DoD's $23M Cyber Resiliency contract awarded to Applied Research Solutions shows mixed value and limited competition

Contract Overview

Contract Amount: $22,963,687 ($23.0M)

Contractor: Applied Research Solutions, Inc.

Awarding Agency: Department of Defense

Start Date: 2017-09-13

End Date: 2022-09-25

Contract Duration: 1,838 days

Daily Burn Rate: $12.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 330

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: IGF::CL::IGF SCATI ENGINEERING, PROFESSIONAL, AND ADMINISTRATIVE SUPPORT SERVICES (EPASS) IN SUPPORT OF THE CYBER RESILIENCY OFFICE FOR WEAPON SYSTEMS (CROWS) AFLCMC/EN-EZ

Place of Performance

Location: DAYTON, GREENE County, OHIO, 45433

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $23.0 million to APPLIED RESEARCH SOLUTIONS, INC. for work described as: IGF::CL::IGF SCATI ENGINEERING, PROFESSIONAL, AND ADMINISTRATIVE SUPPORT SERVICES (EPASS) IN SUPPORT OF THE CYBER RESILIENCY OFFICE FOR WEAPON SYSTEMS (CROWS) AFLCMC/EN-EZ Key points: 1. The contract's value proposition appears fair, with a cost-plus-fixed-fee structure that allows for flexibility but requires careful oversight. 2. Competition was limited, with only one bid received after exclusion of sources, raising concerns about price discovery and potential overpayment. 3. Risk indicators are moderate, stemming from the limited competition and the complexity of cyber resiliency services for weapon systems. 4. Performance context is within the Department of the Air Force's cyber resiliency efforts, a critical area for national security. 5. Sector positioning is within Research and Development, specifically focusing on physical and engineering sciences related to cyber defense. 6. The contract's duration of over 5 years suggests a long-term need for these specialized services.

Value Assessment

Rating: fair

The contract utilized a Cost Plus Fixed Fee (CPFF) pricing structure, which can be appropriate for R&D efforts where scope is not fully defined. However, without more comparable contracts or detailed cost breakdowns, it's difficult to definitively benchmark value. The total award of over $22.9 million over nearly five years suggests a significant investment. The fixed fee component provides some cost control, but the cost-reimbursement aspect necessitates robust oversight to ensure efficiency and prevent cost overruns. Benchmarking against similar R&D contracts for cyber defense services would be necessary for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while the initial solicitation was broad, only one offer was ultimately received and considered. This limited competition scenario means there was no active bidding process to drive down prices or encourage innovative solutions from multiple vendors. The single bid raises questions about the effectiveness of the initial solicitation or the market's capacity to respond to such specialized requirements. It suggests a potential lack of market interest or capability among other firms.

Taxpayer Impact: The limited competition means taxpayers may not have received the most competitive pricing possible. Without multiple bids, the government lacks leverage to negotiate lower costs, potentially leading to higher overall expenditure for these critical cyber resiliency services.

Public Impact

The primary beneficiaries are the Department of the Air Force and its weapon systems, which receive enhanced cyber resiliency. Services delivered include research, development, and engineering support crucial for protecting weapon systems from cyber threats. The geographic impact is primarily within the Department of the Air Force's operational and research facilities. Workforce implications include the employment of specialized engineers and researchers in the cyber defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may result in higher costs for taxpayers.
The CPFF structure requires diligent oversight to manage costs effectively.
Reliance on a single contractor for critical cyber resiliency could pose a risk if performance falters.

Positive Signals

The contract addresses a critical national security need for cyber resiliency in weapon systems.
The long duration indicates a sustained commitment to improving cyber defenses.
Applied Research Solutions, Inc. is tasked with providing specialized R&D support.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on engineering and physical sciences applied to cyber resiliency for defense systems. The market for cyber defense R&D is highly specialized and growing, driven by increasing global cyber threats. Comparable spending benchmarks would likely be found within other Department of Defense R&D contracts for advanced technology development and cybersecurity solutions. The total value of $22.9 million over nearly five years is substantial for a single contract in this niche, reflecting the complexity and importance of the work.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss' being false. Furthermore, the 'sb' flag is also false, suggesting no specific subcontracting goals for small businesses were mandated within this award. This means opportunities for small businesses to participate in this specific contract are likely limited, unless they are prime contractors themselves or are subcontracted by the prime without a formal set-aside requirement. The impact on the small business ecosystem for this particular contract is therefore minimal.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. The Cost Plus Fixed Fee structure necessitates close monitoring of costs incurred and the fixed fee earned to ensure compliance with contract terms and prevent waste. Transparency is facilitated through contract reporting mechanisms, though specific details on public accessibility of performance metrics are not provided. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Cybersecurity R&D Programs
Weapon Systems Development
Department of Defense IT Services
Air Force Research Laboratory Contracts
Advanced Technology Development

Risk Flags

Limited competition
Cost-reimbursement contract type requires oversight
Potential for cost overruns
Reliance on a single bidder

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.0 million to APPLIED RESEARCH SOLUTIONS, INC.. IGF::CL::IGF SCATI ENGINEERING, PROFESSIONAL, AND ADMINISTRATIVE SUPPORT SERVICES (EPASS) IN SUPPORT OF THE CYBER RESILIENCY OFFICE FOR WEAPON SYSTEMS (CROWS) AFLCMC/EN-EZ

Who is the contractor on this award?

The obligated recipient is APPLIED RESEARCH SOLUTIONS, 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 $23.0 million.

What is the period of performance?

Start: 2017-09-13. End: 2022-09-25.

What is the track record of Applied Research Solutions, Inc. with the Department of Defense, particularly in cyber resiliency R&D?

Applied Research Solutions, Inc. (ARS) has a history of contracting with the Department of Defense, often in support of research, development, and engineering services. While specific details on their track record in cyber resiliency R&D for weapon systems require deeper analysis of past performance evaluations and contract awards, their involvement in this $22.9 million contract suggests a level of capability deemed sufficient by the Air Force. To fully assess their track record, one would need to examine past performance questionnaires, any reported issues or successes on previous contracts, and their overall portfolio of work within the defense sector. Without access to detailed performance data, it's challenging to provide a comprehensive evaluation beyond their current engagement.

How does the pricing structure (CPFF) compare to other cyber resiliency R&D contracts within the DoD?

The Cost Plus Fixed Fee (CPFF) structure is common for Research and Development (R&D) contracts where the scope of work may evolve or is not fully defined at the outset. This structure allows for flexibility by reimbursing actual costs incurred while providing a fixed fee for the contractor's effort and profit. Compared to fixed-price contracts, CPFF can lead to higher overall costs if not managed diligently, as the government bears the risk of cost overruns. However, for complex R&D requiring innovation and adaptation, it can be more appropriate than fixed-price arrangements. Benchmarking CPFF contracts requires careful consideration of the specific R&D objectives, the level of technical complexity, and the contractor's overhead rates. Without specific comparable data points for similar cyber resiliency R&D efforts, a precise comparison is difficult, but the structure itself indicates a need for robust government oversight.

What are the primary risks associated with a 'Full and Open Competition After Exclusion of Sources' award, especially for critical defense R&D?

The primary risk associated with 'Full and Open Competition After Exclusion of Sources' leading to a single bid is the lack of robust price competition. This can result in the government paying a higher price than if multiple vendors had competed. It also limits the government's ability to benefit from a wider range of innovative solutions or technical approaches that might have been proposed by other qualified firms. For critical defense R&D, this limited competition could mean suboptimal technological advancements or a reduced pool of expertise available to address evolving threats. Furthermore, it raises questions about the effectiveness of the initial solicitation process in attracting a competitive field of bidders, potentially indicating market limitations or issues with the solicitation's clarity or requirements.

What is the expected effectiveness of this contract in enhancing the cyber resiliency of Air Force weapon systems?

The expected effectiveness of this contract hinges on the successful execution of the research and development tasks by Applied Research Solutions, Inc. The contract aims to bolster the cyber resiliency of Air Force weapon systems, a critical component of national security in the face of increasing cyber threats. The CPFF structure, while flexible, necessitates stringent oversight to ensure that the R&D efforts are focused, efficient, and aligned with the Air Force's strategic cyber defense goals. The ultimate effectiveness will be measured by the tangible improvements in the security posture of weapon systems, the development of new protective technologies, and the successful integration of these advancements into operational capabilities. The long duration suggests a commitment to achieving significant, lasting improvements.

How does the historical spending on cyber resiliency R&D by the Department of the Air Force compare to this specific contract's value?

Analyzing historical spending on cyber resiliency R&D by the Department of the Air Force is crucial for contextualizing this $22.9 million contract. While specific aggregate figures for 'cyber resiliency R&D' can be complex to isolate due to categorization, the Air Force consistently invests billions in research, development, testing, and evaluation (RDT&E) annually, with a significant portion allocated to cybersecurity and advanced technologies. This contract represents a substantial, but not unprecedented, investment for a single R&D effort in this domain. To provide a precise comparison, one would need to examine the Air Force's RDT&E budget allocations over the past several years, identifying similar contracts or programs focused on cyber defense for weapon systems. This contract's value appears to be within the expected range for specialized, long-term R&D projects in a high-priority area like cyber resiliency.

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: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 330

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Riverside Research Institute

Address: 51 PLUM ST STE 240, BEAVERCREEK, OH, 45440

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

Financial Breakdown

Contract Ceiling: $73,351,570

Exercised Options: $40,069,196

Current Obligation: $22,963,687

Actual Outlays: $1,140,344

Subaward Activity

Number of Subawards: 24

Total Subaward Amount: $4,535,935

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q14OADS742

IDV Type: IDC

Timeline