DoD's $210M R&D contract to Veridian Systems Division, Inc. awarded in 2004 for 4 years

Contract Overview

Contract Amount: $21,002,469 ($21.0M)

Contractor: Veridian Systems Division, Inc

Awarding Agency: Department of Defense

Start Date: 2004-06-14

End Date: 2008-10-30

Contract Duration: 1,599 days

Daily Burn Rate: $13.1K/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

Place of Performance

Location: YPSILANTI, WASHTENAW County, MICHIGAN, 48197

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $21.0 million to VERIDIAN SYSTEMS DIVISION, INC for work described as: Key points: 1. Contract awarded under full and open competition, suggesting a robust bidding process. 2. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not managed carefully. 3. Research and Development in Physical, Engineering, and Life Sciences is a critical but often unpredictable sector. 4. The duration of nearly 4 years indicates a significant, long-term project. 5. The contract was awarded by the Department of the Air Force, a major DoD component. 6. The North American Industry Classification System (NAICS) code 541710 points to a focus on scientific research.

Value Assessment

Rating: fair

Benchmarking the value of this $210 million contract is challenging without specific deliverables or performance metrics. Cost Plus Fixed Fee contracts inherently carry a risk of exceeding initial estimates, as the contractor is reimbursed for allowable costs plus a fixed fee. Comparing this to similar R&D contracts in physical, engineering, and life sciences would require detailed analysis of the scope of work and technological advancements sought. The absence of specific performance data makes a definitive value assessment difficult.

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 intended to be open, certain sources were excluded. This suggests a potentially complex procurement process. The number of bidders is not specified, but the 'full and open' designation implies multiple interested parties were considered. The level of competition, even with exclusions, likely contributed to price discovery, though the specific impact on the final price is not detailed.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value, even with source exclusions. However, the specific reasons for excluding sources warrant scrutiny to ensure fairness and prevent undue limitations on competition.

Public Impact

The primary beneficiaries are likely the Department of Defense and the Air Force, receiving advancements in physical, engineering, and life sciences research. The contract supports innovation and technological development within the defense sector. Geographic impact is concentrated around the contractor's facilities, likely in Michigan. The contract supports a specialized workforce in scientific research and development.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize higher spending to increase the base for the fixed fee.
The exclusion of sources in a full and open competition raises questions about the breadth of competition and potential fairness concerns.
Lack of specific performance metrics makes it difficult to assess the true value and effectiveness of the R&D investment.
The duration of the contract (nearly 4 years) increases the risk of technological obsolescence or shifting research priorities.

Positive Signals

Awarded under full and open competition, indicating a structured procurement process.
The contract supports critical R&D in physical, engineering, and life sciences, vital for national security.
The fixed fee component provides some cost certainty for the contractor's profit margin.

Sector Analysis

This contract falls within the Research and Development sector, specifically NAICS code 541710, which covers scientific research and development services in physical, engineering, and life sciences. This is a critical area for defense modernization. Comparable spending benchmarks would involve analyzing other DoD R&D contracts for similar scientific disciplines and contract types. The overall R&D spending by the DoD is substantial, reflecting its commitment to maintaining a technological edge.

Small Business Impact

The contract indicates that small business participation was not a primary set-aside consideration (ss: false, sb: false). This suggests the contract was likely awarded to a larger entity capable of undertaking complex R&D. There is no explicit information on subcontracting plans for small businesses, which could represent a missed opportunity for small business engagement in this significant R&D effort.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures would be tied to the Cost Plus Fixed Fee structure, requiring detailed cost reporting and auditing. Transparency is facilitated by contract databases, but the specifics of R&D progress and spending may be subject to security or proprietary restrictions. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse.

Related Government Programs

Department of Defense Research and Development Programs
Air Force Science and Technology Investments
Physical Sciences Research Contracts
Engineering Development Contracts
Life Sciences Research Initiatives

Risk Flags

Potential for cost overruns due to CPFF structure.
Risk of research obsolescence given the contract duration.
Uncertainty regarding the specific scope and deliverables of the R&D.
Potential limitations on competition due to source exclusions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.0 million to VERIDIAN SYSTEMS DIVISION, INC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is VERIDIAN SYSTEMS DIVISION, 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 $21.0 million.

What is the period of performance?

Start: 2004-06-14. End: 2008-10-30.

What was the specific nature of the research and development conducted under this contract?

The provided data indicates the contract (awarded to VERIDIAN SYSTEMS DIVISION, INC by the Department of the Air Force) falls under NAICS code 541710, 'Research and Development in the Physical, Engineering, and Life Sciences.' However, the specific research topics, objectives, or technological advancements pursued are not detailed in the summary data. Such information would typically be found in the contract's Statement of Work (SOW) or technical exhibits. Without access to these documents, it's impossible to ascertain the precise nature of the R&D, whether it focused on materials science, aerospace engineering, biotechnology, or another specialized field within these broad categories. The 'MI' (Michigan) designation for the state suggests the primary performance location.

How does the Cost Plus Fixed Fee (CPFF) structure typically impact R&D contract costs and contractor incentives?

The Cost Plus Fixed Fee (CPFF) contract type reimburses the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. In R&D contexts, CPFF is often used when the scope of work is uncertain or subject to change, making fixed-price contracts impractical. While the fixed fee provides some profit certainty for the contractor, the incentive structure can be complex. Contractors may be incentivized to incur costs to ensure project completion, as their fee is fixed regardless of the total cost. However, the 'allowable costs' clause requires careful monitoring by the government to prevent unnecessary expenditures. This structure can lead to cost growth if not rigorously managed, potentially exceeding initial budget expectations, but it also allows for flexibility in exploring innovative research avenues.

What are the potential risks associated with a nearly 4-year R&D contract in the physical, engineering, and life sciences sector?

A contract duration of approximately 4 years (1599 days) for R&D in physical, engineering, and life sciences carries several inherent risks. Firstly, technological advancements can occur rapidly, potentially rendering the research outcomes obsolete or less impactful by the contract's end. Secondly, research priorities within the funding agency (in this case, the Department of the Air Force) might shift due to evolving geopolitical landscapes, budget constraints, or new scientific discoveries, making the original research goals less relevant. Thirdly, the long duration increases the likelihood of personnel turnover within the contractor's team, potentially disrupting knowledge continuity. Finally, unforeseen scientific challenges or experimental failures can significantly delay progress, impacting the overall timeline and potentially increasing costs if not managed effectively.

What does 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' imply about the procurement process?

The term 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' suggests a procurement process that initially aimed for broad competition but subsequently identified and excluded specific potential offerors. This exclusion could be based on various factors, such as national security concerns, proprietary information limitations, or specific technical requirements that only a subset of potential contractors could meet. While the intent is still to achieve the benefits of competition, the exclusion implies that the pool of bidders was narrowed from the outset. The justification for these exclusions would be critical to understanding the true level of competition and ensuring fairness and transparency in the award process. It implies a more complex justification was needed compared to standard full and open competition.

How does the absence of small business set-aside provisions impact small business participation in this contract?

The data indicates that this contract did not include specific small business set-aside provisions (ss: false, sb: false). This means the contract was not specifically reserved for small businesses, and competition was open to all eligible sources, including large businesses. Consequently, small businesses would have had to compete directly with larger, potentially more established companies. While large businesses may have advantages in resources and infrastructure, the absence of set-asides does not preclude small business participation if they possess the necessary capabilities and offer competitive proposals. However, it does suggest that the primary focus of this procurement was not on maximizing small business involvement through dedicated set-aside goals.

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 › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: BASIC RESEARCH

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 3300 PLYMOUTH ROAD, ANN ARBOR, VA

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline