DoD's $693M contract for electronics and communication R&D awarded to TELZEN K.K. in 1999

Contract Overview

Contract Amount: $15,063,187 ($15.1M)

Contractor: Telzen K.K.

Awarding Agency: Department of Defense

Start Date: 1999-07-26

End Date: 2004-06-30

Contract Duration: 1,801 days

Daily Burn Rate: $8.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: 199910!5700!0199!GQ03 !AFRL/IFKRE !F3060299C0176 !A!*!* !19990726!20000725!693086472!693086472!693086472!N!94117!TELZEN K.K. !19-6, KANSEICHO, TSURUMI- !YOKOHAMA !JA!230 !50260!011!33!NASHUA !HILLSBOROUGH !N.H. !0001!+000000663068!N!N!000000000000!AD92!RDTE/OTHER DEFENSE-APPLIED RESEARCH !A7 !ELECTRONICS AND COMMUNICATION !3000!NOT DISCERNABLE OR CLASSIFIED !8731!3!*!*!*!B!B!*!A !N!U!2!002!B!* !Z!Y!Z!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03061

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $15.1 million to TELZEN K.K. for work described as: 199910!5700!0199!GQ03 !AFRL/IFKRE !F3060299C0176 !A!*!* !19990726!20000725!693086472!693086472!693086472!N!94117!TELZEN K.K. !19-6, KANSEICHO, TSURUMI- !YOKOHAMA !JA!230 !50260!011!33!NASHUA !HILLSB… Key points: 1. Contract awarded for research and development in electronics and communication, indicating a focus on advanced technological capabilities. 2. The contract utilized a Cost Plus Fixed Fee (CPFF) pricing structure, which can lead to cost overruns if not managed carefully. 3. Awarded under full and open competition, suggesting a robust market for the required services. 4. The duration of the contract was 1801 days, implying a long-term project requiring sustained effort. 5. The contract was awarded by the Department of the Air Force, highlighting its role in supporting Air Force technological advancements. 6. The North American Industry Classification System (NAICS) code 541710 points to research and development services.

Value Assessment

Rating: questionable

The contract's value of $693 million over approximately five years represents a significant investment in R&D. Without specific benchmarks for similar electronics and communication R&D contracts from the same period, it is difficult to definitively assess value for money. The CPFF structure, while common for R&D, carries inherent risks of cost escalation. Further analysis would require comparing the contractor's performance and final costs against initial estimates and industry standards for similar research endeavors.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The fact that it was competed suggests a healthy market for the specialized R&D services required. The number of bids received would provide further insight into the level of competition and its potential impact on pricing.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and encourage innovation, leading to better value for public funds.

Public Impact

The primary beneficiaries are likely the Department of the Air Force and potentially other branches of the Department of Defense, gaining access to advanced electronics and communication technologies. The services delivered involve research and development, aiming to create or improve technologies critical for national security and defense. The geographic impact is primarily within New Hampshire, where the contractor is located, potentially creating local employment and economic activity. Workforce implications include the employment of scientists, engineers, and technicians involved in cutting-edge research and development.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contracts can incentivize contractors to increase costs to maximize their fixed fee, potentially leading to higher overall expenditures than anticipated.
The substantial value of the contract ($693M) necessitates rigorous oversight to ensure funds are used efficiently and effectively towards R&D objectives.
Long contract duration (1801 days) increases the risk of scope creep or misalignment with evolving technological needs if not actively managed.

Positive Signals

Awarded under full and open competition, suggesting a competitive process that should yield fair pricing and innovative solutions.
The contract focuses on Research and Development (RDTE), indicating investment in future technological capabilities crucial for national defense.
The contractor's location in New Hampshire may stimulate regional economic growth and specialized employment opportunities.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on electronics and communication technologies. The market for defense-related R&D is characterized by high specialization, significant government investment, and long development cycles. Comparable spending benchmarks would typically involve other large-scale R&D contracts awarded by the DoD for similar technological advancements, often in the hundreds of millions to billions of dollars range.

Small Business Impact

The data indicates this contract was not set aside for small businesses (sb: false). As a large-value R&D contract, it is unlikely to have significant direct subcontracting opportunities for small businesses unless specified in the contract terms, which are not detailed here. The primary focus is on the prime contractor's capabilities.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting agency (Department of the Air Force) through program managers and contract specialists. Accountability measures would include performance reviews, milestone tracking, and financial audits. Transparency is often limited for defense R&D contracts due to national security considerations, but reporting requirements would be stipulated in the contract. Inspector General jurisdiction would apply for investigations into fraud, waste, or abuse.

Related Government Programs

Advanced Electronics Research
Communication Systems Development
Department of Defense Research and Development Programs
Air Force Science and Technology Investments
Technology Innovation Initiatives

Risk Flags

Cost Plus Fixed Fee (CPFF) pricing structure carries inherent risk of cost escalation.
Long contract duration (1801 days) increases potential for scope creep and evolving requirements.
Lack of specific performance metrics or deliverables in the provided data makes outcome assessment difficult.
Limited information on contractor's past performance requires further investigation for a complete risk profile.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.1 million to TELZEN K.K.. 199910!5700!0199!GQ03 !AFRL/IFKRE !F3060299C0176 !A!*!* !19990726!20000725!693086472!693086472!693086472!N!94117!TELZEN K.K. !19-6, KANSEICHO, TSURUMI- !YOKOHAMA !JA!230 !50260!011!33!NASHUA !HILLSBOROUGH !N.H. !0001!+000000663068!N!N!000000000000!AD92!RDTE/OTHER DEFENSE-APPLIED RESEARCH !A7 !ELECTRONICS AND COMMUNICATION !3000!NOT DISCERNABLE OR CLASSIFIED !8731!3!*!*!*!B!B!*!A !N!U!2!0

Who is the contractor on this award?

The obligated recipient is TELZEN K.K..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $15.1 million.

What is the period of performance?

Start: 1999-07-26. End: 2004-06-30.

What was the specific nature of the electronics and communication research conducted under this contract?

The provided data indicates the contract falls under NAICS code 541710 (Research and Development in the Physical, Engineering, and Life Sciences) and a Product Service Code (PSC) of AD92 (R&D/Other Defense-Applied Research). While the specific research focus isn't detailed, it pertains to 'Electronics and Communication.' This suggests the work likely involved developing new or improving existing technologies in areas such as signal processing, telecommunications, radar, electronic warfare, or advanced computing related to communication systems for defense applications. The 'RDTE/OTHER DEFENSE-APPLIED RESEARCH' classification implies a focus on fundamental research with potential military applications, rather than immediate product development.

How did the final cost compare to the initial estimated cost for this contract?

The provided data shows an initial award amount of $693,086,472 and a final obligated amount of the same figure. This suggests that the contract was either completed at the initially awarded value, or that the final obligated amount reflects the total expenditure without a significant deviation from the initial estimate. However, without knowing the initial estimated cost before the award or any modifications, it's impossible to determine if there were cost overruns or underruns relative to the original projection. The 'COST PLUS FIXED FEE' (CPFF) structure means the contractor is reimbursed for allowable costs plus a fixed fee, which can sometimes lead to costs exceeding initial expectations if not tightly managed.

What was the contractor's performance history with the Department of Defense prior to this award?

The provided data does not include information on TELZEN K.K.'s prior performance history with the Department of Defense. To assess their track record, one would need to consult contract databases (like FPDS or SAM.gov) for previous awards, performance reviews (e.g., Contractor Performance Assessment Reporting System - CPARS), and any documented issues or successes. A thorough review would examine their history of meeting deadlines, staying within budget, and delivering quality work on similar R&D projects.

Were there any significant technological breakthroughs or deliverables resulting from this contract?

The provided data does not specify the technological breakthroughs or deliverables achieved under this contract. Such information is typically found in program reports, technical documentation, or public announcements related to the research outcomes. Given the 'Applied Research' classification, the results might include prototypes, advanced concepts, feasibility studies, or foundational scientific knowledge that could lead to future defense technologies. Without access to these specific R&D outputs, it's impossible to quantify the direct impact or success in terms of tangible breakthroughs.

How does the spending on this contract compare to other similar R&D efforts in electronics and communication within the DoD during that period?

The $693 million contract awarded in 1999 for electronics and communication R&D was a substantial investment for its time. To benchmark it, one would need to identify other DoD contracts for similar R&D in the late 1990s and early 2000s. Factors like the specific technological focus (e.g., advanced radar vs. basic communication theory), the duration, and the contracting agency would be crucial for a fair comparison. Without a detailed analysis of comparable contracts, it's difficult to definitively state whether this represented high, low, or average spending for its scope and era.

What were the key risks identified for this contract, and how were they mitigated?

The primary risks associated with a large, long-term R&D contract like this, especially under a Cost Plus Fixed Fee (CPFF) structure, would include cost overruns, schedule delays, and the possibility of the research not yielding the desired technological advancements. Mitigation strategies typically involve robust program management, regular technical reviews, clear performance metrics, strong oversight from the contracting officer's representative (COR), and potentially incentivizing efficient performance. The data provided does not detail specific identified risks or mitigation plans, which would normally be part of the contract's management documentation.

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 › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 19-6, KANSEICHO, TSURUMI-, YOKOHAMA

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $663,068

Exercised Options: $663,068

Current Obligation: $15,063,187

Contract Characteristics

Cost or Pricing Data: YES

Timeline