Frontier Technology Inc. awarded $267.6M R&D contract by GSA, continuing SBIR III support for DoD

Contract Overview

Contract Amount: $267,653,429 ($267.7M)

Contractor: Frontier Technology Inc

Awarding Agency: General Services Administration

Start Date: 2021-09-22

End Date: 2026-09-21

Contract Duration: 1,825 days

Daily Burn Rate: $146.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: THIS IS A SBIR III CONTRACT IN SUPPORT OF THE DOD, STEMMING FROM PREVIOUS SBIR PHASE I & II TOPICS INCLUDING AF06-016, MDA09-021, N05-039, N07-010, A06-035 AND OSD07-CR4. PSC CODE AC62 ENDED PER PSC MANUAL EFFECTIVE OCT 2020. REPLACING WITH PSC AC32.

Place of Performance

Location: BEAVERCREEK, GREENE County, OHIO, 45431

State: Ohio Government Spending

Plain-Language Summary

General Services Administration obligated $267.7 million to FRONTIER TECHNOLOGY INC for work described as: THIS IS A SBIR III CONTRACT IN SUPPORT OF THE DOD, STEMMING FROM PREVIOUS SBIR PHASE I & II TOPICS INCLUDING AF06-016, MDA09-021, N05-039, N07-010, A06-035 AND OSD07-CR4. PSC CODE AC62 ENDED PER PSC MANUAL EFFECTIVE OCT 2020. REPLACING WITH PSC AC32. Key points: 1. Contract represents a significant investment in R&D, building on prior SBIR phases. 2. Sole-source award suggests limited market alternatives or specific technological expertise required. 3. Cost-plus-fixed-fee structure may incentivize cost overruns if not closely managed. 4. Long duration of 5 years indicates a sustained need for the research services. 5. Focus on physical, engineering, and life sciences aligns with critical defense research areas. 6. Contractor has a history with SBIR programs, suggesting established capability.

Value Assessment

Rating: fair

The contract's value of $267.6 million over five years is substantial for R&D services. Benchmarking this against similar SBIR III contracts is challenging due to the specialized nature of the research and the sole-source award. The cost-plus-fixed-fee (CPFF) pricing structure, while common for R&D, carries inherent risks of cost escalation if not rigorously monitored by the agency. Without more detailed cost breakdowns or comparisons to similar sole-source R&D efforts, a definitive value-for-money assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating that the General Services Administration (GSA) identified Frontier Technology Inc. as the only responsible source capable of meeting the government's requirements. This could be due to proprietary technology, unique expertise developed through prior SBIR phases, or a lack of readily available alternatives. The absence of a competitive bidding process means that price discovery through market forces was not utilized.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers compared to competitively bid contracts, as the government does not benefit from the price reductions that competition typically drives.

Public Impact

The Department of Defense (DoD) is the primary beneficiary, receiving advanced R&D support. Services delivered include research and development in physical, engineering, and life sciences. The contract supports technological advancements crucial for national security. Workforce implications include specialized R&D roles, potentially benefiting highly skilled scientists and engineers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in CPFF contracts.
Limited transparency on pricing due to sole-source nature.
Reliance on a single contractor may reduce future competitive options.

Positive Signals

Continuity of R&D support for critical DoD needs.
Leverages contractor's established expertise from prior SBIR phases.
Potential for significant technological breakthroughs.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The SBIR (Small Business Innovation Research) program aims to stimulate technological innovation by small businesses. The total federal spending on R&D is substantial, with significant portions allocated to defense-related research. This contract's value, while large, is within the range for major R&D initiatives supporting defense objectives.

Small Business Impact

While the contract is with Frontier Technology Inc., the underlying SBIR III program is designed to foster innovation within small businesses. However, this specific definitive contract is not explicitly a small business set-aside. The success of the SBIR program often leads to larger follow-on contracts, and the extent to which Frontier Technology Inc. will subcontract to other small businesses is not detailed here, but it is a key consideration for the broader small business ecosystem.

Oversight & Accountability

Oversight is primarily the responsibility of the General Services Administration (GSA) and the contracting officers overseeing the contract. The CPFF structure necessitates close monitoring of costs and performance to ensure value. Transparency is limited due to the sole-source nature. Inspector General jurisdiction would apply if fraud, waste, or abuse were suspected.

Related Government Programs

SBIR Phase I Contracts
SBIR Phase II Contracts
DoD Research and Development Programs
General Services Administration Acquisition Programs
Cost Plus Fixed Fee Contracts

Risk Flags

Sole-source award limits competitive pricing.
Cost-plus-fixed-fee structure carries risk of cost overruns.
Lack of detailed performance metrics in provided data.
Long contract duration requires sustained oversight.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $267.7 million to FRONTIER TECHNOLOGY INC. THIS IS A SBIR III CONTRACT IN SUPPORT OF THE DOD, STEMMING FROM PREVIOUS SBIR PHASE I & II TOPICS INCLUDING AF06-016, MDA09-021, N05-039, N07-010, A06-035 AND OSD07-CR4. PSC CODE AC62 ENDED PER PSC MANUAL EFFECTIVE OCT 2020. REPLACING WITH PSC AC32.

Who is the contractor on this award?

The obligated recipient is FRONTIER TECHNOLOGY INC.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $267.7 million.

What is the period of performance?

Start: 2021-09-22. End: 2026-09-21.

What is the track record of Frontier Technology Inc. with SBIR contracts and DoD research?

Frontier Technology Inc. has a documented history with the SBIR program, as indicated by the reference to previous SBIR Phase I & II topics (AF06-016, MDA09-021, N05-039, N07-010, A06-035, OSD07-CR4). This suggests a sustained engagement and likely a proven ability to meet the technical and administrative requirements of these research grants. Their involvement in multiple SBIR topics across different defense agencies implies a breadth of experience and adaptability. While specific performance metrics from prior SBIR phases are not detailed in this data, the progression to a large, sole-source SBIR III contract indicates a positive assessment of their capabilities by the government, likely based on successful outcomes in earlier phases and their unique qualifications for this specific research area.

How does the $267.6 million contract value compare to similar sole-source R&D contracts for the DoD?

Assessing the $267.6 million value against similar sole-source R&D contracts for the DoD is complex without specific comparative data. However, large-scale R&D efforts, particularly those stemming from the SBIR program and supporting critical defense needs, often reach these figures. Sole-source awards in R&D are typically justified by unique technological capabilities, intellectual property, or prior successful development phases, which can command higher values due to limited alternatives. The five-year duration contributes significantly to the total contract value. While competitive bids often yield lower prices, the specialized nature of advanced R&D and the established relationship through SBIR phases can justify this investment for the government if the expected technological advancements are deemed critical.

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

The primary risk with a Cost Plus Fixed Fee (CPFF) contract of this magnitude ($267.6 million) is the potential for cost overruns. In a CPFF structure, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fee is fixed, the total cost is variable. If the contractor does not manage costs effectively, or if unforeseen technical challenges arise that increase expenses, the total government expenditure can exceed initial estimates. Robust oversight, detailed cost tracking, and clear performance metrics are crucial to mitigate this risk. The government must ensure that all costs claimed are reasonable, allocable, and necessary for the contract's performance to prevent excessive spending.

How effective is the SBIR program in driving innovation for the DoD, and does this contract exemplify that?

The SBIR program is widely recognized as an effective mechanism for the DoD to foster innovation by leveraging the agility and creativity of small businesses. It aims to transition promising technologies from R&D into practical applications. This contract, a sole-source SBIR III award to Frontier Technology Inc., exemplifies the program's intent by providing significant funding for continued development based on prior successful SBIR phases. The progression from Phase I and II to a large Phase III contract suggests that the technology developed has demonstrated potential value and is moving towards broader application or integration within DoD systems. The program's success is often measured by the number of technologies transitioned and their impact on defense capabilities, areas where this contract is intended to contribute.

What are the historical spending patterns for R&D contracts under GSA's Federal Acquisition Service, and how does this fit?

The Federal Acquisition Service (FAS) within GSA primarily facilitates government-wide procurement solutions, including IT and professional services. While GSA does manage R&D contracts, particularly through programs like SBIR, their spending patterns are often characterized by enabling other agencies rather than direct, large-scale R&D execution themselves. This $267.6 million contract, while administered by GSA, is in direct support of DoD requirements, reflecting GSA's role as a contracting vehicle. Historical spending for R&D through GSA might show a trend of facilitating smaller, specialized research efforts or acting as an intermediary. A contract of this size, especially sole-source and R&D-focused, is significant and likely represents a strategic investment rather than routine procurement, fitting within GSA's broader mission to provide efficient acquisition solutions.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 47QFCA21R0064

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 4141 COLONEL GLENN HWY STE 140, BEAVERCREEK, OH, 45431

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $553,508,440

Exercised Options: $467,952,788

Current Obligation: $267,653,429

Actual Outlays: $222,144,712

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline