DoD's $10.16M R&D Contract with Patrick Power Products Faces Scrutiny Over Long Duration and Fixed Fee Structure
Contract Overview
Contract Amount: $10,155,419 ($10.2M)
Contractor: Patrick Power Products, Inc.
Awarding Agency: Department of Defense
Start Date: 2003-09-18
End Date: 2012-01-31
Contract Duration: 3,057 days
Daily Burn Rate: $3.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Place of Performance
Location: ELKRIDGE, HOWARD County, MARYLAND, 21075
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $10.2 million to PATRICK POWER PRODUCTS, INC. for work described as: Key points: 1. The contract awarded in 2003 and ending in 2012 represents a significant investment in R&D. 2. Full and open competition was utilized, suggesting a potentially competitive bidding process. 3. The Cost Plus Fixed Fee (CPFF) structure carries inherent risks of cost overruns. 4. The long duration of 3057 days raises questions about project evolution and sustained need. 5. The absence of small business participation is noted.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee (CPFF) structure, while common for R&D, can lead to higher costs if not managed tightly. Benchmarking against similar R&D contracts of that era is difficult without more specific project details, but the long duration suggests potential for scope creep or extended development.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The use of full and open competition is a positive indicator for price discovery. However, the CPFF contract type can sometimes limit the aggressive price negotiation seen in other contract types, especially over a prolonged period.
Taxpayer Impact: The long duration and CPFF structure may have resulted in higher taxpayer costs than a more tightly defined, fixed-price contract, though the R&D outcome is the primary value driver.
Public Impact
Taxpayers funded over $10 million for research and development over nearly nine years. The contract's lengthy timeline suggests a complex or evolving research project. The lack of small business involvement means potential opportunities for smaller innovative firms were not utilized.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (3057 days)
- Cost Plus Fixed Fee (CPFF) contract type
- No small business participation
Positive Signals
- Full and open competition utilized
- Research and Development focus
Sector Analysis
This contract falls under the Research and Development sector, specifically NAICS code 541710. Spending in this sector is crucial for technological advancement but often involves higher risk and longer timelines compared to procurement of established goods or services.
Small Business Impact
The contract data indicates no small business participation (sb: false). This suggests that the prime contractor did not subcontract to small businesses or that the nature of the R&D work did not lend itself to small business involvement.
Oversight & Accountability
The long duration of the contract necessitates robust oversight to ensure progress, manage costs, and verify that the R&D objectives remained relevant throughout its lifecycle. The CPFF structure requires diligent monitoring of expenditures and contractor performance.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Extended contract duration
- Cost Plus Fixed Fee (CPFF) structure
- Lack of small business participation
- Potential for cost overruns
- Difficulty in assessing R&D value retrospectively
Tags
research-and-development-in-the-physical, department-of-defense, md, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $10.2 million to PATRICK POWER PRODUCTS, INC.. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is PATRICK POWER PRODUCTS, 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 $10.2 million.
What is the period of performance?
Start: 2003-09-18. End: 2012-01-31.
What specific R&D advancements were achieved under this contract, and how did they align with the Department of the Army's strategic goals at the time?
The specific advancements are not detailed in the provided data. However, R&D contracts aim to push technological boundaries. Understanding the project's outcomes and their alignment with Army goals is crucial to assessing the true value derived from the $10.16 million investment. Without this, it's difficult to definitively gauge the return on investment beyond the contractual completion.
Given the Cost Plus Fixed Fee structure and the nearly 9-year duration, what mechanisms were in place to control costs and prevent potential overruns?
The CPFF structure inherently shifts some cost risk to the government. Effective oversight would involve detailed reviews of incurred costs, regular progress reports, and potentially incentive clauses tied to performance or cost savings, though the latter is less common with CPFF. The long duration amplifies the need for vigilant monitoring to ensure the fixed fee remained appropriate for the evolving scope and effort.
How did the full and open competition process ensure the best value was obtained, considering the long-term nature and R&D focus of the contract?
Full and open competition theoretically allows the government to solicit proposals from all responsible sources, fostering a competitive environment that drives down prices and encourages innovation. For R&D, however, 'best value' often involves qualitative factors beyond price, such as technical approach and past performance. The long duration suggests that the initial competition likely focused on the potential for innovation and the contractor's capability to execute complex research over an extended period.
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: FULL AND OPEN COMPETITION
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Contractor Details
Address: 6655P AMBERTON DRIVE, ELKRIDGE, MD, 21075
Business Categories: Category Business, Small Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2003-09-18
Current End Date: 2012-01-31
Potential End Date: 2012-01-31 00:00:00
Last Modified: 2018-01-30
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