DoD's $315M EPASS contract to Applied Research Solutions, Inc. for R&D support awarded via full and open competition

Contract Overview

Contract Amount: $315,402,724 ($315.4M)

Contractor: Applied Research Solutions, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-04-18

End Date: 2024-10-17

Contract Duration: 548 days

Daily Burn Rate: $575.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 12

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: FOR ACQUISITION OF ENGINEERING, PROFESSIONAL & ADMINISTRATIVE SUPPORT SERVICES (EPASS) IN SUPPORT OF DIRECTORATE HN.

Place of Performance

Location: BEAVERCREEK, MONTGOMERY County, OHIO, 45440

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $315.4 million to APPLIED RESEARCH SOLUTIONS, INC. for work described as: FOR ACQUISITION OF ENGINEERING, PROFESSIONAL & ADMINISTRATIVE SUPPORT SERVICES (EPASS) IN SUPPORT OF DIRECTORATE HN. Key points: 1. Contract awarded for engineering, professional, and administrative support services. 2. Significant value suggests a critical need for specialized R&D support. 3. Full and open competition indicates a broad market search. 4. Contract duration of over 1.5 years allows for sustained project execution. 5. The North American Industry Classification System (NAICS) code 541712 points to R&D in physical, engineering, and life sciences. 6. The contract type is Cost Plus Fixed Fee, which can incentivize cost control while ensuring contractor effort. 7. The award was a Delivery Order, suggesting it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle or a pre-existing contract.

Value Assessment

Rating: good

Benchmarking the value of this $315 million contract requires understanding the specific engineering, professional, and administrative support services provided. Given the R&D focus under NAICS 541712, costs are likely influenced by highly specialized labor and research materials. The Cost Plus Fixed Fee (CPFF) structure means the government pays allowable costs plus a fixed fee, which can be advantageous for R&D where scope is uncertain, but requires careful oversight to manage costs. Without specific performance metrics or comparable contract data, a definitive value-for-money assessment is challenging, but the competitive award suggests a reasonable price was sought.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while the competition was broad, certain sources were excluded for specific reasons, possibly related to prior performance or specialized capabilities. The presence of 12 bidders suggests a healthy level of competition for this type of specialized support. This level of competition is generally favorable for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: A competitive award process helps ensure that taxpayer dollars are used efficiently by driving down prices and encouraging innovative solutions from a wide range of potential contractors.

Public Impact

The primary beneficiaries are the Directorate HN within the Department of the Air Force, receiving essential support for their research and development initiatives. Services delivered include engineering, professional, and administrative support crucial for advancing physical, engineering, and life sciences research. The geographic impact is primarily within Ohio, where the contractor Applied Research Solutions, Inc. is located, but the R&D outcomes could have national implications. Workforce implications include the employment of skilled engineers, researchers, and administrative staff by the contractor to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Exclusion of Sources' clause in a full and open competition warrants further investigation to understand the rationale and ensure it did not unduly limit competition.
Cost Plus Fixed Fee contracts can lead to cost overruns if not managed diligently, requiring robust government oversight of allowable costs.
The specific nature of R&D support can be complex, making it challenging to define clear performance metrics and assess contractor efficiency.

Positive Signals

Awarded under full and open competition with 12 bidders, indicating a robust and competitive process.
The contract supports critical research and development activities for the Department of Defense, aligning with national security objectives.
The fixed fee component of the CPFF contract provides a degree of cost certainty for the government once the fee is established.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically NAICS code 541712, which covers R&D in the Physical, Engineering, and Life Sciences (except Biotechnology). This is a highly specialized area often involving significant government investment due to its strategic importance. The market for such services is characterized by a mix of large defense contractors and specialized R&D firms. Spending in this sector is driven by the need for technological advancement and innovation, particularly in defense applications. Comparable spending benchmarks would depend on the specific R&D focus, but multi-million dollar contracts for specialized support are common.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this specific contract award. This suggests the primary focus was on securing the most capable large business or specialized R&D firm through full and open competition. There is no explicit information on subcontracting plans for small businesses within this award notice, which could be a missed opportunity for small business engagement in supporting critical R&D efforts.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract would typically involve the Department of the Air Force's contracting officer and administrative contracting officer. They are responsible for monitoring costs, ensuring compliance with contract terms, and verifying the allowability of expenses. The fixed fee component provides some cost control, but diligent oversight of the 'cost' portion is crucial. Transparency is facilitated through contract award databases, but detailed performance reports and cost breakdowns may not be publicly available.

Related Government Programs

Engineering Services
Professional Services
Administrative Support
Research and Development Contracts
Department of Defense Contracts
Air Force Contracts

Risk Flags

Potential for cost overruns due to CPFF structure.
Risk of scope creep in R&D projects.
Need for robust government oversight of contractor performance and costs.
Rationale for 'Exclusion of Sources' requires clarification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $315.4 million to APPLIED RESEARCH SOLUTIONS, INC.. FOR ACQUISITION OF ENGINEERING, PROFESSIONAL & ADMINISTRATIVE SUPPORT SERVICES (EPASS) IN SUPPORT OF DIRECTORATE HN.

Who is the contractor on this award?

The obligated recipient is APPLIED RESEARCH SOLUTIONS, 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 $315.4 million.

What is the period of performance?

Start: 2023-04-18. End: 2024-10-17.

What is the specific nature of the engineering, professional, and administrative support services being procured under this contract?

The contract, identified as EPASS (Engineering, Professional & Administrative Support Services), is for support to Directorate HN. While the specific tasks are not detailed in the provided data, the NAICS code 541712 indicates a focus on Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology). This suggests the services likely encompass areas such as scientific research support, technical analysis, project management for R&D initiatives, engineering design and consultation, data analysis, and administrative functions necessary to facilitate these R&D activities. The 'Exclusion of Sources' aspect might imply that the support required is highly specialized, necessitating specific expertise or clearances that only a limited number of firms could provide, even within a broad competitive framework.

How does the Cost Plus Fixed Fee (CPFF) contract type influence cost control and contractor incentives for this R&D support?

The Cost Plus Fixed Fee (CPFF) contract type means the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. For R&D, where the scope and final costs can be uncertain, CPFF can be advantageous as it allows the government to pursue necessary work without pre-defining exact costs. It incentivizes the contractor to perform the work diligently to earn the fixed fee. However, it places a significant burden on the government to meticulously monitor and audit incurred costs to ensure they are allowable and reasonable. Unlike fixed-price contracts, there's less direct incentive for the contractor to minimize costs beyond what's necessary to stay within the 'allowable cost' parameters, making robust government oversight critical to prevent cost escalation.

What does the 'Full and Open Competition After Exclusion of Sources' designation imply for the bidding process and potential contractor pool?

This designation indicates that the solicitation was initially intended for full and open competition, meaning all responsible sources were permitted to submit offers. However, 'after exclusion of sources' suggests that certain potential offerors were subsequently excluded from the competition. The reasons for exclusion are not specified but could include factors like failure to meet minimum qualifications, past performance issues, or specific security requirements. While the initial intent was broad competition, the exclusion narrows the field. The fact that 12 bidders still submitted offers implies that despite exclusions, a substantial number of capable firms remained interested and competitive, which is generally a positive sign for price discovery and achieving fair market value.

What are the potential risks associated with a $315 million contract for R&D support, and how might they be mitigated?

A significant risk with a contract of this magnitude, especially in R&D, is the potential for cost overruns due to the inherent uncertainties in research. Scope creep, where the project's objectives expand beyond the original agreement, is another risk. Contractor performance issues, such as delays or failure to meet technical requirements, also pose a threat. Mitigation strategies include rigorous government oversight of costs and progress, clearly defined milestones and deliverables, strong contract management, and potentially incorporating performance-based incentives within the CPFF structure. Regular communication and a collaborative approach between the government and the contractor can also help address challenges proactively.

How does this contract align with the Department of the Air Force's broader R&D objectives and spending patterns?

This $315 million contract for EPASS services directly supports the Department of the Air Force's (DAF) Directorate HN, indicating a significant investment in advancing specific R&D capabilities within the physical, engineering, or life sciences. The DAF, like other branches of the DoD, relies heavily on external R&D support to maintain technological superiority. Spending patterns in this area are typically characterized by large, long-term contracts awarded through competitive processes to specialized firms. This contract likely represents a key component of the DAF's strategy to innovate and develop next-generation technologies, aligning with broader defense objectives for modernization and readiness.

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) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 12

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 51 PLUM ST STE 240, BEAVERCREEK, OH, 45440

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

Financial Breakdown

Contract Ceiling: $1,017,803,628

Exercised Options: $1,017,803,628

Current Obligation: $315,402,724

Actual Outlays: $5,466

Subaward Activity

Number of Subawards: 522

Total Subaward Amount: $192,977,747

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q14OADS742

IDV Type: IDC

Timeline