DoD's $56M R&D contract with Jacobs Technology Inc. awarded via sole-source procurement

Contract Overview

Contract Amount: $56,120,508 ($56.1M)

Contractor: Jacobs Technology Inc.

Awarding Agency: Department of Defense

Start Date: 2014-05-14

End Date: 2015-10-31

Contract Duration: 535 days

Daily Burn Rate: $104.9K/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 1.75 ENGINEERING AND ADVISORY ASSISTANCE SERVICES - HN

Place of Performance

Location: SEVERN, ANNE ARUNDEL County, MARYLAND, 21144

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $56.1 million to JACOBS TECHNOLOGY INC. for work described as: IGF::CT::IGF ETASS 1.75 ENGINEERING AND ADVISORY ASSISTANCE SERVICES - HN Key points: 1. Contract awarded on a sole-source basis, raising questions about potential overpayment and lack of competitive pressure. 2. Significant portion of contract value allocated to engineering and advisory services, suggesting a focus on specialized expertise. 3. Contract duration of 535 days indicates a medium-term project, requiring sustained oversight. 4. The 'Research and Development in the Physical, Engineering, and Life Sciences' NAICS code points to a high-value, specialized service area. 5. Awarded by the Department of the Air Force, indicating a focus on aerospace and defense-related research. 6. The contract type 'COST PLUS FIXED FEE' can lead to cost overruns if not managed tightly.

Value Assessment

Rating: questionable

Benchmarking the value of this $56.1 million contract is challenging without detailed task orders and deliverables. However, the sole-source award and cost-plus-fixed-fee structure present inherent risks for value for money. The absence of competition means there was no market pressure to drive down costs. A comparison to similar R&D contracts in the physical and engineering sciences would be necessary to assess if the pricing is reasonable, but such data is not readily available in this summary.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of the Air Force did not conduct a competitive procurement process. This typically occurs when a specific contractor possesses unique capabilities or when circumstances prevent full and open competition. The lack of bidders means there was no opportunity for price discovery through a competitive bidding process, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium for these services due to the absence of competition. Without competing offers, it's difficult to ascertain if the government secured the best possible price and value.

Public Impact

The primary beneficiaries are likely the Department of the Air Force and potentially broader Department of Defense initiatives requiring advanced engineering and advisory support. Services delivered include research and development in physical, engineering, and life sciences, contributing to technological advancements. The geographic impact is primarily within the United States, specifically where the contractor's facilities and the Air Force's research centers are located. Workforce implications include employment for highly skilled engineers, scientists, and technical advisors at Jacobs Technology Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs.
Cost-plus-fixed-fee contract type can incentivize cost overruns if not rigorously monitored.
Lack of transparency in the sole-source justification makes it difficult to assess necessity.
Limited public information on specific deliverables hinders performance assessment.
Potential for contractor lock-in due to specialized nature of R&D services.

Positive Signals

Award to a known entity, Jacobs Technology Inc., suggests a level of established capability.
Contract focuses on R&D, which is critical for future technological superiority.
The fixed fee component provides some cost certainty compared to pure cost-plus contracts.
The contract duration allows for focused effort on complex research objectives.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically NAICS code 541712. This sector is characterized by high innovation, specialized expertise, and significant government investment, particularly in defense and aerospace. The market for R&D services is competitive, but specific niches can be dominated by a few key players. Government spending in this area is crucial for maintaining technological advantage. Comparable spending benchmarks would typically involve analyzing other R&D contracts awarded by the DoD or other agencies for similar scientific and engineering services.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, there is no explicit mention of subcontracting goals for small businesses. This suggests that the primary focus was on securing specialized R&D capabilities from a large, established contractor, with potentially limited direct benefit or opportunities for the small business ecosystem in this specific award.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the Department of the Air Force's contracting officers and program managers. Given the sole-source nature and cost-plus-fixed-fee structure, rigorous oversight of expenditures, progress, and adherence to the statement of work is crucial. Transparency is limited due to the sole-source award, but contract performance reviews and audits by the Inspector General could provide accountability. The specific jurisdiction of the IG would depend on the nature of any potential issues arising from the contract.

Related Government Programs

Department of Defense Research and Development Programs
Air Force Science and Technology Investments
Engineering and Technical Services Contracts
Advanced Technology Development Contracts

Risk Flags

Sole Source Award
Cost Plus Fixed Fee Contract Type
Lack of Competition
Potential for Cost Overruns
Limited Transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $56.1 million to JACOBS TECHNOLOGY INC.. IGF::CT::IGF ETASS 1.75 ENGINEERING AND ADVISORY ASSISTANCE SERVICES - HN

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 $56.1 million.

What is the period of performance?

Start: 2014-05-14. End: 2015-10-31.

What specific R&D projects or areas did this contract support for the Department of the Air Force?

The provided data indicates the contract was for 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)' under NAICS code 541712. However, it does not specify the exact R&D projects or scientific domains. Typically, such contracts support advanced research in areas like materials science, aerospace engineering, propulsion systems, sensor technology, or computational modeling relevant to Air Force missions. Detailed project information would be found in the contract's statement of work and subsequent task orders, which are not included in this summary. Without this, it's impossible to pinpoint the precise R&D focus.

Can the value of this contract be considered competitive given its sole-source nature?

No, a sole-source contract, by definition, cannot be considered competitive in terms of price discovery. Competition drives down prices as contractors vie for the award. When a contract is awarded without competition, the government relies on negotiation and cost analysis to ensure a fair price, but the absence of competing bids means there is no market validation of that price. Therefore, while the price might be deemed 'fair and reasonable' by the contracting officer based on available data, it is unlikely to be as cost-effective as it would have been under a competitive procurement. The $56.1 million value is thus not benchmarked against competitive offers.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D services?

The primary risk with a CPFF contract, especially for R&D, is the potential for cost overruns. While the 'fixed fee' provides the contractor with a guaranteed profit margin, the 'cost plus' element means the government reimburses the contractor's allowable costs. If the R&D effort proves more complex or expensive than initially estimated, the total cost to the government can escalate significantly. This structure can also reduce the contractor's incentive to control costs rigorously, as their fee is fixed regardless of the final cost. Effective oversight, detailed cost tracking, and strong program management are essential to mitigate these risks.

How does the 'Research and Development in the Physical, Engineering, and Life Sciences' category typically compare to other federal spending categories in terms of value and duration?

R&D in physical, engineering, and life sciences often represents high-value, specialized spending due to the need for expert personnel, advanced equipment, and often lengthy development cycles. Contracts in this category can range from short-term feasibility studies to multi-year, multi-million dollar programs. Compared to simpler service contracts (e.g., janitorial, basic IT support), R&D contracts tend to have higher per-unit costs due to the intellectual capital involved. The duration of 535 days (approx. 1.5 years) for this specific contract is moderate for R&D, suggesting a focused project phase rather than a foundational, long-term research effort.

What is the significance of awarding this contract to Jacobs Technology Inc. given their track record?

Jacobs Technology Inc. is a well-established global provider of technical, professional, and construction services, including significant work in aerospace and defense. Awarding this R&D contract to them suggests the Air Force likely viewed Jacobs as possessing the necessary specialized expertise, facilities, and past performance relevant to the specific research and advisory tasks. While a sole-source award bypasses a direct comparison of their capabilities against competitors for this specific contract, their general track record in similar domains likely played a role in the decision to award without full competition. Their experience could imply a reduced risk of technical failure or delays.

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

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: $73,054,675

Exercised Options: $72,965,563

Current Obligation: $56,120,508

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline