DoD's $32.3M R&D contract with Schafer Corporation shows concerning value and limited competition

Contract Overview

Contract Amount: $32,327,944 ($32.3M)

Contractor: Schafer Government Services, LLC

Awarding Agency: Department of Defense

Start Date: 1999-05-14

End Date: 2010-09-22

Contract Duration: 4,149 days

Daily Burn Rate: $7.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: 199908!5700!0357!CA09 !45 CONS/LGC !F0865099C0002 !A!*!P00004 !19990514!19990930!069341303!069341303!069341303!N!8F406!SCHAFER CORPORATION !321 BILLERICA RD !CHELMSFORD !MA!01824!57792!001!06!PLEASANTON !ALAMEDA !CALIFORNIA!0001!+000000500000!N!N!000000000000!AZ15!RDTE/OTHER RESEARCH & DEVELOPMENT-ENG/MANUF DEVEL !C9E!ALL OTHER SUPPLIES AND EQUIPME!3000!NOT DISCERNABLE OR CLASSIFIED !8731!3!*!*!B!B!N!Z!D !N!U!1!001!N!1G!Z!Y!Z!* !* !N!B!*!A!*!A!A!A!*!* !*!N!A!B!N!*!*!*!*!*!

Place of Performance

Location: CHELMSFORD, MIDDLESEX County, MASSACHUSETTS, 01824

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $32.3 million to SCHAFER GOVERNMENT SERVICES, LLC for work described as: 199908!5700!0357!CA09 !45 CONS/LGC !F0865099C0002 !A!*!P00004 !19990514!19990930!069341303!069341303!069341303!N!8F406!SCHAFER CORPORATION !321 BILLERICA RD !CHELMSFORD !MA!01824!57792!001!06!PLEASANTON !ALAMED… Key points: 1. The contract's value proposition is questionable given the lack of detailed performance metrics and the high per-unit cost. 2. Limited competition raises concerns about price discovery and potential overpayment. 3. The contract's duration and cost-plus-fixed-fee structure may incentivize cost overruns. 4. Oversight appears minimal, with no clear indication of performance monitoring or accountability. 5. The contract's focus on R&D in physical, engineering, and life sciences positions it within a critical but potentially high-risk sector.

Value Assessment

Rating: concerning

The total award of $32.3 million over a period of approximately 11 years suggests a significant investment. However, without specific performance metrics or deliverables detailed in the provided data, it is difficult to benchmark the value for money. The cost-plus-fixed-fee (CPFF) contract type, while common for R&D, can lead to higher costs if not managed tightly. Comparing this to similar R&D contracts is challenging due to the lack of specific service details, but the extended duration and significant funding raise questions about efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This significantly limits the government's ability to explore different pricing structures and technical approaches from multiple vendors. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities), they inherently reduce the pressure on the contractor to offer the most competitive pricing.

Taxpayer Impact: Sole-source awards mean taxpayers may not be receiving the best possible price for the services rendered, as the government did not leverage competitive market forces to drive down costs.

Public Impact

The primary beneficiaries are likely the research and development teams at Schafer Corporation, contributing to advancements in physical, engineering, and life sciences. The contract supports research and development activities, potentially leading to new technologies or improved processes within the Department of Defense. The geographic impact is centered in Massachusetts, where Schafer Corporation is located, potentially supporting local employment and economic activity. Workforce implications include the employment of scientists, engineers, and support staff involved in the research and development efforts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of transparency in performance metrics makes value assessment difficult.
Sole-source award limits competitive pricing and may lead to higher costs for taxpayers.
Cost-plus-fixed-fee structure can incentivize cost escalation without strong oversight.
Extended contract duration without clear milestones raises concerns about project management and efficiency.
Limited public information on the specific R&D outcomes hinders assessment of impact.

Positive Signals

Contract supports critical R&D in physical, engineering, and life sciences, aligning with national security objectives.
Schafer Corporation, as the contractor, likely possesses specialized expertise required for the R&D tasks.
The contract provides long-term funding stability for research efforts.
The award is associated with a specific NAICS code (541710), indicating a focus on a defined area of scientific endeavor.

Sector Analysis

This contract falls under the Research and Development in Physical, Engineering, and Life Sciences sector, a critical area for defense innovation. The market for R&D services within the defense sector is substantial, with numerous contractors vying for government funding. Comparable spending benchmarks are difficult to establish without knowing the specific R&D focus, but the $32.3 million award over 11 years indicates a significant, long-term investment in a specialized area. This contract likely represents a portion of the DoD's broader investment in advanced technology development.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor is there information suggesting significant subcontracting opportunities for small businesses. As a sole-source award to a specific entity, it is unlikely to have been structured to promote small business participation. This means the direct economic benefits to the small business ecosystem from this particular contract are likely minimal.

Oversight & Accountability

Oversight mechanisms for this contract are not explicitly detailed in the provided data. As a sole-source, cost-plus-fixed-fee contract, robust oversight would typically involve regular reviews of progress, cost expenditures, and adherence to research objectives. The absence of readily available information on specific oversight bodies or inspector general involvement raises questions about the transparency and accountability of this significant award.

Related Government Programs

Department of Defense Research and Development Programs
Advanced Technology Development Contracts
Physical Sciences Research
Engineering Development Contracts
Life Sciences Research Contracts

Risk Flags

Sole-source award
Lack of performance metrics
Cost-plus-fixed-fee contract type
Extended contract duration
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.3 million to SCHAFER GOVERNMENT SERVICES, LLC. 199908!5700!0357!CA09 !45 CONS/LGC !F0865099C0002 !A!*!P00004 !19990514!19990930!069341303!069341303!069341303!N!8F406!SCHAFER CORPORATION !321 BILLERICA RD !CHELMSFORD !MA!01824!57792!001!06!PLEASANTON !ALAMEDA !CALIFORNIA!0001!+000000500000!N!N!000000000000!AZ15!RDTE/OTHER RESEARCH & DEVELOPMENT-ENG/MANUF DEVEL !C9E!ALL OTHER SUPPLIES AND EQUIPME!3000!NOT DISCERNABLE OR CLASSIFIED !8731!3!*!*!B!B!N!Z!D !N!U!1!0

Who is the contractor on this award?

The obligated recipient is SCHAFER GOVERNMENT SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $32.3 million.

What is the period of performance?

Start: 1999-05-14. End: 2010-09-22.

What specific research and development activities were undertaken under this contract?

The provided data indicates the contract's purpose was 'RDTE/OTHER RESEARCH & DEVELOPMENT-ENG/MANUF DEVEL', falling under NAICS code 541710 (Research and Development in the Physical, Engineering, and Life Sciences). However, the specific projects, experiments, or technological advancements pursued are not detailed. This lack of specificity makes it challenging to assess the direct impact or relevance of the R&D efforts. Further investigation into contract line item numbers (CLINs) or associated technical reports would be necessary to understand the precise nature of the work performed.

How does the $32.3 million award compare to similar R&D contracts within the DoD for the period?

Benchmarking this $32.3 million award against similar DoD R&D contracts is difficult without more specific details on the scope of work. The contract spanned from May 1999 to September 2010, a considerable duration. While the total amount is substantial, the 'per-year' average is around $2.7 million. This figure needs to be contextualized by the complexity and criticality of the R&D. Contracts for basic research might have lower costs than those for advanced engineering or manufacturing development. Without knowing if this was for fundamental science or applied engineering, a direct comparison is speculative. However, for long-term, specialized R&D, this funding level is not inherently unreasonable, but the lack of competition and performance data makes a definitive value judgment impossible.

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

Sole-source contracts carry the inherent risk of reduced price competition, potentially leading to higher costs for the government. The cost-plus-fixed-fee (CPFF) structure, while allowing flexibility for R&D, can incentivize contractors to incur more costs to increase their fixed fee, especially if oversight is weak. A long duration (over 11 years) increases the risk of scope creep, technological obsolescence, and potential cost overruns if not managed diligently. For taxpayers, the primary risks are paying a premium due to lack of competition and potentially funding R&D that does not yield desired outcomes or becomes outdated before deployment.

What was Schafer Corporation's track record or specific expertise that justified a sole-source award?

The provided data does not contain information regarding Schafer Corporation's specific track record or the justification for awarding this contract on a sole-source basis. Typically, sole-source justifications would cite unique capabilities, proprietary technology, or a lack of other responsible sources. Without this documentation, it's impossible to assess whether Schafer possessed unique qualifications that warranted bypassing the competitive bidding process. Further review of the contract award file, specifically the justification for other than full and open competition (JOFOC), would be required to understand this aspect.

Are there any indications of program effectiveness or return on investment from this contract?

There is no information within the provided data to assess the program's effectiveness or return on investment. The data focuses on contract award details (value, duration, type, contractor) rather than performance outcomes or deliverables. Evaluating the effectiveness of R&D contracts is inherently challenging and often requires access to technical reports, testing results, and subsequent program implementations. Without such data, it is impossible to determine if the $32.3 million investment yielded valuable technological advancements or met its intended objectives.

How has federal spending in the 'Research and Development in Physical, Engineering, and Life Sciences' sector evolved since this contract was awarded?

Federal spending in the R&D sector, particularly within the Department of Defense, has generally seen fluctuations but has trended upwards over the long term, driven by evolving geopolitical landscapes and technological advancements. Post-1999, significant investments have continued in areas like artificial intelligence, cybersecurity, advanced materials, and biotechnology, all falling under the broad umbrella of physical, engineering, and life sciences. While this specific contract represents a small fraction of the overall federal R&D budget, the trend indicates a sustained commitment to innovation. However, the specific allocation within this sector can shift based on national priorities and emerging threats.

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 › OTHER RESEARCH/DEVELOPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: Citigroup Inc. (UEI: 197329691)

Address: 321 BILLERICA RD, CHELMSFORD, MA, 03

Business Categories: Category Business, Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline