DoD's $87.8M R&D Contract for Electronics & Communication Equipment Faces Oversight Concerns

Contract Overview

Contract Amount: $17,183,831 ($17.2M)

Contractor: West Virginia High Technology Consortium Foundation

Awarding Agency: Department of Defense

Start Date: 2002-12-31

End Date: 2009-11-30

Contract Duration: 2,526 days

Daily Burn Rate: $6.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: 200403!000003!5700!GV64 !ESC/DIBK !FA872704C0002 !A!N! !N! ! !20031212!20081115!878885607!878885607!878885607!N!WEST VIRGINIA HIGH TECH CONSOR!1000 TECHNOLOGY DRIVE !FAIRMONT !WV!26554!26452!049!54!FAIRMONT !MARION !W VIRGINIA!+000002278811!N!N!000019492999!AC61!RDTE/ELECTRONICS & COMMUNICATION EQ-BASIC RESEARCH!C9E!ALL OTHER SUPPLIES AND EQUIPMENT !000 !* !541710!E! !3! ! ! ! ! !99990909!B!A!N!B! !A!N!U!2!002!N!7A!Z!Y!Z! ! !N!Z!N! ! ! ! ! !A!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: FAIRMONT, MARION County, WEST VIRGINIA, 26554

State: West Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $17.2 million to WEST VIRGINIA HIGH TECHNOLOGY CONSORTIUM FOUNDATION for work described as: 200403!000003!5700!GV64 !ESC/DIBK !FA872704C0002 !A!N! !N! ! !20031212!20081115!878885607!878885607!878885607!N!WEST VIRGINIA HIGH TECH CONSOR!1000 TECHNOLOGY DRIVE !FAIRMONT !WV!26554!26452!049!54!FAIRMONT !MARI… Key points: 1. The contract awarded to West Virginia High Technology Consortium Foundation for $87.8M focuses on basic research in electronics and communication equipment. 2. Awarded under full and open competition, the contract's pricing structure (Cost Plus Fixed Fee) warrants scrutiny for potential cost overruns. 3. The significant duration of the contract (2526 days) raises questions about project management and adaptability to evolving technological needs. 4. While the sector is R&D, the specific focus on 'basic research' suggests a longer-term, potentially higher-risk investment for taxpayers.

Value Assessment

Rating: questionable

The Cost Plus Fixed Fee (CPFF) pricing structure can incentivize contractors to increase costs to maximize profit, especially in long-term R&D projects. Without clear performance metrics and robust oversight, this can lead to inefficient spending.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, which is generally positive for price discovery. However, the CPFF structure may still allow for cost escalation despite competitive bidding.

Taxpayer Impact: The substantial value and long duration of this contract mean taxpayers are exposed to potential cost inefficiencies inherent in CPFF contracts for basic research.

Public Impact

Taxpayers are funding basic research with a long-term outlook, the benefits of which may not be immediately apparent or guaranteed. The contract's duration suggests a significant commitment of resources over many years, potentially diverting funds from other critical areas. The focus on electronics and communication equipment R&D could lead to advancements that benefit national security or technological innovation.

Waste & Efficiency Indicators

Waste Risk Score: 68 / 10

Warning Flags

Cost Plus Fixed Fee pricing structure
Long contract duration (2526 days)
Basic research focus with uncertain immediate ROI

Positive Signals

Awarded under full and open competition
Focus on potentially critical R&D area

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on electronics and communication equipment. Benchmarks for R&D contracts vary widely based on scope and duration, but the $87.8M value and 7-year term are substantial.

Small Business Impact

The awardee is the West Virginia High Technology Consortium Foundation, which may or may not be considered a small business depending on its specific structure and revenue. Further investigation into its size classification is needed.

Oversight & Accountability

The contract's long duration and CPFF structure necessitate strong oversight to ensure funds are used efficiently and effectively. Regular reviews of progress, cost reports, and performance metrics are crucial for accountability.

Related Government Programs

Research and Development in the Physical, Engineering, and Life Sciences
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Potential for cost overruns due to CPFF structure
Risk of technological obsolescence over the contract's long duration
Uncertainty of tangible outcomes from basic research
Need for robust oversight to ensure accountability

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.2 million to WEST VIRGINIA HIGH TECHNOLOGY CONSORTIUM FOUNDATION. 200403!000003!5700!GV64 !ESC/DIBK !FA872704C0002 !A!N! !N! ! !20031212!20081115!878885607!878885607!878885607!N!WEST VIRGINIA HIGH TECH CONSOR!1000 TECHNOLOGY DRIVE !FAIRMONT !WV!26554!26452!049!54!FAIRMONT !MARION !W VIRGINIA!+000002278811!N!N!000019492999!AC61!RDTE/ELECTRONICS & COMMUNICATION EQ-BASIC RESEARCH!C9E!ALL OTHER SUPPLIES AND EQUIPMENT !000 !* !541710!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is WEST VIRGINIA HIGH TECHNOLOGY CONSORTIUM FOUNDATION.

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 $17.2 million.

What is the period of performance?

Start: 2002-12-31. End: 2009-11-30.

What specific performance metrics and milestones were established to ensure the value derived from this basic research contract?

The contract likely includes milestones related to research progress and deliverables, but the nature of basic research makes defining concrete, measurable outcomes challenging. The CPFF structure implies that the government is paying for the effort and resources expended, with a fixed fee for the contractor's profit. Detailed reporting on research activities, findings, and expenditures would be expected to demonstrate progress and justify costs.

How does the risk of technological obsolescence or shifting research priorities impact the long-term effectiveness of this contract?

The 7-year duration of this basic research contract inherently carries a risk of technological obsolescence or shifting priorities. The rapidly evolving fields of electronics and communication mean that research initiated today might be outdated by the time it is completed. The government's oversight must include mechanisms to adapt the research scope or terminate the contract if it becomes irrelevant.

What is the anticipated return on investment for taxpayers given the 'basic research' nature of this contract?

The return on investment for basic research is typically long-term and indirect, focusing on advancing scientific knowledge and technological capabilities that can lead to future innovations, economic growth, or national security benefits. Unlike applied research or development, immediate commercial or operational applications are not the primary goal. Taxpayer impact is measured by the potential for future breakthroughs and the foundational knowledge created.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1000 TECHNOLOGY DRIVE, FAIRMONT, WV, 02

Business Categories: Category Business, Nonprofit Organization, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline