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: RESEARCH & DEV.

Place of Performance

Location: AUSTIN, TRAVIS County, TEXAS, 78758

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $12.8 million to UNIVERSITY OF TEXAS AT AUSTIN for work described as: RESEARCH & DEV. Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can incentivize higher spending. 2. The contract was not competed, raising questions about price discovery and potential overpayment. 3. A duration of 1369 days suggests a long-term commitment with potential for cost escalation. 4. The contract's value is significant within the R&D sector for this specific NAICS code. 5. Performance occurred in Texas, potentially benefiting the local economy and research ecosystem.

Value Assessment

Rating: questionable

Benchmarking the value of this specific R&D contract is challenging due to its unique nature and lack of competitive bidding. The cost-plus-fixed-fee structure, while common for research, can lead to costs exceeding initial estimates if not closely managed. Without comparable contracts or a competitive process, it's difficult to definitively assess if the $12.8 million spent represents optimal value for the research outcomes achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This approach is typically used when only one source is capable of meeting the requirement, or in cases of urgent need. The lack of competition means there was no opportunity for multiple vendors to bid, potentially limiting price negotiation and the discovery of the most cost-effective solution.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as the government does not benefit from the price reductions typically seen in competitive bidding environments.

Public Impact

The University of Texas at Austin, a major research institution, benefited from this funding. The contract supported research and development activities in physical, engineering, and life sciences. The geographic impact was primarily in Texas, where the university is located. This contract likely supported academic researchers, technicians, and administrative staff at the university.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have led to a higher price than a competed contract.
Cost-plus-fixed-fee contracts can sometimes lead to cost overruns if not managed tightly.
The long contract duration increases the risk of scope creep or changing research needs.

Positive Signals

Awarded to a reputable university research institution.
Supports critical research and development in scientific fields.
Contract duration allowed for in-depth research and development.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically under NAICS code 541710. This code covers R&D in physical, engineering, and life sciences. The total federal spending in this category is substantial, with numerous contracts awarded annually. This specific award represents a portion of the Department of Defense's investment in scientific advancement, aiming to foster innovation and technological superiority.

Small Business Impact

There is no indication that this contract involved small business set-asides or subcontracting opportunities. As a sole-source award to a large university, the focus was likely on the institution's research capabilities rather than engaging the small business ecosystem.

Oversight & Accountability

Oversight for this contract would have been managed by the Department of the Navy, a component of the Department of Defense. Mechanisms would include regular reporting requirements from the contractor, financial audits, and programmatic reviews to ensure research objectives were being met and funds were used appropriately. The Inspector General's office of the DoD would have jurisdiction for investigating any potential fraud, waste, or abuse.

Related Government Programs

Department of Defense Research and Development Programs
University Research Grants
Basic and Applied Scientific Research

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.8 million to UNIVERSITY OF TEXAS AT AUSTIN. RESEARCH & DEV.

Who is the contractor on this award?

The obligated recipient is UNIVERSITY OF TEXAS AT AUSTIN.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $12.8 million.

What is the period of performance?

Start: 2008-09-30. End: 2012-06-30.

What was the specific research area funded by this contract?

The contract, NAICS code 541710, broadly covers 'Research and Development in the Physical, Engineering, and Life Sciences.' While the specific project details are not provided in the summary data, this classification suggests the research could have spanned a wide array of scientific disciplines, from materials science and engineering to biological and medical research. The Department of the Navy typically funds R&D that aligns with its strategic objectives, such as advancements in naval warfare, maritime technology, or personnel health and readiness.

How does the $12.8 million cost compare to similar R&D contracts awarded by the Department of the Navy?

Comparing this $12.8 million contract to similar R&D efforts by the Department of the Navy requires access to a broader dataset of contracts within NAICS 541710. However, for a single, non-competed award over approximately 3.6 years, this amount is substantial. Many R&D contracts, especially those involving basic research or early-stage development, can range from a few hundred thousand to tens of millions of dollars. The 'cost-plus-fixed-fee' structure suggests that the final cost could have varied, but the initial award value provides a significant benchmark. Without more specific project scope, direct comparisons are difficult, but it represents a considerable investment in a single research endeavor.

What are the potential risks associated with a sole-source, cost-plus-fixed-fee R&D contract?

Sole-source contracts eliminate the competitive pressure that typically drives down prices, potentially leading to higher costs for the government. The 'cost-plus-fixed-fee' (CPFF) structure, while providing flexibility for R&D where exact costs are uncertain, carries the risk of cost overruns. The contractor is reimbursed for allowable costs plus a predetermined fixed fee, which can incentivize spending to ensure all costs are covered. Without robust oversight and clear performance metrics, there's a risk that the project may not achieve its objectives efficiently or that costs could escalate beyond initial expectations. The long duration also increases the risk of scope creep or the research becoming outdated.

What was the contractor's track record prior to this award?

The provided data indicates the contractor is the 'UNIVERSITY OF TEXAS AT AUSTIN.' As a major public research university, its track record in securing and executing federal research grants and contracts is extensive and generally strong. Universities of this caliber are accustomed to navigating federal acquisition regulations and managing complex research projects. While specific performance metrics for this particular contract are not detailed, the institution's overall reputation and history of research output suggest a capable entity for undertaking significant R&D initiatives.

How effective was this contract in achieving its research objectives?

The provided data does not include information on the effectiveness or outcomes of the research conducted under this contract. Assessing effectiveness would require reviewing final research reports, publications, patents, or any tangible technological advancements resulting from the $12.8 million investment. Typically, such evaluations are part of the contract close-out process and may be available through agency program offices or research repositories, but are not present in the summary data.

What were historical spending patterns for similar R&D activities by the Department of the Navy?

Historical spending patterns for similar R&D activities by the Department of the Navy are generally characterized by significant, multi-year investments across various scientific and technological domains. The Navy consistently funds research in areas critical to its mission, such as naval platforms, undersea warfare, aerospace, cybersecurity, and materials science. Spending often involves a mix of large, sole-source contracts with universities and research institutions for fundamental research, alongside competed contracts for applied research and development of specific technologies. The total annual R&D budget for the Navy runs into billions of dollars, reflecting a sustained commitment to innovation.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: University of Texas System (UEI: 042000273)

Address: 10000 BURNET ROAD, AUSTIN, TX, 90

Business Categories: Category Business, Educational Institution, Government, Higher Education, Not Designated a Small Business, U.S. Regional/State Government

Financial Breakdown

Contract Ceiling: $12,826,946

Exercised Options: $12,826,946

Current Obligation: $12,808,946

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002407D6200

IDV Type: IDC

Timeline