DoD's $51.4M R&D Contract with Aerojet Rocketdyne Faces Scrutiny Over Value and Competition
Contract Overview
Contract Amount: $51,428,692 ($51.4M)
Contractor: Aerojet Rocketdyne Inc
Awarding Agency: Department of Defense
Start Date: 2009-04-27
End Date: 2017-01-31
Contract Duration: 2,836 days
Daily Burn Rate: $18.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST NO FEE
Sector: R&D
Official Description: RESEARCH AND DEVELOPMENT (R&D) - STAGE 2 LARGE CLASS TECH DEMO
Place of Performance
Location: SACRAMENTO, SACRAMENTO County, CALIFORNIA, 94257
Plain-Language Summary
Department of Defense obligated $51.4 million to AEROJET ROCKETDYNE INC for work described as: RESEARCH AND DEVELOPMENT (R&D) - STAGE 2 LARGE CLASS TECH DEMO Key points: 1. Significant investment in advanced R&D for aerospace technology. 2. Aerojet Rocketdyne Inc. is a major player in the aerospace sector. 3. Potential risks include cost overruns and effectiveness of the technology demonstration. 4. Spending falls within the R&D sector, specifically physical and engineering sciences.
Value Assessment
Rating: questionable
The contract's 'Cost No Fee' structure for R&D stage 2 large class tech demo makes direct value assessment difficult without detailed cost breakdowns. The total award of $51.4M over 2836 days requires further analysis to determine if it aligns with industry benchmarks for similar technology development phases.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the long duration and specific nature of R&D can sometimes limit the pool of truly competitive bidders, potentially impacting price discovery.
Taxpayer Impact: Taxpayer funds are allocated to advance critical defense technology. The effectiveness and ultimate utility of the demonstrated technology will determine the long-term taxpayer value.
Public Impact
Advancement of cutting-edge aerospace technology with potential dual-use applications. Supports innovation within the defense industrial base. Long-term contract duration may indicate complex development needs. Potential for follow-on contracts based on successful demonstration.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of fee in a 'Cost No Fee' contract can sometimes disincentivize contractor efficiency.
- Long contract duration (2836 days) increases exposure to changing technological landscapes and economic conditions.
- Specific R&D focus may have limited applicability beyond defense needs.
- No explicit mention of small business participation.
Positive Signals
- Awarded under full and open competition.
- Focus on critical R&D for national security.
- Contractor is a recognized leader in the field.
Sector Analysis
This contract falls under the Research and Development sector, specifically NAICS code 541712. Spending in this area is crucial for maintaining technological superiority but can be subject to high uncertainty and long development cycles. Benchmarks are difficult due to the bespoke nature of R&D projects.
Small Business Impact
The data does not indicate any specific provisions or set-asides for small businesses in this contract. Given the large scale and specialized nature of the R&D, it is possible that small businesses were not primary bidders or subcontractors.
Oversight & Accountability
The 'Cost No Fee' structure implies significant government oversight on incurred costs. However, the long duration and R&D focus necessitate continuous monitoring of progress, technical milestones, and adherence to the contract's objectives to ensure accountability.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Cost control challenges in 'Cost No Fee' R&D contracts.
- Risk of technological obsolescence over the long contract duration.
- Difficulty in assessing true value and ROI for R&D investments.
- Potential for scope creep in complex technology development.
- Limited visibility into small business participation.
Tags
research-and-development-in-the-physical, department-of-defense, ca, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $51.4 million to AEROJET ROCKETDYNE INC. RESEARCH AND DEVELOPMENT (R&D) - STAGE 2 LARGE CLASS TECH DEMO
Who is the contractor on this award?
The obligated recipient is AEROJET ROCKETDYNE INC.
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 $51.4 million.
What is the period of performance?
Start: 2009-04-27. End: 2017-01-31.
How does the 'Cost No Fee' structure impact contractor motivation and cost control in this specific R&D context?
A 'Cost No Fee' contract means the contractor is reimbursed for allowable costs but receives no profit. While this can incentivize cost consciousness, it might also reduce motivation for innovation or exceeding basic requirements if not carefully managed. For R&D, it shifts the risk entirely to the government, requiring robust oversight to ensure efficient use of funds and achievement of technical goals.
What are the key performance indicators used to measure the success and value of this technology demonstration over its 8-year duration?
Success metrics for a large-class tech demo typically include achieving specific technical performance thresholds, demonstrating system integration, validating operational concepts, and assessing readiness for potential future development or deployment. Value is assessed by the degree to which the demonstrated technology meets or exceeds its objectives and its potential impact on future defense capabilities and costs.
Given the full and open competition, what factors might have limited the number of competitive bids for this specialized R&D contract?
Specialized R&D contracts often require unique technical expertise, significant prior experience in a niche field, and substantial resources. The complexity and long-term nature of the project, coupled with specific security or facility clearances, can naturally limit the pool of qualified bidders, even under a full and open solicitation.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 2
Pricing Type: COST NO FEE (S)
Evaluated Preference: NONE
Contractor Details
Parent Company: Aerojet Rocketdyne Holdings, Inc. (UEI: 001316330)
Address: HWY 50 & AEROJET RD., RANCHO CORDOVA, CA, 95670
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $51,641,068
Exercised Options: $51,641,068
Current Obligation: $51,428,692
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2009-04-27
Current End Date: 2017-01-31
Potential End Date: 2017-01-31 00:00:00
Last Modified: 2016-10-18
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