DoD's $133.6M R&D contract with Jacobs Technology Inc. awarded without competition

Contract Overview

Contract Amount: $133,645,710 ($133.6M)

Contractor: Jacobs Technology Inc.

Awarding Agency: Department of Defense

Start Date: 2014-05-14

End Date: 2016-04-30

Contract Duration: 717 days

Daily Burn Rate: $186.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: R&D

Official Description: IGF::CT::IGF ETASS 1.75 ENGINEERING AND ADVISORY ASSITANCE SERVICES- HB

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03062

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $133.6 million to JACOBS TECHNOLOGY INC. for work described as: IGF::CT::IGF ETASS 1.75 ENGINEERING AND ADVISORY ASSITANCE SERVICES- HB Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can incentivize cost overruns. 2. The contract was not competed, raising questions about potential overpayment and lack of market pressure. 3. Jacobs Technology Inc. has a significant presence in government contracting, suggesting established capabilities. 4. The R&D focus indicates investment in future capabilities, but performance metrics are crucial for value assessment. 5. The contract duration of 717 days (approx. 2 years) is moderate for R&D services. 6. The contract was awarded to a single entity, limiting opportunities for small business participation as prime contractors.

Value Assessment

Rating: questionable

The contract's value of $133.6 million for R&D services is substantial. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar contracts. The cost-plus-fixed-fee (CPFF) structure, while common for R&D, carries inherent risks of cost escalation if not rigorously managed. The absence of competition means taxpayers may not have received the best possible value, as there was no pressure from competing firms to offer lower prices or more efficient solutions. Further analysis of the fixed fee and the contractor's performance is needed to fully assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed among multiple potential offerors. This approach is typically used when only one contractor possesses the unique capabilities or resources required for the work, or in cases of urgent need. The lack of competition means that the government did not benefit from the price discovery mechanisms that occur in a competitive environment. This can lead to higher prices than might be achieved through open bidding.

Taxpayer Impact: The absence of competition for this $133.6 million contract means taxpayers may have paid a premium. Without bids from other firms, there's no assurance that the selected contractor offered the most cost-effective solution available in the market.

Public Impact

The primary beneficiaries are the Department of Defense, which receives advanced research and development services. The contract supports the development of new technologies and capabilities relevant to national security. The geographic impact is primarily centered around the contractor's facilities and any research sites involved in New Hampshire. The contract likely supports a workforce of scientists, engineers, and technical professionals employed by Jacobs Technology Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Cost-plus-fixed-fee contract type can incentivize higher spending if not closely monitored.
Lack of transparency in the sole-source justification process could mask inefficiencies.
Performance metrics and deliverables are critical to ensure value for the significant investment.
Limited visibility into the specific R&D projects funded by this contract.

Positive Signals

Jacobs Technology Inc. is an established contractor with experience in R&D services.
The contract supports critical research and development for the Department of Defense.
The fixed-fee component provides some level of cost predictability, assuming the scope is well-defined.
The contract is managed by the Defense Contract Management Agency, suggesting oversight is in place.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. This sector is characterized by innovation, long development cycles, and often high upfront investment. Government spending in R&D is crucial for maintaining technological superiority and addressing future challenges. Comparable spending benchmarks are difficult to establish without knowing the specific R&D area, but large-scale R&D contracts are common within the Department of Defense.

Small Business Impact

As this contract was awarded on a sole-source basis and the small business (SB) flag is false, there is no indication of a small business set-aside. Furthermore, the prime contractor, Jacobs Technology Inc., is a large business. This suggests limited direct opportunities for small businesses as prime contractors on this specific award. Subcontracting opportunities may exist, but their extent and accessibility to small businesses would depend on the prime contractor's subcontracting plan and the nature of the R&D work.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The cost-plus-fixed-fee structure necessitates rigorous financial oversight to monitor expenditures and ensure the fixed fee is justified. Transparency regarding the specific R&D projects and their outcomes would be important for public accountability, though R&D contracts often have proprietary or national security considerations that limit public disclosure.

Related Government Programs

Department of Defense Research and Development Programs
Engineering and Technical Services Contracts
Advanced Technology Development Contracts
Federal R&D Spending

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $133.6 million to JACOBS TECHNOLOGY INC.. IGF::CT::IGF ETASS 1.75 ENGINEERING AND ADVISORY ASSITANCE SERVICES- HB

Who is the contractor on this award?

The obligated recipient is JACOBS TECHNOLOGY INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $133.6 million.

What is the period of performance?

Start: 2014-05-14. End: 2016-04-30.

What specific research and development activities were undertaken under this contract?

The contract, awarded to Jacobs Technology Inc., was for Engineering and Advisory Assistance Services (ETASS 1.75). While the specific details of the R&D projects are not publicly disclosed due to the nature of defense contracts and potential proprietary information, the NAICS code 541712 indicates 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)'. This suggests work in areas such as materials science, advanced manufacturing, systems engineering, or other technical fields critical to defense capabilities. The contract's cost-plus-fixed-fee structure implies that the scope may have been broad or evolving, requiring flexibility in research direction.

How does the $133.6 million contract value compare to similar R&D contracts within the DoD?

Comparing the $133.6 million value requires context on the specific R&D domain. The Department of Defense awards numerous R&D contracts annually, ranging from millions to billions of dollars. Contracts for 'Research and Development in the Physical, Engineering, and Life Sciences' can vary significantly based on the maturity of the technology, the scale of the research, and the duration. Without knowing the precise technological area, it's challenging to provide a direct benchmark. However, $133.6 million represents a significant investment, suggesting a substantial research effort or a long-term development project. The lack of competition makes direct value comparison difficult, as a competitive process would typically yield a more market-driven price point.

What are the key risks associated with a sole-source, cost-plus-fixed-fee R&D contract?

The primary risks associated with this contract structure are twofold. Firstly, the sole-source award eliminates the benefit of competition, potentially leading to higher costs for the government as there is no market pressure to offer the lowest price. Secondly, the cost-plus-fixed-fee (CPFF) structure, while providing flexibility for R&D, can incentivize the contractor to incur higher costs to increase the absolute profit (as the fee is fixed, but applied to total costs). Effective oversight, stringent cost controls, and clear performance metrics are essential to mitigate these risks and ensure the government receives good value for its investment. Without robust management, there's a risk of cost overruns and suboptimal resource allocation.

What is the track record of Jacobs Technology Inc. in performing similar government R&D contracts?

Jacobs Technology Inc. is a well-established government contractor with extensive experience across various sectors, including R&D and engineering services. They have a history of performing complex technical work for federal agencies, including the Department of Defense. While specific performance details for individual contracts are often not publicly detailed, their continued success in securing large government contracts suggests a generally positive track record. However, the performance on this specific $133.6 million contract would need to be assessed through government performance evaluations (e.g., CPARS) if available, to understand the quality of deliverables and adherence to schedule and budget.

How has federal spending in the R&D sector (NAICS 541712) trended in recent years?

Federal spending in the R&D sector, particularly under NAICS code 541712 (Research and Development in the Physical, Engineering, and Life Sciences), has generally seen consistent investment, especially from agencies like the Department of Defense, NASA, and the Department of Energy. While specific year-over-year trends can fluctuate based on budget appropriations, national priorities, and emerging technological needs, there is a sustained commitment to funding scientific and engineering research. The DoD, in particular, allocates significant portions of its budget to R&D to maintain a technological edge. Factors like geopolitical tensions and the drive for innovation in areas like AI, cybersecurity, and advanced materials can influence spending levels within this category.

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 NO FEE (S)

Evaluated Preference: NONE

Contractor Details

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

Address: 10 TARA BLVD STE 200, NASHUA, NH, 03062

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

Financial Breakdown

Contract Ceiling: $192,896,609

Exercised Options: $169,797,837

Current Obligation: $133,645,710

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline