DoD's $70.4M EPASS contract for R&D support awarded to Applied Research Solutions, Inc

Contract Overview

Contract Amount: $70,416,489 ($70.4M)

Contractor: Applied Research Solutions, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-09-25

End Date: 2025-01-31

Contract Duration: 128 days

Daily Burn Rate: $550.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: PROCUREMENT OF ENGINEERING, PROFESSIONAL, AND ADMINISTRATIVE SUPPORT SERVICES (EPASS) FOR HN DIRECTORATE.

Place of Performance

Location: BEAVERCREEK, MONTGOMERY County, OHIO, 45440

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $70.4 million to APPLIED RESEARCH SOLUTIONS, INC. for work described as: PROCUREMENT OF ENGINEERING, PROFESSIONAL, AND ADMINISTRATIVE SUPPORT SERVICES (EPASS) FOR HN DIRECTORATE. Key points: 1. Contract awarded via full and open competition after exclusion of sources, indicating a potentially competitive process. 2. The contract type is Cost Plus Fixed Fee (CPFF), which can incentivize cost control but requires careful oversight. 3. The period of performance is relatively short at 128 days, suggesting a focused scope of work. 4. The NAICS code 541712 points to R&D in physical, engineering, and life sciences, a critical sector for innovation. 5. The contract value of $70.4M is substantial, requiring robust performance monitoring. 6. The awardee, Applied Research Solutions, Inc., is a key player in this specialized R&D support domain. 7. The contract is a Delivery Order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: good

The contract value of $70.4M for approximately 4 months of support appears reasonable given the specialized nature of R&D services. Benchmarking against similar contracts for engineering, professional, and administrative support in the defense sector would provide a more precise value-for-money assessment. The CPFF structure necessitates close monitoring of costs to ensure efficiency and prevent overruns, but it allows for flexibility in research environments.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This suggests that while competition was sought, certain sources may have been excluded based on specific criteria, potentially limiting the breadth of competition. The number of bidders is not specified, but this award type implies a more targeted approach than unrestricted full and open competition.

Taxpayer Impact: The limited competition may result in less aggressive pricing compared to a fully open bid process, potentially impacting taxpayer value if not managed carefully.

Public Impact

The primary beneficiaries are the Department of the Air Force and the HN Directorate, receiving essential engineering, professional, and administrative support for R&D initiatives. The services delivered are critical for advancing research and development in physical, engineering, and life sciences. The geographic impact is primarily within Ohio, where the contractor is located, but the R&D outcomes could have national implications. The contract supports specialized technical and administrative roles, potentially impacting the workforce in the R&D support services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to the Cost Plus Fixed Fee (CPFF) contract type if not rigorously managed.
Limited competition could lead to suboptimal pricing if not adequately benchmarked.
Short performance period might indicate a need for rapid execution, increasing performance risk.

Positive Signals

Awarded to a company with apparent expertise in R&D support services.
The contract is part of a structured procurement process (Delivery Order).
Focus on R&D aligns with strategic national interests.

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 sector is vital for technological advancement and national security. Spending in this area is often characterized by long-term investment, specialized expertise, and a need for flexible contracting vehicles to adapt to evolving research needs. Comparable spending benchmarks would typically involve analyzing other R&D support service contracts within the Department of Defense and other federal agencies.

Small Business Impact

The data indicates this contract was not set aside for small businesses (SS: false, SB: false). Therefore, there are no direct subcontracting implications for small businesses mandated by a set-aside. However, the prime contractor may still engage small businesses as subcontractors, depending on their own subcontracting plans and the nature of the services required.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Air Force contracting and program management offices. As a Cost Plus Fixed Fee (CPFF) contract, rigorous financial oversight is crucial to monitor costs against the fixed fee and ensure efficient resource utilization. Transparency will depend on the agency's reporting practices and the availability of contract details. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Engineering and Technical Services Contracts
Research and Development Support Services
Department of Defense R&D Spending
Air Force Professional Services Contracts
Cost Plus Fixed Fee Contracts

Risk Flags

Cost Overrun Risk (CPFF)
Limited Competition Impact on Price
Technical Performance Monitoring Complexity (R&D)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $70.4 million to APPLIED RESEARCH SOLUTIONS, INC.. PROCUREMENT OF ENGINEERING, PROFESSIONAL, AND ADMINISTRATIVE SUPPORT SERVICES (EPASS) FOR HN DIRECTORATE.

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 $70.4 million.

What is the period of performance?

Start: 2024-09-25. End: 2025-01-31.

What is the track record of Applied Research Solutions, Inc. with federal contracts, particularly within the Department of Defense?

Applied Research Solutions, Inc. (ARS) has a history of performing federal contracts, primarily within the defense sector. Analyzing their past performance data, including contract values, types, and customer satisfaction ratings, is crucial. For this specific contract, understanding ARS's experience with similar R&D support services, especially those involving engineering, professional, and administrative functions for directorates like HN, would provide insight into their capability. A review of their contract history might reveal patterns in contract types (e.g., CPFF), performance periods, and any past performance issues or commendations. This context helps assess the likelihood of successful execution and adherence to cost and schedule.

How does the estimated value of this contract compare to similar R&D support service contracts awarded by the Air Force or DoD?

The $70.4 million value for a 128-day period of performance (approximately 4.2 months) for Engineering, Professional, and Administrative Support Services (EPASS) is substantial. To benchmark this, one would compare it to other contracts for similar services (NAICS 541712) awarded by the Department of the Air Force or DoD. Key comparison points include the contract type (CPFF), the specific services required, and the duration. If similar contracts for comparable R&D support services typically range from $10-20 million for a similar duration, then this $70.4 million award might warrant further scrutiny regarding its value proposition. Conversely, if the scope is significantly broader or more complex than typical contracts, the value could be justified. Analyzing the number of bidders and the final negotiated price against initial estimates would also inform this comparison.

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

The primary risks with a Cost Plus Fixed Fee (CPFF) contract, especially in R&D, revolve around cost control and contractor incentive. While the fixed fee provides the contractor with a defined profit margin, the 'cost plus' component means the government reimburses allowable costs. This structure can incentivize contractors to incur higher costs to ensure all allowable expenses are covered, potentially leading to cost overruns if not meticulously monitored. For R&D, where costs can be unpredictable, this risk is amplified. The government must have robust oversight mechanisms to scrutinize incurred costs, ensure they are reasonable and allocable, and prevent scope creep that inflates expenses without commensurate value. The contractor's efficiency in managing resources directly impacts the total cost to the government.

What does the 'Full and Open Competition After Exclusion of Sources' award method imply for the government's acquisition strategy and potential savings?

The 'Full and Open Competition After Exclusion of Sources' (FOUC ES) award method signifies a deliberate acquisition strategy where the government initially intended broad competition but subsequently excluded specific sources based on defined criteria. This could be due to reasons like national security, specific technical requirements, or prior performance issues with certain entities. While it aims for competition, the exclusion inherently limits the pool of potential bidders compared to unrestricted full and open competition. This limitation might reduce the competitive pressure on pricing, potentially leading to higher costs for the government than if all eligible sources were allowed to bid. The justification for excluding sources is critical to understanding if this approach was necessary and if it still yielded adequate price discovery and value for taxpayers.

How does the specialized nature of NAICS code 541712 (R&D in Physical, Engineering, and Life Sciences) influence the contract's performance expectations and oversight?

The specialized nature of NAICS code 541712 dictates that this contract supports highly technical and often cutting-edge research and development activities. This implies that performance expectations will focus on achieving specific research milestones, generating innovative solutions, and adhering to scientific rigor. Oversight must be conducted by personnel with deep technical expertise in the relevant physical, engineering, or life sciences fields. They need to assess the quality of research, the validity of findings, and the progress towards R&D objectives, which can be more complex than overseeing standard service contracts. The CPFF structure further necessitates that oversight includes a thorough review of research-related expenditures to ensure they align with the project's goals and are reasonable within the scientific context.

What are the potential implications of this contract being a Delivery Order under a larger IDIQ contract?

If this $70.4M award is a Delivery Order (DO) under an Indefinite-Delivery/Indefinite-Quantity (IDIQ) contract, it signifies that the underlying IDIQ vehicle itself underwent a competitive process. The DO represents a specific task order issued against that pre-established IDIQ. This approach allows for flexibility and streamlined ordering of services over time. The implications include: 1) The initial IDIQ competition likely established baseline pricing and terms. 2) This DO's value is a portion of the overall IDIQ ceiling. 3) The competition for this specific DO might have been limited to IDIQ holders, or potentially competed among them, depending on the IDIQ's structure. 4) Oversight focuses on ensuring the DO aligns with the scope defined in the IDIQ and that the pricing is fair and reasonable within that framework.

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: 1

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: $113,776,121

Exercised Options: $113,776,121

Current Obligation: $70,416,489

Subaward Activity

Number of Subawards: 19

Total Subaward Amount: $44,947,529

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