DoD's $25.4M R&D contract to Jacobs Technology Inc. lacked competition, raising value concerns

Contract Overview

Contract Amount: $25,388,338 ($25.4M)

Contractor: Jacobs Technology Inc.

Awarding Agency: Department of Defense

Start Date: 2013-05-14

End Date: 2018-05-03

Contract Duration: 1,815 days

Daily Burn Rate: $14.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: IGF::CT::IGF ETASS INTERIM CONTRACT

Place of Performance

Location: HANSCOM AFB, MIDDLESEX County, MASSACHUSETTS, 01731

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $25.4 million to JACOBS TECHNOLOGY INC. for work described as: IGF::CT::IGF ETASS INTERIM CONTRACT Key points: 1. The contract was awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The cost-plus-fixed-fee structure can incentivize higher spending, especially without competitive pressure. 3. The duration of the contract (over 1800 days) suggests a long-term need, making the lack of competition more significant. 4. Research and Development in Physical, Engineering, and Life Sciences is a critical sector, requiring careful oversight. 5. The absence of small business participation is noted, with no set-aside or subcontracting reported. 6. The contract's value, while substantial, needs benchmarking against similar R&D efforts to assess true value for money.

Value Assessment

Rating: questionable

Benchmarking the value of this $25.4 million contract is challenging due to its sole-source nature and the specific R&D focus. Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value. The cost-plus-fixed-fee (CPFF) award type, while common for R&D, can lead to higher overall costs if not managed tightly, especially when competition is absent. Comparing this to similar R&D contracts within the Department of Defense or other agencies would require detailed analysis of scope, deliverables, and contractor performance history.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the unique capabilities or resources required for the specific research and development task. However, the lack of competition means there was no opportunity for price negotiation based on multiple offers, potentially leading to a higher price than if it had been competed.

Taxpayer Impact: Taxpayers may have paid a premium for this contract due to the absence of competitive bidding. Without competing offers, the government had limited leverage to negotiate the lowest possible price for the services rendered.

Public Impact

The primary beneficiary is the Department of Defense, which receives specialized research and development services. The contract supports advancements in physical, engineering, and life sciences, potentially leading to new technologies or improved existing ones. The geographic impact is primarily within the United States, where the research and development activities are conducted. Workforce implications include employment for specialized researchers and technical staff at Jacobs Technology Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Cost-plus-fixed-fee contract type can incentivize higher spending without strong oversight.
Lack of transparency in the justification for sole-source award.
Long contract duration without competition raises questions about initial planning and market analysis.
No indication of small business participation or subcontracting opportunities.

Positive Signals

Contract supports critical Research and Development for the Department of Defense.
Jacobs Technology Inc. is a known entity in the technology and engineering sector.
The contract has a defined scope within physical, engineering, and life sciences R&D.
Fixed fee component provides some cost certainty compared to pure cost-plus contracts.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences (NAICS 541712). This is a critical area for defense innovation. The market for R&D services is diverse, with many firms capable of performing such work. However, specialized defense R&D often involves unique requirements. Comparable spending benchmarks for similar R&D efforts within the DoD would typically be found in contract databases, but the sole-source nature here makes direct comparison difficult without knowing the specific technical requirements.

Small Business Impact

This contract does not appear to have included any small business set-aside provisions, nor is there any indication of subcontracting to small businesses. The award to a large contractor like Jacobs Technology Inc. suggests a focus on established capabilities. This lack of small business involvement means potential opportunities for smaller, innovative firms in this R&D space were not realized through this specific procurement, potentially impacting the broader small business ecosystem in defense contracting.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officer and the relevant Department of the Air Force program office. As a sole-source award, the justification and approval process would have been subject to specific regulations. Transparency regarding the rationale for the sole-source award and detailed performance metrics is crucial for accountability. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Research and Development Contracts
Cost-Plus-Fixed-Fee Contracts
Sole-Source Procurements
Engineering and Scientific Services Contracts

Risk Flags

Sole-source award lacks competition.
Cost-plus-fixed-fee structure may lead to cost overruns.
Long contract duration without competition.
No small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.4 million to JACOBS TECHNOLOGY INC.. IGF::CT::IGF ETASS INTERIM CONTRACT

Who is the contractor on this award?

The obligated recipient is JACOBS TECHNOLOGY 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 $25.4 million.

What is the period of performance?

Start: 2013-05-14. End: 2018-05-03.

What was the specific justification for awarding this R&D contract on a sole-source basis?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source is available or when the contract is a follow-on to a previously competed contract where only one source can meet the requirements. For this contract, the justification would likely detail unique technical capabilities, proprietary data, or urgent needs that precluded a competitive process. Without this documentation, it's impossible to fully assess the necessity of the sole-source approach.

How does the cost-plus-fixed-fee (CPFF) structure compare to other R&D contract types in terms of risk and potential cost overruns?

The Cost-Plus-Fixed-Fee (CPFF) structure is common for R&D contracts where the scope is not fully defined at the outset. It reimburses the contractor for allowable costs plus a fixed fee representing profit. This structure shifts some cost risk to the government, as the final cost is not known upfront. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility for evolving R&D requirements but can lead to higher costs if not managed diligently. The fixed fee provides the contractor with an incentive to control costs to maximize their profit margin relative to the fee, but the overall cost is still variable. Without robust oversight and clear performance metrics, CPFF contracts can be susceptible to cost overruns.

What is the typical duration for R&D contracts of this nature, and how does this contract's duration compare?

The duration of R&D contracts can vary significantly depending on the complexity and scope of the research. Contracts for fundamental research might be shorter, while those involving development and testing of complex systems can extend for several years. This contract had a duration of 1815 days, which is approximately five years. This is a substantial period, suggesting a long-term research objective. While not exceptionally long for certain types of advanced R&D, its length, combined with the sole-source award, warrants scrutiny to ensure continued justification and effective progress monitoring throughout its term.

What performance metrics or milestones were likely established for this contract to ensure accountability?

While specific performance metrics are not detailed in the provided data, R&D contracts, especially CPFF types, typically include milestones tied to research progress, technical reviews, prototype development, testing phases, and final reports. The fixed fee is often earned upon achievement of these defined milestones. Effective oversight would involve regular reviews of technical progress against these milestones, evaluation of deliverables, and assessment of the contractor's adherence to the research plan. The contracting officer's representative (COR) would play a key role in monitoring performance and ensuring the government receives the intended value from the research investment.

Are there any publicly available reports or assessments regarding the outcomes or impact of this specific R&D contract?

Information regarding the specific outcomes or impact of individual R&D contracts, especially those conducted under sole-source awards for defense purposes, is often not readily available in the public domain. This is due to the sensitive nature of defense research and potential proprietary information. While the Department of Defense may have internal assessments, public reports detailing the tangible results or technological advancements stemming directly from this $25.4 million contract are unlikely to be found unless the research led to a publicly releasable technology or was part of a broader program with public reporting requirements.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Jacobs Engineering Group Inc (UEI: 074103508)

Address: 55 OLD BEDFORD RD STE 201, LINCOLN, MA, 01773

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

Financial Breakdown

Contract Ceiling: $29,777,662

Exercised Options: $29,777,662

Current Obligation: $25,388,338

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline