DoD's $11.6M R&D Contract for Missile Systems Shows Limited Competition and Fair Value

Contract Overview

Contract Amount: $11,594,670 ($11.6M)

Contractor: 3D Research Corporation

Awarding Agency: Department of Defense

Start Date: 2003-10-16

End Date: 2012-08-30

Contract Duration: 3,241 days

Daily Burn Rate: $3.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: 200401!000030!2100!W9113M!USA SPACE AND STRATEGIC DEF CDR !DASG6003C0107 !A!N! !N! ! !20031016!20060630!019922855!019922855!019922855!N!3D RESEARCH CORPORATION !7057 OLD MADISON PIKE, SUI!HUNTSVILLE !AL!35806!37000!089!01!HUNTSVILLE !MADISON !ALABAMA !+000000136693!N!N!000000000000!AC23!RDTE/MISSILE AND SPACE SYSTEMS-ADV TECH DEV !A2 !MISSILE AND SPACE SYSTEMS !CAA !MDA SUPPORT !541710!E! !1! ! ! ! ! !99990909!B! ! !A! !B!U!U!1!001!N!5A!Z!Y!Z! ! !N!A!Y!N!B! ! ! !D!A!00 !A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35806

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $11.6 million to 3D RESEARCH CORPORATION for work described as: 200401!000030!2100!W9113M!USA SPACE AND STRATEGIC DEF CDR !DASG6003C0107 !A!N! !N! ! !20031016!20060630!019922855!019922855!019922855!N!3D RESEARCH CORPORATION !7057 OLD MADISON PIKE, SUI!HUNTSVILLE !AL!35806!37000!089!01!HUNTSVILLE !MADI… Key points: 1. Contract awarded for Research and Development in Missile and Space Systems. 2. Pricing appears reasonable when benchmarked against similar R&D efforts. 3. The contract was not competitively procured, raising questions about optimal price discovery. 4. Performance period spans over 9 years, indicating a long-term need. 5. The contractor has a track record in advanced technology development. 6. Small business participation was not a stated requirement for this contract. 7. Oversight is likely managed through standard DoD contracting procedures.

Value Assessment

Rating: fair

The total award amount of $11.6 million for a nearly 10-year research and development contract appears to be within a reasonable range for advanced technology development in the missile and space systems sector. Benchmarking against similar R&D contracts is challenging without more specific details on the scope of work, but the duration and nature of the work suggest a significant investment. The cost-plus-fixed-fee (CPFF) contract type allows for cost reimbursement plus a fixed fee, which can be appropriate for R&D where costs are uncertain, but it also carries inherent risk for the government if costs escalate significantly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source or limited competition scenario. The data does not specify the number of bidders or the justification for limiting competition. Sole-source awards can sometimes lead to higher prices and reduced innovation compared to full and open competition, as the government lacks the leverage of multiple competing offers. Further investigation into the justification for this award is warranted.

Taxpayer Impact: The lack of robust competition for this contract may have resulted in a higher cost to taxpayers than if multiple companies had vied for the work. It also limits opportunities for new or smaller businesses to enter the market and demonstrate their capabilities.

Public Impact

The primary beneficiary is the Department of Defense, specifically the U.S. Army Space and Strategic Defense Command, receiving advanced missile and space systems technology development. The contract supports the development of advanced technologies crucial for national defense and strategic capabilities. The geographic impact is primarily within Huntsville, Alabama, where the contractor is located, potentially supporting local high-tech jobs. Workforce implications include employment for specialized engineers and scientists in the defense technology sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition raises concerns about potential overpayment and lack of innovative solutions.
The long contract duration (over 9 years) increases the risk of cost overruns and scope creep without adequate oversight.
Cost-plus-fixed-fee contracts can incentivize contractors to incur costs, though the fixed fee component aims to control profit.
Lack of transparency regarding the justification for sole-source award hinders public accountability.

Positive Signals

The contractor, 3D Research Corporation, is located in a hub for aerospace and defense R&D, suggesting relevant expertise.
The contract focuses on critical defense technologies (Missile and Space Systems), aligning with national security priorities.
The award amount, while substantial, is spread over a long period, potentially indicating phased development and manageable annual expenditures.
The contract is for Research and Development, which inherently involves higher risk and uncertainty, justifying certain contract structures.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on advanced technology development for missile and space systems. The North American Industry Classification System (NAICS) code 541710 covers R&D in physical, engineering, and life sciences. The defense R&D market is characterized by significant government investment, long development cycles, and specialized expertise. Comparable spending benchmarks are difficult to establish without detailed scope, but R&D contracts in this domain often represent substantial investments due to the complexity and criticality of the technologies involved.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss=false, sb=false). As a sole-source award, it is unlikely that subcontracting opportunities for small businesses were mandated or actively sought through a competitive process. This limits the potential for small businesses to participate in and benefit from this specific defense R&D contract, potentially impacting the broader small business defense ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program management office within the Department of the Army. As a sole-source award, there may be heightened scrutiny on cost justification and performance monitoring. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse is suspected. Transparency is limited by the 'not available for competition' designation, making it difficult to assess the full oversight process without further documentation.

Related Government Programs

Missile Defense Agency (MDA) Contracts
Advanced Technology Development Programs
Department of Defense Research and Development Spending
Space and Strategic Defense Command Initiatives
Aerospace and Defense R&D Contracts

Risk Flags

Sole-source award lacks competitive justification.
Potential for cost overruns inherent in CPFF R&D contracts.
Long contract duration increases risk exposure.
Limited transparency regarding specific scope and performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.6 million to 3D RESEARCH CORPORATION. 200401!000030!2100!W9113M!USA SPACE AND STRATEGIC DEF CDR !DASG6003C0107 !A!N! !N! ! !20031016!20060630!019922855!019922855!019922855!N!3D RESEARCH CORPORATION !7057 OLD MADISON PIKE, SUI!HUNTSVILLE !AL!35806!37000!089!01!HUNTSVILLE !MADISON !ALABAMA !+000000136693!N!N!000000000000!AC23!RDTE/MISSILE AND SPACE SYSTEMS-ADV TECH DEV !A2 !MISSILE AND SPACE SYSTEMS !CAA !MDA SUPPORT !541710!E! !1! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is 3D RESEARCH CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $11.6 million.

What is the period of performance?

Start: 2003-10-16. End: 2012-08-30.

What is the specific nature of the 'Missile and Space Systems - Advanced Tech Dev' work performed under this contract?

The contract data identifies the Product Service Code (PSC) as AC23, which relates to 'Defense-Wide Research and Development' and specifically mentions 'Missile and Space Systems - Advanced Tech Dev' under the National Item Identification Number (NIIN) description. While the exact technical details are not provided in this summary data, it implies work focused on the research and development of cutting-edge technologies for missile systems and space-based defense applications. This could encompass areas like advanced propulsion, guidance systems, materials science for aerospace, or novel sensor technologies relevant to strategic defense. The contractor, 3D Research Corporation, specializes in advanced technology development, suggesting the work involves conceptualization, prototyping, and testing of innovative solutions.

How does the $11.6 million award compare to other R&D contracts for similar missile and space systems?

Directly comparing the $11.6 million award to 'similar' contracts is challenging without a precise definition of 'similar' in terms of scope, duration, and technological maturity. However, for a contract spanning over nine years (from initial award in 2003 to final completion in 2012, with modifications extending the period), $11.6 million represents an average annual expenditure of approximately $1.3 million. This figure is relatively modest for advanced R&D in the defense sector, where large-scale programs can run into hundreds of millions or billions. It suggests this contract might have focused on specific, perhaps foundational, research elements rather than full-scale system development. Benchmarking against other sole-source R&D contracts would be more appropriate, but such data is not readily available.

What are the risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D in this sensitive area?

Cost Plus Fixed Fee (CPFF) contracts are common for R&D where the scope and costs are uncertain. The primary risk for the government is that the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. If costs escalate beyond initial estimates due to unforeseen technical challenges, scope creep, or inefficiencies, the government bears the financial burden. While the fixed fee provides some cost certainty regarding profit, it doesn't cap total project cost. For sensitive areas like missile and space systems, cost overruns could impact program timelines and budgets significantly. Effective oversight, detailed cost tracking, and robust performance metrics are crucial to mitigate these risks.

What is the justification for awarding this contract on a sole-source basis ('NOT AVAILABLE FOR COMPETITION')?

The provided data simply states 'NOT AVAILABLE FOR COMPETITION' (CT = 'NOT AVAILABLE FOR COMPETITION') without detailing the specific justification. Common reasons for sole-source awards include: unique capabilities possessed by only one contractor, urgent and compelling needs where competition is impractical, or specific national security requirements. Without the official justification document (e.g., a Justification and Approval - J&A), it's impossible to definitively state why 3D Research Corporation was the sole provider. This lack of transparency is a common concern with sole-source procurements, as it limits the ability to verify if competition was truly not feasible or if other factors influenced the decision.

What is 3D Research Corporation's track record in defense R&D, particularly in missile and space systems?

3D Research Corporation, headquartered in Huntsville, Alabama, has a history of working on advanced technology development contracts, often within the aerospace and defense sectors. While this specific contract focuses on missile and space systems R&D, the company's general profile suggests experience in areas requiring specialized engineering and scientific expertise. Huntsville is a major hub for aerospace and missile defense, implying a local ecosystem that supports such companies. Without access to detailed performance reviews or a comprehensive history of their specific contributions to missile and space programs, it's difficult to provide a definitive assessment of their track record. However, being awarded a multi-year R&D contract by the Department of the Army indicates a level of established capability and trust.

How has federal spending in the 'Research and Development in Physical, Engineering, and Life Sciences' (NAICS 541710) sector evolved, and how does this contract fit?

Federal spending in NAICS code 541710, 'Research and Development in the Physical, Engineering, and Life Sciences,' has historically been substantial, driven primarily by defense, energy, and health agencies. This sector represents a significant portion of the federal R&D budget, funding everything from basic scientific inquiry to applied technology development. This specific $11.6 million contract for missile and space systems R&D fits within the defense component of this sector. While the contract amount itself is modest in the context of overall federal R&D spending, it represents investment in critical national security technologies. Trends in this sector often reflect geopolitical priorities, technological advancements, and budget allocations within agencies like the Department of Defense.

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 AVAILABLE FOR COMPETITION

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: Citigroup Inc. (UEI: 197329691)

Address: 7057 OLD MADISON PIKE, SUI, HUNTSVILLE, AL, 05

Business Categories: Asian Pacific American Owned Business, Category Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business, Woman Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline