DoD's $9.3M R&D contract to Azimuth Corporation for technical operations shows fair value with 2 bidders

Contract Overview

Contract Amount: $9,299,762 ($9.3M)

Contractor: Azimuth Corporation

Awarding Agency: Department of Defense

Start Date: 2022-08-22

End Date: 2028-08-26

Contract Duration: 2,196 days

Daily Burn Rate: $4.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: TECHNICAL OPERATIONS VI

Place of Performance

Location: BEAVERCREEK, GREENE County, OHIO, 45324

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $9.3 million to AZIMUTH CORPORATION for work described as: TECHNICAL OPERATIONS VI Key points: 1. Contract awarded for research and development in physical, engineering, and life sciences. 2. Competition was full and open, indicating a competitive bidding process. 3. The contract type is Cost Plus Fixed Fee, which can incentivize cost control. 4. Performance period spans over 5 years, suggesting a long-term need. 5. The award was a delivery order under a larger contract vehicle. 6. The contractor, Azimuth Corporation, is based in Ohio.

Value Assessment

Rating: fair

The contract's value of $9.3 million over approximately 5 years appears reasonable for specialized technical operations research and development. Benchmarking against similar R&D contracts in the physical sciences is challenging without more specific service details. However, the fixed fee component suggests a degree of cost predictability for the government. The number of bids received (2) is on the lower side for full and open competition, which might slightly temper the assurance of optimal pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. Two bids were received, which is a moderate level of competition. While more bidders could potentially drive prices lower, two bidders still provide a basis for price comparison and selection. The government's ability to select the best value offer is supported by this competitive process.

Taxpayer Impact: The full and open competition, despite receiving two bids, provides a reasonable assurance that taxpayer funds are being used efficiently by allowing multiple companies to vie for the contract, potentially leading to better pricing and innovation.

Public Impact

The Department of the Air Force benefits from specialized technical operations support. This contract supports research and development activities crucial for national defense. The geographic impact is primarily within Ohio, where Azimuth Corporation is located. The contract likely supports a specialized workforce in R&D and technical operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) may not have yielded the lowest possible price.
Cost Plus Fixed Fee contracts can sometimes lead to cost overruns if not managed tightly.
The specific nature of 'technical operations' is broad and could encompass a wide range of activities, making precise value assessment difficult.

Positive Signals

Awarded under full and open competition, ensuring a fair process.
The fixed fee component provides some cost certainty for the government.
The contract duration allows for sustained research and development efforts.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. This is a critical area for defense innovation. The market for such specialized R&D services is competitive, with numerous firms capable of undertaking complex technical operations. The contract value of $9.3 million is moderate for this sector, representing a focused investment in specific technological advancements.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information on subcontracting plans. Given the nature of specialized R&D, it's possible that larger, established firms like Azimuth Corporation are more likely to secure such contracts. Further analysis would be needed to determine if small businesses have opportunities within this contract's scope or related efforts.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Department of the Air Force. Accountability measures are inherent in the Cost Plus Fixed Fee structure, requiring detailed reporting and justification of costs. Transparency is facilitated through contract databases, though specific performance metrics and detailed cost breakdowns may not always be publicly available.

Related Government Programs

Department of Defense Research and Development Contracts
Air Force Science and Technology Programs
Technical Services Contracts
Cost Plus Fixed Fee Contracts

Risk Flags

Limited competition (2 bidders) could impact price optimization.
Cost Plus Fixed Fee contracts require diligent oversight to manage costs.
The broad nature of 'technical operations' may obscure specific performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $9.3 million to AZIMUTH CORPORATION. TECHNICAL OPERATIONS VI

Who is the contractor on this award?

The obligated recipient is AZIMUTH 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 $9.3 million.

What is the period of performance?

Start: 2022-08-22. End: 2028-08-26.

What is Azimuth Corporation's track record with the Department of Defense, particularly on similar R&D contracts?

Azimuth Corporation has a history of performing work for the Department of Defense. While specific details on their track record for similar R&D contracts require deeper database analysis, their ability to secure this $9.3 million contract suggests they have met the necessary qualifications and past performance requirements. Further investigation into their past performance ratings, any past issues, and the types of R&D projects they have successfully completed for the DoD would provide a more comprehensive understanding of their capabilities and reliability in this domain.

How does the pricing structure (Cost Plus Fixed Fee) compare to other R&D contracts of similar scope awarded by the Air Force?

Cost Plus Fixed Fee (CPFF) is a common contract type for R&D where the scope is not fully defined, allowing flexibility while providing the contractor with a fixed fee for their efforts. Compared to other Air Force R&D contracts, CPFF is frequently used. The 'fairness' of the fee depends on industry standards and the complexity of the work. Without specific benchmarks for the 'technical operations' domain, it's difficult to definitively state if this fee is high or low. However, the government aims to negotiate a fee that is reasonable compensation for the contractor's risk and effort, balanced against the potential for cost savings if the contractor manages expenses efficiently.

What are the primary risks associated with this Cost Plus Fixed Fee contract for technical operations R&D?

The primary risks associated with this CPFF contract include potential cost overruns if the contractor's estimated costs are inaccurate or if unforeseen technical challenges arise, increasing the direct costs. There's also a risk that the contractor might not be sufficiently incentivized to control costs beyond the fixed fee, potentially leading to less efficient resource utilization. Furthermore, the inherent uncertainty in R&D means the project's objectives might shift, requiring contract modifications. Effective government oversight is crucial to mitigate these risks by closely monitoring expenditures, progress, and adherence to the SOW.

How effective is the competition level (2 bidders) in ensuring value for money for this specific R&D requirement?

A competition level of two bidders for a full and open solicitation represents a moderate level of competition. While more bidders generally lead to better price discovery and potentially lower costs, two bidders still provide a basis for comparison and negotiation. The government can leverage the competing proposals to assess technical approach and price. The effectiveness in ensuring value for money depends on how well the government evaluated the proposals and negotiated the final terms. If the two bidders were highly capable and the evaluation criteria were robust, good value can still be achieved, though the potential for an even better outcome with more competition exists.

What is the historical spending trend for 'Technical Operations' R&D within the Department of the Air Force?

Analyzing historical spending trends for 'Technical Operations' R&D within the Department of the Air Force requires access to detailed historical contract data. This specific contract, valued at $9.3 million, represents a single award. To understand trends, one would need to aggregate spending across multiple contracts categorized under 'technical operations' and the relevant NAICS codes (like 541715) over several fiscal years. This would reveal whether spending in this area is increasing, decreasing, or remaining stable, and identify key contractors and agencies involved. Without that broader dataset, this single contract provides limited insight into overall spending patterns.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 2970 PRESIDENTIAL DR STE 200, BEAVERCREEK, OH, 45324

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

Financial Breakdown

Contract Ceiling: $17,775,018

Exercised Options: $17,775,018

Current Obligation: $9,299,762

Actual Outlays: $310,000

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $3,541,607

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA865022D5803

IDV Type: IDC

Timeline