DoD's $264.6M EPASS contract to Applied Research Solutions, Inc. for engineering support

Contract Overview

Contract Amount: $264,579,326 ($264.6M)

Contractor: Applied Research Solutions, Inc.

Awarding Agency: Department of Defense

Start Date: 2025-02-01

End Date: 2027-03-28

Contract Duration: 785 days

Daily Burn Rate: $337.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

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: HANSCOM AFB, MIDDLESEX County, MASSACHUSETTS, 01731

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $264.6 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. Duration of 785 days suggests a medium-term engagement. 3. Cost Plus Fixed Fee pricing structure requires careful monitoring of costs. 4. The contract is a delivery order under a larger IDIQ, indicating potential for future task orders. 5. The North American Industry Classification System (NAICS) code 541712 points to R&D in physical, engineering, and life sciences. 6. The contract's value is substantial, requiring robust oversight. 7. The awardee, Applied Research Solutions, Inc., will provide critical support to the Directorate HN. 8. The contract is set to conclude in March 2027.

Value Assessment

Rating: fair

The contract value of $264.6 million over approximately 2.6 years represents a significant investment. Without specific benchmarks for similar engineering, professional, and administrative support services (EPASS) contracts within the Department of Defense or for Directorate HN, a precise value-for-money assessment is challenging. The Cost Plus Fixed Fee (CPFF) pricing structure, while allowing for flexibility, can sometimes lead to higher costs if not managed diligently, as contractor profit is fixed regardless of actual costs incurred. Benchmarking against industry standards for R&D support services would be necessary for a more definitive evaluation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'. This indicates that while the initial solicitation was open, certain sources were excluded, potentially limiting the competitive pool. The presence of two bids suggests some level of competition, but the exclusion of sources raises questions about the breadth of the competition. Further details on the reasons for exclusion and the number of initially solicited entities would be needed to fully assess the competitive landscape and its impact on price discovery.

Taxpayer Impact: The limited competition may have resulted in a higher price for taxpayers than if a broader range of qualified vendors had been able to bid. It is crucial to ensure that the exclusion of sources was justified and did not unduly restrict market access.

Public Impact

The primary beneficiaries are the Department of the Air Force and Directorate HN, receiving essential engineering, professional, and administrative support. The services delivered are critical for the operational and developmental functions of the Directorate. The geographic impact is likely concentrated within the areas where Directorate HN operates, potentially including research facilities and administrative offices. Workforce implications may include the direct employment of personnel by Applied Research Solutions, Inc. and potential indirect impacts on the broader R&D support services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) pricing requires diligent oversight to prevent cost overruns.
Limited competition after exclusion of sources may impact price competitiveness.
The contract is a delivery order, suggesting it's part of a larger Indefinite Delivery/Indefinite Quantity (IDIQ) contract, which could have its own set of risks.
The specific nature of 'EPASS' services can be broad, requiring clear performance metrics and deliverables.
The exclusion of sources needs clear justification to ensure fairness and optimal value.
The duration of the contract (785 days) necessitates sustained performance monitoring.

Positive Signals

Awarded to a single contractor, potentially allowing for focused expertise and streamlined communication.
The contract is a delivery order under a pre-competed IDIQ, implying a level of pre-qualification and established terms.
The contract supports critical R&D functions, indicating alignment with strategic government objectives.
The fixed fee component of CPFF provides some cost predictability for the government.
The contract duration allows for the development of institutional knowledge and long-term project continuity.

Sector Analysis

The contract falls within the Research and Development in the Physical, Engineering, and Life Sciences sector, specifically NAICS code 541712. This sector is characterized by innovation and scientific advancement, often involving complex projects requiring specialized expertise. The market size for such services within the federal government is substantial, with significant spending allocated to R&D across various agencies. This contract represents a portion of the Department of Defense's investment in maintaining its technological edge and supporting its research initiatives.

Small Business Impact

The data indicates that small business participation is not a primary focus for this specific contract, as the 'ss' (small business set-aside) and 'sb' (small business) flags are false. This suggests that the contract was not specifically set aside for small businesses. Therefore, the primary impact on the small business ecosystem would likely be indirect, through potential subcontracting opportunities if Applied Research Solutions, Inc. chooses to engage small businesses for specialized tasks. However, without explicit subcontracting plans or goals detailed in the award, the direct impact on small businesses is uncertain.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Air Force, specifically within the Directorate HN. As a Cost Plus Fixed Fee contract, rigorous financial oversight is paramount to ensure that costs are reasonable and allocable. Performance monitoring will be crucial to ensure that Applied Research Solutions, Inc. meets the defined objectives and deliverables. Transparency will depend on the agency's reporting practices for delivery orders under IDIQ contracts. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise.

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.
Limited competition may impact price competitiveness.
Need for clear performance metrics and deliverables.
Justification for exclusion of sources requires scrutiny.
Sustained performance monitoring over the contract duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $264.6 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 $264.6 million.

What is the period of performance?

Start: 2025-02-01. End: 2027-03-28.

What is the track record of Applied Research Solutions, Inc. in performing similar engineering, professional, and administrative support services for the Department of Defense?

Assessing the track record of Applied Research Solutions, Inc. requires a review of their past performance on federal contracts, particularly those with the Department of Defense and the Air Force. This would involve examining contract databases (like FPDS or SAM.gov) for previous awards, performance evaluations (Contractor Performance Assessment Reporting System - CPARS), and any documented issues or successes. Key areas to investigate would include their ability to deliver on time, within budget, and to the required quality standards for similar service types. Understanding their experience with Cost Plus Fixed Fee (CPFF) contracts and their specific technical capabilities relevant to Directorate HN's mission would provide crucial context for evaluating their suitability for this $264.6 million award.

How does the estimated cost per day for this contract compare to industry benchmarks for similar R&D support services?

To benchmark the cost per day, we first calculate the approximate daily rate by dividing the total contract value ($264,579,326.27) by the contract duration in days (785). This yields an approximate daily rate of $337,000. Comparing this to industry benchmarks for R&D support services requires access to proprietary cost data or specialized market research reports. However, generally, daily rates for specialized engineering and professional services can range significantly based on the complexity of the work, required clearances, and the specific expertise needed. Without specific benchmark data for NAICS code 541712 services within the DoD, it is difficult to definitively state if this rate is high or low. A detailed analysis would involve comparing this rate against similar contracts awarded by the DoD or other federal agencies for comparable services, considering factors like labor categories, overhead, and profit margins.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) pricing structure for this contract?

The primary risk associated with the Cost Plus Fixed Fee (CPFF) pricing structure for this contract is the potential for cost overruns, despite the fixed fee component. While the fee is fixed, the contractor is reimbursed for all allowable costs incurred. If costs escalate beyond initial projections due to inefficiencies, scope creep not properly managed, or unforeseen challenges, the total contract value could increase significantly if contract modifications are approved. This necessitates robust government oversight to scrutinize all claimed costs, ensure they are reasonable, allocable, and directly related to contract performance. The government bears the risk of higher-than-expected costs, while the contractor is assured a predetermined profit margin, which can sometimes disincentivize aggressive cost control.

What is the historical spending pattern for engineering, professional, and administrative support services (EPASS) by the Department of the Air Force?

Historical spending on Engineering, Professional & Administrative Support Services (EPASS) by the Department of the Air Force (DAF) is substantial and multifaceted, reflecting the broad range of support required for its complex operations and advanced technological development. The DAF consistently procures these services across various directorates and commands to support functions ranging from acquisition and logistics to research, development, testing, and evaluation. Spending patterns are often influenced by strategic priorities, modernization efforts, and specific program requirements. Analyzing past spending data, typically available through sources like the Federal Procurement Data System (FPDS), would reveal trends in contract types (e.g., IDIQ, cost-reimbursement, fixed-price), dominant service categories, key contractors, and overall investment levels in support services. This contract, valued at $264.6 million, aligns with the DAF's ongoing commitment to leveraging external expertise for critical functions.

What are the implications of 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' on the overall value and innovation for this contract?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' clause presents a nuanced situation regarding value and innovation. On one hand, it signifies an intent to compete broadly, which can drive competitive pricing and encourage innovative solutions from the participating vendors. However, the 'exclusion of sources' aspect introduces a potential limitation. If the exclusion criteria are overly restrictive or not clearly justified, it could inadvertently narrow the field of highly capable competitors, potentially leading to less aggressive pricing or a reduced range of innovative approaches. The ultimate impact on value and innovation hinges on the justification for the exclusions and the robustness of the competition among the remaining eligible bidders. A thorough review of the exclusion rationale is key to understanding if it served a legitimate purpose or hindered optimal market participation.

How does the NAICS code 541712 (Research and Development in the Physical, Engineering, and Life Sciences) typically align with the services described for EPASS?

The North American Industry Classification System (NAICS) code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology),' aligns well with the description of 'Engineering, Professional & Administrative Support Services (EPASS)' for the Directorate HN. This NAICS code encompasses establishments primarily engaged in conducting research and experimental development in the natural sciences, engineering, and social sciences. Services under this code often involve scientific research, engineering design, analysis, testing, and technical support necessary for innovation and technological advancement. Therefore, EPASS services provided under this contract likely include technical expertise, analytical support, project management, and administrative functions that directly contribute to the R&D mission of the Directorate, facilitating the advancement of physical and engineering sciences.

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: 2

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: $1,471,549,096

Exercised Options: $566,984,267

Current Obligation: $264,579,326

Subaward Activity

Number of Subawards: 23

Total Subaward Amount: $42,626,591

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