DoD's $6.1M DEFCON contract awarded to Applied Research Associates, Inc. for R&D services

Contract Overview

Contract Amount: $6,117,000 ($6.1M)

Contractor: Applied Research Associates, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-07-12

End Date: 2028-07-11

Contract Duration: 1,826 days

Daily Burn Rate: $3.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: DIGITAL ENGINEERING FRAMEWORKS FOR CONVERGENCE (DEFCON)

Place of Performance

Location: ALBUQUERQUE, BERNALILLO County, NEW MEXICO, 87110

State: New Mexico Government Spending

Plain-Language Summary

Department of Defense obligated $6.1 million to APPLIED RESEARCH ASSOCIATES, INC. for work described as: DIGITAL ENGINEERING FRAMEWORKS FOR CONVERGENCE (DEFCON) Key points: 1. Contract focuses on research and development in physical, engineering, and life sciences. 2. Awarded under full and open competition, suggesting a broad market search. 3. The contract type is Cost Plus Fixed Fee, which can incentivize cost control. 4. Duration of 1826 days indicates a long-term research and development effort. 5. The North American Industry Classification System (NAICS) code 541715 points to specialized R&D services. 6. The contract is a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle or framework.

Value Assessment

Rating: fair

Benchmarking the value of this specific $6.1 million R&D contract is challenging without more detailed cost breakdowns and performance metrics. Applied Research Associates, Inc. is a known entity in defense contracting, but the Cost Plus Fixed Fee structure requires careful oversight to ensure costs remain reasonable and the fixed fee is justified by the scope of work. Comparing this to similar R&D efforts within the Air Force or DoD would provide better context on pricing and value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that the Department of the Air Force sought proposals from all responsible sources. The specific number of bidders is not provided, but this method generally fosters a competitive environment, potentially leading to better pricing and innovative solutions. The open competition suggests that the agency did not identify any specific barriers to entry or proprietary limitations that would restrict the field of potential offerors.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it maximizes the pool of potential contractors, increasing the likelihood of receiving competitive bids and thus potentially lower prices.

Public Impact

The primary beneficiaries are likely the Department of Defense and the Air Force, who will receive advanced research and development services. The services delivered will contribute to advancements in physical, engineering, and life sciences relevant to defense applications. The geographic impact is primarily associated with the contractor's location in New Mexico, but the research outcomes could have national defense implications. Workforce implications include employment opportunities for scientists, engineers, and support staff at Applied Research Associates, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts require diligent oversight to prevent cost overruns and ensure the fixed fee remains appropriate for the effort.
The specific R&D focus requires clear performance metrics to assess the value and success of the research outcomes.
As a delivery order, the underlying IDIQ or framework's terms and competition level should also be considered for a complete risk assessment.

Positive Signals

Awarded under full and open competition, suggesting a robust and fair bidding process.
Applied Research Associates, Inc. is an established contractor with experience in R&D, potentially indicating a lower execution risk.
The long contract duration allows for sustained focus on complex research objectives.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The R&D market within the defense sector is substantial, with significant government investment aimed at maintaining technological superiority. Comparable spending benchmarks would involve analyzing other DoD contracts for similar scientific research services, considering factors like contract type, duration, and the specific scientific disciplines involved. The NAICS code 541715 indicates a focus on highly specialized scientific inquiry.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a specific set-aside requirement. However, as a large prime contract, Applied Research Associates, Inc. may choose to subcontract portions of the work to small businesses, contributing to the small business ecosystem. Further analysis would require examining the contractor's subcontracting plan, if applicable.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Air Force, responsible for monitoring performance, costs, and adherence to the contract terms. As a Cost Plus Fixed Fee contract, rigorous financial oversight is crucial to ensure that costs are allowable, allocable, and reasonable. Transparency will depend on the agency's reporting practices and the public availability of contract details. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Research and Development Programs
Air Force Science and Technology Investments
Applied Scientific Research Contracts
Engineering Services Contracts
Life Sciences Research Contracts

Risk Flags

Cost Plus Fixed Fee contract requires diligent oversight to manage costs.
R&D inherently carries uncertainty in outcomes.
Need for clear performance metrics to assess R&D success.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $6.1 million to APPLIED RESEARCH ASSOCIATES, INC.. DIGITAL ENGINEERING FRAMEWORKS FOR CONVERGENCE (DEFCON)

Who is the contractor on this award?

The obligated recipient is APPLIED RESEARCH ASSOCIATES, 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 $6.1 million.

What is the period of performance?

Start: 2023-07-12. End: 2028-07-11.

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

Applied Research Associates, Inc. (ARA) has a significant history of contracting with the Department of Defense (DoD) across various agencies and research areas. Their portfolio often includes work in areas such as aerospace, materials science, and engineering research, aligning with the scope of this DEFCON contract. Analyzing ARA's past performance ratings, any past performance issues or awards, and the types of R&D projects they have successfully completed for the DoD would provide crucial context. Specifically, examining their experience with Cost Plus Fixed Fee contracts and their ability to manage R&D budgets effectively would be key indicators of their suitability and potential value for this $6.1 million award.

How does the $6.1 million value compare to similar R&D contracts awarded by the Air Force for physical, engineering, and life sciences research?

The $6.1 million value for this specific R&D contract requires comparison against a benchmark of similar contracts awarded by the Air Force or DoD. Without access to a comprehensive database of all R&D contracts, a precise comparison is difficult. However, R&D contracts can vary widely in cost based on complexity, duration, and the specific scientific domain. A $6.1 million award over approximately five years suggests a moderately sized project. To assess value, one would look for contracts with similar NAICS codes (541715), contract types (CPFF), and durations. If similar projects have cost significantly more or less, it could indicate potential overpricing or exceptional value, respectively. The 'fair' rating suggests it falls within an expected range but warrants scrutiny.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D, and how are they mitigated in this case?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is that the contractor may have less incentive to control costs compared to fixed-price contracts, as costs are reimbursed. The 'fixed fee' component provides some incentive, but the risk of cost overruns still exists, potentially leading to higher overall expenditure for the government. For R&D, another risk is the inherent uncertainty in research outcomes; the project may not yield the desired results despite the expenditure. Mitigation strategies typically involve robust government oversight, detailed cost accounting standards, clear definition of allowable costs, and performance metrics tied to milestones. The Air Force's diligence in monitoring expenditures and progress against the defined research objectives is critical to mitigating these risks for this $6.1 million DEFCON contract.

What does the 'delivery order' designation imply about the broader contract vehicle and potential future spending?

The designation 'delivery order' indicates that this $6.1 million award is not a standalone contract but rather a task order issued under a larger, pre-existing contract vehicle, likely an Indefinite Delivery/Indefinite Quantity (IDIQ) contract or a similar framework agreement. This implies that Applied Research Associates, Inc. was previously selected through a competitive process to be a potential provider of services under that larger vehicle. The existence of a delivery order suggests that the government anticipates needing these types of R&D services over a period and has established a mechanism to procure them efficiently. Future spending could occur through additional delivery orders against the same vehicle, up to its maximum value, or through separate contract actions.

How does the NAICS code 541715 (Research and Development in the Physical, Engineering, and Life Sciences) inform the nature and potential impact of this contract?

The NAICS code 541715 specifically categorizes the contract as pertaining to 'Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)'. This classification provides critical insight into the contract's focus: it involves scientific inquiry and experimentation aimed at advancing knowledge and developing new technologies or processes within these broad scientific fields. The potential impact is significant, as advancements in these areas are often foundational for developing new defense capabilities, improving existing systems, or addressing complex operational challenges faced by the Air Force and DoD. The specific nature of the R&D—whether it's basic research, applied research, or experimental development—will determine the proximity to tangible technological application.

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: BASIC RESEARCH

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 4300 SAN MATEO BLVD NE STE A-220, ALBUQUERQUE, NM, 87110

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

Financial Breakdown

Contract Ceiling: $9,955,301

Exercised Options: $9,730,077

Current Obligation: $6,117,000

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $3,904,615

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA865120D0041

IDV Type: IDC

Timeline