GSA awards $5.4M for AI system development, raising questions about competition and value

Contract Overview

Contract Amount: $5,441,227 ($5.4M)

Contractor: LA Jolla Logic LLC

Awarding Agency: General Services Administration

Start Date: 2022-08-12

End Date: 2026-08-11

Contract Duration: 1,460 days

Daily Burn Rate: $3.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: TIME AND MATERIALS

Sector: R&D

Official Description: COGNITIVE AUTONOMOUS ARTIFICIAL SYSTEM INTELLIGENCE CAASI DEVELOPMENT AND INTEGRATION

Place of Performance

Location: WASHINGTON NAVY YARD, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20376

State: District of Columbia Government Spending

Plain-Language Summary

General Services Administration obligated $5.4 million to LA JOLLA LOGIC LLC for work described as: COGNITIVE AUTONOMOUS ARTIFICIAL SYSTEM INTELLIGENCE CAASI DEVELOPMENT AND INTEGRATION Key points: 1. Contract awarded on a non-competitive basis, limiting price discovery. 2. Research and Development focus in AI, a rapidly evolving sector. 3. Potential for cost overruns given Time and Materials contract type. 4. Limited public information on performance metrics or comparable benchmarks. 5. Geographic concentration in Washington D.C. for contract performance. 6. Contract duration extends over three years, indicating a significant project.

Value Assessment

Rating: questionable

The contract's Time and Materials (T&M) pricing structure, combined with its non-competitive award, raises concerns about value for money. Without competitive bidding, it is difficult to benchmark the pricing against market rates or similar R&D efforts. The lack of a ceiling price in a T&M contract can also lead to cost uncertainty and potential overruns, especially in a complex field like AI development. Further analysis would be needed to assess if the labor rates and estimated hours align with industry standards for this type of specialized research.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'NOT AVAILABLE FOR COMPETITION' basis, indicating that a full and open competition was not conducted. This typically occurs when only one source is capable of meeting the agency's needs, or in specific circumstances like urgent requirements or follow-on work. The lack of competition means that potential alternative providers were not considered, and the government did not benefit from a range of proposals and pricing strategies that a competitive process would typically yield.

Taxpayer Impact: The absence of competition means taxpayers may not have received the most cost-effective solution. Without multiple bids, the government lacks assurance that the negotiated price reflects the best possible value, potentially leading to higher overall expenditure.

Public Impact

The primary beneficiaries are likely the research and development teams at LA JOLLA LOGIC LLC, contributing to advancements in artificial intelligence. The contract aims to deliver development and integration services for a Cognitive Autonomous Artificial System Intelligence (CAASI). Contract performance is geographically concentrated in the District of Columbia. The project could foster specialized skills within the AI research and development workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award limits price discovery and potentially increases costs for taxpayers.
Time and Materials contract type offers less cost certainty compared to fixed-price awards.
Lack of detailed performance metrics makes it difficult to assess project success and contractor efficiency.
The specific capabilities of the CAASI system and its intended operational impact are not clearly defined in the provided data.

Positive Signals

Focus on cutting-edge AI research and development aligns with national technological priorities.
The contract duration suggests a commitment to a significant and potentially impactful project.
Awarded by the General Services Administration, a key agency for federal procurement.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on artificial intelligence. The R&D market for AI is characterized by rapid innovation, high demand for specialized talent, and significant investment from both government and private sectors. Comparable spending benchmarks are difficult to establish due to the bespoke nature of AI development contracts and the proprietary nature of much of the underlying research. However, government investment in AI R&D is a growing area, driven by its potential applications across defense, intelligence, and civilian agencies.

Small Business Impact

The provided data indicates that this contract was not awarded to a small business (ss: false) and does not appear to have specific small business set-aside provisions (sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from this particular award. The focus is on a large-scale R&D effort likely requiring specialized expertise that may not be readily available from smaller firms in this specific domain.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA), specifically its Federal Acquisition Service. As a Time and Materials contract, GSA's contracting officers would be responsible for monitoring labor hours, rates, and material costs to ensure compliance with the contract terms and prevent cost overruns. Transparency may be limited due to the non-competitive nature and the proprietary aspects of AI research. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Artificial Intelligence Research Programs
Cognitive Systems Development
Autonomous Systems Research
Advanced Technology Development Contracts
Federal R&D Spending

Risk Flags

Non-competitive award
Time and Materials contract type
Lack of defined performance metrics
Limited public information on system capabilities

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $5.4 million to LA JOLLA LOGIC LLC. COGNITIVE AUTONOMOUS ARTIFICIAL SYSTEM INTELLIGENCE CAASI DEVELOPMENT AND INTEGRATION

Who is the contractor on this award?

The obligated recipient is LA JOLLA LOGIC LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $5.4 million.

What is the period of performance?

Start: 2022-08-12. End: 2026-08-11.

What is the specific capability and intended use of the Cognitive Autonomous Artificial System Intelligence (CAASI)?

The provided data indicates the contract is for the 'Cognitive Autonomous Artificial System Intelligence CAASI Development and Integration.' While the name suggests a system capable of learning, reasoning, and acting autonomously, the specific functionalities, intended applications (e.g., data analysis, operational support, decision augmentation), and the operational environment for CAASI are not detailed in the contract information. This lack of specificity makes it challenging to fully assess the project's scope, potential impact, and the appropriateness of the awarded value. Further documentation, such as technical requirements or statements of work, would be necessary to understand the system's precise capabilities and its role within the agency's mission.

How does the $5.4 million contract value compare to similar AI development contracts awarded by the GSA or other agencies?

Benchmarking this $5.4 million contract for AI development is challenging without more specific details on the scope of work and deliverables. AI R&D contracts can vary significantly in cost based on factors like the complexity of the algorithms, the amount of data required for training, the level of autonomy, and the specific research questions being addressed. Contracts for foundational AI research might be lower, while those involving the integration of advanced AI into complex systems or the development of highly specialized autonomous capabilities could range from millions to tens or even hundreds of millions of dollars. Given this is a sole-source, Time and Materials contract, a direct comparison to competitively bid, fixed-price contracts for similar AI capabilities would be difficult and potentially misleading. A more robust comparison would require access to detailed statements of work and performance data from comparable projects.

What are the primary risks associated with a Time and Materials (T&M) contract for AI development, especially when awarded non-competitively?

The primary risks associated with a Time and Materials (T&M) contract for AI development, particularly when awarded non-competitively, revolve around cost control and oversight. T&M contracts do not have a ceiling price, meaning the government pays for the actual labor hours and material costs incurred by the contractor, plus a fixed fee or percentage for profit. This structure offers flexibility but lacks the cost certainty of fixed-price contracts. In a rapidly evolving field like AI, where research paths can be unpredictable, T&M can lead to cost overruns if not meticulously managed. The non-competitive aspect exacerbates this risk, as there is no market pressure to ensure efficient resource utilization or competitive pricing. Robust oversight, detailed tracking of hours and expenses, and clear task definitions are crucial to mitigate these risks.

What is the track record of LA JOLLA LOGIC LLC in performing federal R&D contracts, particularly in the AI domain?

Information regarding LA JOLLA LOGIC LLC's specific track record in performing federal R&D contracts, especially within the AI domain, is not readily available in the provided data snippet. To assess their past performance, one would typically need to consult federal procurement databases (like SAM.gov or FPDS) for contract history, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any reported issues or successes on previous government projects. Without this historical data, it is difficult to gauge their experience, reliability, and success rate in delivering complex R&D outcomes, which is a critical factor in evaluating the risk and potential value of this current contract.

What are the implications of awarding this AI development contract solely to LA JOLLA LOGIC LLC without competition?

The sole-source award of this AI development contract to LA JOLLA LOGIC LLC has several implications. Firstly, it means the government did not explore potential solutions or pricing from other qualified contractors, potentially missing out on innovative approaches or more cost-effective options. This lack of competition can reduce the incentive for the awarded contractor to optimize performance and control costs, as they face no direct market pressure. Secondly, it raises questions about the justification for a sole-source award; agencies must typically demonstrate that only one contractor can meet the requirement. This could indicate a highly specialized need or potentially a failure in market research or acquisition planning. For taxpayers, it means less assurance that the negotiated price represents the best value achievable in a competitive market.

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: 47QFLA22R0019

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Boecore, Inc.

Address: 444 W C ST STE 220, SAN DIEGO, CA, 92101

Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Not Tax Exempt, Economically Disadvantaged Women Owned Small Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $7,825,842

Exercised Options: $6,214,714

Current Obligation: $5,441,227

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47QFLA22D0003

IDV Type: IDC

Timeline