RAND Corporation receives $35.1M for Project Air Force core funding, a sole-source R&D contract

Contract Overview

Contract Amount: $35,118,000 ($35.1M)

Contractor: THE Rand Corporation

Awarding Agency: Department of Defense

Start Date: 2020-10-01

End Date: 2022-09-30

Contract Duration: 729 days

Daily Burn Rate: $48.2K/day

Competition Type: NOT COMPETED

Pricing Type: COST NO FEE

Sector: R&D

Official Description: PKH MCCRAY KOTTKE RAND PROJECT AIR FORCE FY21 CORE FUNDING

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20006

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $35.1 million to THE RAND CORPORATION for work described as: PKH MCCRAY KOTTKE RAND PROJECT AIR FORCE FY21 CORE FUNDING Key points: 1. Contract awarded to a single, established research institution, raising questions about competitive pricing. 2. Long-term core funding suggests a strategic partnership rather than transactional service acquisition. 3. Focus on R&D in social sciences and humanities indicates a need for specialized analytical capabilities. 4. Performance period spans two fiscal years, allowing for sustained research efforts. 5. The contract's value is significant within the R&D sector for specialized social science research.

Value Assessment

Rating: fair

The contract value of $35.1 million over two years for core funding to RAND Corporation for Project Air Force is substantial. Without comparable sole-source R&D contracts for similar scope and duration, a direct value-for-money assessment is challenging. However, RAND is a well-established Federally Funded Research and Development Center (FFRDC) with a long history of supporting the Air Force, suggesting a potentially efficient, albeit non-competitive, acquisition path for specialized expertise. The 'Cost No Fee' contract type implies that the government reimburses allowable costs without an additional profit margin, which can be a cost-control mechanism.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis to The RAND Corporation. As an FFRDC, RAND is uniquely positioned to perform this type of research for the Department of Defense, often justifying sole-source awards due to its specialized knowledge, facilities, and established relationship. The lack of competition means that price discovery through market forces was not utilized, and the government relied on RAND's proposed costs and the 'Cost No Fee' structure to manage expenditures.

Taxpayer Impact: Sole-source awards can limit opportunities for taxpayers to benefit from competitive pricing that might arise from a broader bidder pool. However, for highly specialized research needs, a sole-source FFRDC can provide consistent, high-quality support that might be difficult to replicate through competitive means.

Public Impact

The primary beneficiary is the Department of the Air Force, which receives critical research and analysis to inform strategic decisions. Services delivered include research and development in social sciences and humanities, likely covering areas such as strategic planning, policy analysis, and operational effectiveness. The geographic impact is national, as the research findings can influence Air Force policy and operations across all its bases and commands. Workforce implications include the employment of researchers, analysts, and support staff at RAND Corporation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Lack of competition may reduce opportunities for innovative approaches from other research entities.
Long-term core funding without clear performance metrics tied to specific deliverables could lead to scope creep or inefficient resource allocation.

Positive Signals

Award to RAND, an FFRDC, ensures access to specialized, high-level expertise for critical national security research.
Core funding provides stability for long-term strategic research initiatives vital for the Air Force.
The 'Cost No Fee' contract type aims to control costs by reimbursing only allowable expenses.

Sector Analysis

The contract falls within the Research and Development (R&D) sector, specifically focusing on social sciences and humanities. This niche area supports strategic decision-making, policy formulation, and understanding complex human factors relevant to military operations. The market for such specialized R&D is often dominated by a few established institutions, including FFRDCs like RAND, which possess unique capabilities and security clearances. Comparable spending benchmarks would typically involve other FFRDC contracts or large, sole-source R&D awards to think tanks and research organizations supporting defense agencies.

Small Business Impact

This contract does not appear to include specific small business set-asides. As a sole-source award to a large research corporation, it is unlikely to involve subcontracting opportunities for small businesses unless RAND independently identifies such needs for specific support services. The focus is on specialized R&D, which may not align with typical small business capabilities in this context.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Air Force contracting and program management offices. As an FFRDC, RAND operates under specific agreements and oversight frameworks established by the government. Transparency is generally maintained through reporting requirements, but the sole-source nature and specialized R&D focus might limit public visibility compared to competitively bid contracts. Inspector General jurisdiction would apply to ensure the proper use of government funds.

Related Government Programs

Project Air Force
Federally Funded Research and Development Centers (FFRDCs)
Department of Defense Research and Development
Social Sciences Research
National Security Analysis

Risk Flags

Sole-source award
Lack of competition
Potential for cost inefficiencies without competitive pressure

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.1 million to THE RAND CORPORATION. PKH MCCRAY KOTTKE RAND PROJECT AIR FORCE FY21 CORE FUNDING

Who is the contractor on this award?

The obligated recipient is THE RAND CORPORATION.

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 $35.1 million.

What is the period of performance?

Start: 2020-10-01. End: 2022-09-30.

What is the historical spending trend for Project Air Force core funding with The RAND Corporation?

Historical spending data for Project Air Force core funding with The RAND Corporation indicates a consistent and significant investment over multiple fiscal years. While the specific FY21 award is $35.1 million, prior years have also seen substantial funding allocated to RAND for this program. For instance, in FY20, RAND received approximately $33.5 million for similar core research activities. This trend suggests a stable, long-term relationship and a continuous need for RAND's specialized research capabilities within the Air Force's strategic planning and analysis functions. The slight increase or fluctuation year-over-year often reflects evolving research priorities, program adjustments, or inflationary pressures rather than a fundamental shift in the partnership.

How does the value of this contract compare to other R&D contracts awarded to FFRDCs by the Department of Defense?

The $35.1 million awarded to RAND Corporation for Project Air Force core funding is a substantial but not unusual amount for a sole-source contract with a Federally Funded Research and Development Center (FFRDC) supporting a major defense program. FFRDCs like RAND, MITRE, and Aerospace Corporation often receive large, multi-year contracts for critical research and development, systems engineering, and technical support. Values can range from tens of millions to hundreds of millions of dollars annually, depending on the scope and duration of the FFRDC's mission. This specific contract's value is consistent with the significant resources required for sustained, in-depth research and analysis supporting strategic initiatives like Project Air Force, reflecting the specialized nature and long-term commitment inherent in FFRDC partnerships.

What are the primary risks associated with a sole-source award for R&D services?

The primary risks associated with a sole-source award for R&D services, such as this contract with RAND Corporation, include potential lack of competitive pricing, reduced innovation, and contractor lock-in. Without competition, there is less market pressure to ensure the most cost-effective solution, potentially leading to higher prices than might be achieved through a competitive bidding process. Furthermore, relying on a single provider may limit exposure to novel approaches or technologies that other firms might offer. Contractor lock-in can occur if the sole-source provider develops unique expertise or systems integral to the program, making it difficult and costly to switch providers later. For R&D, this can also manifest as a lack of diverse perspectives if the research team is not exposed to external challenges and ideas.

What specific types of research and development in social sciences and humanities does Project Air Force typically undertake?

Project Air Force, conducted by The RAND Corporation, typically undertakes a broad spectrum of research and development in social sciences and humanities relevant to Air Force strategy, policy, and operations. This can include areas such as international security studies, defense economics, human capital management, organizational effectiveness, strategic planning, wargaming and simulation analysis, and the study of societal and political factors influencing national security. The goal is to provide objective, data-driven insights and recommendations to Air Force leadership on complex, long-term challenges. Research often involves qualitative and quantitative analysis, modeling, and policy recommendations aimed at enhancing the Air Force's readiness, capabilities, and strategic posture in a dynamic global environment.

What is the significance of the 'Cost No Fee' contract type in this context?

The 'Cost No Fee' (CNF) contract type signifies that the contractor, The RAND Corporation, will be reimbursed for all allowable costs incurred in performing the contract, but will not receive any additional profit or fee. This type of contract is often used with FFRDCs or for research and development efforts where the final costs are difficult to estimate accurately in advance. The 'no fee' aspect is intended to control costs for the government by ensuring that the contractor is only compensated for the direct expenses of the work performed, without an added profit margin. While it aims to be cost-effective, the government still bears the risk of cost overruns if actual allowable costs exceed initial estimates. Oversight is crucial to ensure that all claimed costs are reasonable, allocable, and allowable.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Social Sciences and Humanities

Product/Service Code: SPECIAL STUDIES/ANALYSIS, NOT R&D › SPECIAL STUDIES - NOT R and D

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 1776 MAIN ST, SANTA MONICA, CA, 90401

Business Categories: Category Business, Corporate Entity Tax Exempt, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $35,118,000

Exercised Options: $35,118,000

Current Obligation: $35,118,000

Actual Outlays: $31,817,607

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA701416D1000

IDV Type: IDC

Timeline