DoD's $10.6M contract for electronic equipment R&D awarded to Irvine Sensors Corp. shows fair value

Contract Overview

Contract Amount: $10,561,231 ($10.6M)

Contractor: ISC8 Inc.

Awarding Agency: Department of Defense

Start Date: 2004-05-28

End Date: 2012-09-30

Contract Duration: 3,047 days

Daily Burn Rate: $3.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 22

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: 200408!000097!5700!GR19 !DET 1 AFRL/PKD !FA865004C7120 !A!N! !Y! ! !20040528!20060328!038058038!038058038!038058038!N!IRVINE SENSORS CORPORATION !3001 REDHILL AVE BLDG 3-10!COSTA MESA !CA!92626!16532!059!06!COSTA MESA !ORANGE !CALIFORNIA!+000001093975!N!N!000003256427!AC62!RDTE/ELECTRONICS & COMMUNICATION EQ-APPLIED RESEA !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !541710!E! !3! ! ! ! ! !99990909!B! ! !A! !A!N!U!2!022!E! !Z!N!Z! ! !N!B!N!N! ! !Z! !A!A!00 !A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: COSTA MESA, ORANGE County, CALIFORNIA, 92626

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $10.6 million to ISC8 INC. for work described as: 200408!000097!5700!GR19 !DET 1 AFRL/PKD !FA865004C7120 !A!N! !Y! ! !20040528!20060328!038058038!038058038!038058038!N!IRVINE SENSORS CORPORATION !3001 REDHILL AVE BLDG 3-10!COSTA MESA !CA!92626!16532!059!06!COSTA MESA !ORAN… Key points: 1. Contract value of $10.6M for R&D in electronics and communication equipment. 2. Awarded to Irvine Sensors Corporation, a company with a track record in defense contracting. 3. Competition was full and open after exclusion of sources, indicating a deliberate selection process. 4. Contract duration of over 8 years suggests a long-term need for the developed technology. 5. The contract falls under Research and Development in Physical, Engineering, and Life Sciences. 6. Geographic location of the contractor is Costa Mesa, California.

Value Assessment

Rating: fair

The contract's total value of $10.6 million over an 8-year period averages to approximately $1.3 million per year. Benchmarking this against similar R&D contracts in electronics and communication equipment is challenging without more specific data on the scope and deliverables. However, the cost-plus-fixed-fee (CPFF) contract type suggests that while the contractor is incentivized to control costs, there is some flexibility for unforeseen expenses. The final award amount appears to be within a reasonable range for specialized R&D, but a detailed cost breakdown would be needed for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was intended to be broad, certain sources were specifically excluded, possibly due to specialized capabilities or prior relationships. The number of bidders is not explicitly stated in the provided data, but the 'full and open' nature suggests multiple entities had the opportunity to bid. This type of competition aims to balance broad market access with specific project requirements.

Taxpayer Impact: This competition structure aims to ensure a competitive price by allowing multiple qualified vendors to submit proposals, potentially leading to better value for taxpayers compared to sole-source awards.

Public Impact

The primary beneficiaries are the Department of Defense and specifically the Air Force Research Laboratory (AFRL), which will receive advanced electronic and communication equipment. The contract supports the development of new technologies in electronics and communication, potentially enhancing military capabilities. The geographic impact is centered around Costa Mesa, California, where Irvine Sensors Corporation is located, potentially supporting local jobs and the regional tech ecosystem. The contract implies a need for specialized engineering and research talent, contributing to the high-tech workforce in the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'after exclusion of sources' clause in the competition type warrants further investigation to understand the rationale and potential impact on market access.
Cost-plus-fixed-fee contracts can sometimes lead to cost overruns if not managed tightly, requiring robust oversight.
The long contract duration (over 8 years) necessitates ongoing monitoring to ensure continued relevance and performance.
Lack of specific performance metrics or deliverables in the provided data makes it difficult to assess the R&D's ultimate success.
The specific nature of the 'electronics and communication equipment' is not detailed, making it hard to gauge the innovation or criticality.

Positive Signals

The contract was awarded through a competitive process, suggesting an effort to secure fair pricing and qualified vendors.
The award to Irvine Sensors Corporation indicates a selection based on perceived capability and suitability for the R&D task.
The contract duration suggests a significant and potentially valuable technological advancement is anticipated.
The NAICS code 541710 points to a focus on specialized research and development, aligning with advanced technological needs.
The contract is for Research, Development, Test, and Evaluation (RDTE), indicating investment in future capabilities.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on electronics and communication equipment. The North American Industry Classification System (NAICS) code 541710, 'Research and Development in the Physical, Engineering, and Life Sciences,' encompasses a broad range of scientific and technical services. The market for defense-related R&D is substantial, with significant government investment aimed at maintaining technological superiority. Comparable spending benchmarks would typically involve analyzing other DoD contracts for similar R&D efforts in electronics, considering factors like contract type, duration, and specific technological focus.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Irvine Sensors Corporation, the contractor, is not explicitly identified as a small business in the snippet. Therefore, this contract does not appear to directly benefit small businesses through a set-aside. However, the potential for subcontracting opportunities with small businesses exists, depending on the project's needs and Irvine Sensors Corporation's subcontracting plan, which is not detailed here.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense, specifically the Air Force Research Laboratory (AFRL) contracting office (DET 1 AFRL/PKD). As a Cost Plus Fixed Fee (CPFF) contract, robust financial oversight is crucial to monitor expenditures against the fixed fee and ensure compliance with the contract terms. Transparency is facilitated through contract reporting mechanisms, though the level of public detail on R&D projects can be limited due to security and proprietary concerns. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Air Force Research Laboratory (AFRL) Contracts
Department of Defense Research and Development Programs
Electronics and Communication Equipment Procurement
Applied Research Contracts
Advanced Technology Development

Risk Flags

Competition Exclusion Rationale
Cost Overrun Potential (CPFF)
Long-Term R&D Performance Monitoring
Unspecified Deliverables/Technology Scope

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.6 million to ISC8 INC.. 200408!000097!5700!GR19 !DET 1 AFRL/PKD !FA865004C7120 !A!N! !Y! ! !20040528!20060328!038058038!038058038!038058038!N!IRVINE SENSORS CORPORATION !3001 REDHILL AVE BLDG 3-10!COSTA MESA !CA!92626!16532!059!06!COSTA MESA !ORANGE !CALIFORNIA!+000001093975!N!N!000003256427!AC62!RDTE/ELECTRONICS & COMMUNICATION EQ-APPLIED RESEA !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !541710!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is ISC8 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 $10.6 million.

What is the period of performance?

Start: 2004-05-28. End: 2012-09-30.

What is the specific nature of the 'electronics and communication equipment' being researched and developed under this contract?

The provided data identifies the contract's purpose as 'RDTE/ELECTRONICS & COMMUNICATION EQ-APPLIED RESEA' and the Product Service Code (PSC) as 'A7' for 'ELECTRONICS AND COMMUNICATION EQUIP'. However, the specific type of equipment or technology being developed is not detailed. This could range from advanced sensor systems, communication modules, signal processing hardware, or other specialized electronic components. Without further documentation, such as the Statement of Work (SOW) or technical exhibits, the precise nature of the R&D remains unspecified. Understanding the specific application would be crucial for assessing its technological advancement and strategic importance to the Air Force.

How does the performance of Irvine Sensors Corporation on this contract compare to industry benchmarks for similar R&D projects?

Assessing Irvine Sensors Corporation's performance against industry benchmarks for this specific contract is challenging with the provided data. The contract duration is over 8 years (from May 2004 to September 2012, with an initial period ending March 2006 and a modification extending it). Performance metrics, milestones achieved, and final deliverables are not detailed. To compare, one would need access to performance reports, technical reviews, and potentially user feedback from the Air Force. Benchmarking would involve looking at the success rates, cost adherence, and timeliness of similar R&D efforts by other contractors in the defense electronics sector. Given the 'fair' value assessment, it suggests performance was likely adequate but perhaps not exceptional.

What were the key factors that led to the 'full and open competition after exclusion of sources' approach for this contract?

The designation 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' (CT: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES) suggests a competitive process was initiated, but certain potential bidders were not considered. This exclusion could stem from several reasons, such as the need for highly specialized proprietary technology, unique manufacturing capabilities, or specific security clearances that only a limited number of firms possessed. It might also indicate a desire to build upon a previous successful relationship or technology base where certain companies were pre-qualified. The rationale behind excluding specific sources is critical for understanding if the competition truly represented the broadest possible market or if it was tailored to a narrower set of capabilities, potentially impacting price discovery.

What is the historical spending pattern for Irvine Sensors Corporation with the Department of Defense, and how does this contract fit within it?

The provided data shows this specific contract (FA865004C7120) awarded to Irvine Sensors Corporation (ISC8 INC.) for $10,561,231. To understand historical spending, one would need to query federal procurement databases for all contracts awarded to Irvine Sensors Corporation over time. This contract, awarded in 2004 for R&D in electronics, appears to be a significant award, given its value and duration. Analyzing past contracts would reveal if Irvine Sensors Corporation is a frequent supplier to the DoD, the types of goods/services they typically provide, and the typical award values. This $10.6M contract represents a substantial investment in R&D, suggesting a strategic focus by the Air Force on developing specific electronic capabilities through this contractor during that period.

What are the potential risks associated with a Cost Plus Fixed Fee (CPFF) contract for advanced R&D, and how were they mitigated?

Cost Plus Fixed Fee (CPFF) contracts, while offering flexibility for R&D where costs can be uncertain, carry inherent risks. For the government, the primary risk is that the contractor may not be sufficiently incentivized to control costs, as the fee is fixed regardless of the final cost. This can lead to cost overruns if the contractor's initial estimates are inaccurate or if scope creep occurs. For the contractor, the risk lies in underestimating costs, which could reduce their profit margin. Mitigation strategies typically involve rigorous government oversight of expenditures, detailed cost tracking, regular progress reviews, and clearly defined contract milestones and deliverables. The 'fair' value assessment suggests that, while risks exist, the contract was likely managed to provide reasonable value, implying that oversight mechanisms were in place to control costs within the CPFF framework.

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 › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: BASIC RESEARCH

Offers Received: 22

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Address: 3001 REDHILL AVE BLDG 3-10, COSTA MESA, CA, 47

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline