DoD's $14.7M R&D contract with OptiComp Corporation shows long duration and cost-plus structure

Contract Overview

Contract Amount: $14,735,306 ($14.7M)

Contractor: Opticomp Corporation

Awarding Agency: Department of Defense

Start Date: 2005-07-27

End Date: 2011-03-31

Contract Duration: 2,073 days

Daily Burn Rate: $7.1K/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: ZEPHYR COVE, DOUGLAS County, NEVADA, 89448

State: Nevada Government Spending

Plain-Language Summary

Department of Defense obligated $14.7 million to OPTICOMP CORPORATION for work described as: Key points: 1. Contract awarded under full and open competition after exclusion of sources, suggesting a specific justification for source selection. 2. The cost-plus fixed fee (CPFF) structure indicates potential for cost overruns, requiring close monitoring. 3. A contract duration of over 2000 days (nearly 6 years) suggests a complex, long-term research and development effort. 4. The absence of small business set-asides or subcontracting plans warrants further investigation into small business participation. 5. Performance occurred primarily in Nevada, potentially indicating a localized economic impact. 6. The contract's focus on R&D in physical, engineering, and life sciences aligns with strategic defense objectives.

Value Assessment

Rating: fair

The contract's value of $14.7 million over nearly six years is difficult to benchmark without specific deliverables or comparable R&D projects. The CPFF pricing structure inherently carries higher risk for the government compared to fixed-price contracts, as costs can escalate. While the total award amount is moderate, the extended performance period necessitates careful scrutiny of cost efficiency and value realization throughout its lifecycle.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This specific procurement method implies that while competition was sought, certain sources were excluded, possibly due to specialized capabilities or prior relationships. The exact reasons for exclusion are not detailed, but it suggests a departure from standard full and open competition, potentially limiting the breadth of bidder engagement and impacting price discovery.

Taxpayer Impact: This limited competition approach may have resulted in a less competitive pricing environment, potentially leading to higher costs for taxpayers compared to a truly open solicitation.

Public Impact

The primary beneficiaries are likely the Department of Defense, through advancements in physical, engineering, and life sciences research. The contract supports research and development activities, the specific outcomes of which are not detailed but are expected to contribute to national security. Geographic impact is concentrated in Nevada, where the contractor is located and performance likely occurred. Workforce implications include specialized R&D personnel employed by OptiComp Corporation and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of transparency regarding the exclusion of sources in the competition.
Cost-plus fixed fee structure can incentivize cost growth without commensurate value increase.
Extended contract duration without clear performance milestones could obscure accountability.
No indication of small business participation or subcontracting goals.

Positive Signals

Awarded under a competitive process, even with exclusions, suggesting some level of market vetting.
The contract addresses critical R&D needs for the Department of Defense.
The fixed fee component of the CPFF contract provides some cost predictability for contractor profit.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. This is a critical area for defense innovation, often characterized by long project timelines, high technical risk, and specialized contractor expertise. The market for defense R&D is competitive, with significant government investment. Benchmarking this contract's value is challenging without knowing the specific research outcomes, but its duration and cost structure are typical for complex, multi-year R&D endeavors.

Small Business Impact

The contract details indicate that small business participation was not a primary consideration, as the 'ss' (small business set-aside) field is false and there's no mention of subcontracting plans. This suggests that the primary contractor, OptiComp Corporation, was expected to perform the work directly or that subcontracting opportunities for small businesses were not mandated or actively pursued under this award. This could limit the integration of innovative small businesses into the defense R&D ecosystem for this specific project.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), given its role in contract administration for the Department of Defense. Accountability measures would be tied to the terms of the Cost Plus Fixed Fee (CPFF) contract, requiring the contractor to document and justify all incurred costs. Transparency is limited by the nature of R&D contracts and the specific competitive exclusion, but cost reporting and progress reviews are standard oversight mechanisms. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Research and Development Programs
Advanced Technology Development Contracts
Engineering and Scientific Services Contracts
Life Sciences Research Contracts

Risk Flags

Long contract duration without clear performance milestones.
Cost-plus contract type increases risk of cost overruns.
Limited competition raises questions about price discovery.
No stated small business participation goals.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.7 million to OPTICOMP CORPORATION. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is OPTICOMP CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $14.7 million.

What is the period of performance?

Start: 2005-07-27. End: 2011-03-31.

What were the specific research objectives and deliverables for this $14.7 million contract awarded to OptiComp Corporation?

The provided data does not specify the exact research objectives or deliverables for this contract. However, the North American Industry Classification System (NAICS) code 541710 indicates 'Research and Development in the Physical, Engineering, and Life Sciences.' Given the Department of Defense as the agency, the research likely pertained to areas such as materials science, advanced engineering for defense systems, or biological applications relevant to national security. The extended duration (2073 days) suggests a project requiring significant time for experimentation, analysis, and potentially prototype development. Without access to the contract's statement of work or performance reports, a detailed understanding of the specific R&D outcomes remains elusive.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for similar R&D efforts?

Cost Plus Fixed Fee (CPFF) contracts are common for research and development where the scope of work is not fully defined at the outset, making fixed-price contracts impractical. In a CPFF contract, the government reimburses the contractor for allowable costs and pays a predetermined fixed fee representing profit. Compared to fixed-price contracts, CPFF offers less cost certainty for the government and can incentivize cost overruns if not managed stringently. However, it allows for greater flexibility in adapting to evolving research needs. Other R&D contract types include Cost Plus Incentive Fee (CPIF), which adjusts the fee based on performance against targets, and Firm-Fixed-Price (FFP) contracts, used when the scope is very well-defined and risk is low, offering the most cost certainty but least flexibility.

What are the implications of awarding a contract under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' for government oversight and contractor performance?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' designation suggests that while the solicitation was intended to be competitive, specific sources were deliberately excluded from bidding. This could be due to reasons such as national security concerns, proprietary technology, or a belief that only a limited number of entities possess the required specialized capabilities. For government oversight, this necessitates a clear justification for the exclusions to ensure fairness and prevent potential collusion or favoritism. It may require more intensive scrutiny to ensure that the excluded sources were not capable of providing better value. For contractor performance, it might imply a higher degree of technical specialization, but also potentially less pressure to innovate on price compared to a truly open competition where a wider range of competitors could emerge.

What is the typical duration for R&D contracts in the physical, engineering, and life sciences sector, and how does this contract's duration compare?

Research and Development (R&D) contracts, particularly those involving complex scientific inquiry and technological innovation, often have extended durations due to the iterative nature of research, experimentation, and validation. Durations can range from a few months for feasibility studies to several years for advanced technology development programs. A contract duration of 2073 days (approximately 5.7 years), as seen with OptiComp Corporation, is on the longer side but not uncommon for significant R&D efforts, especially those aligned with strategic defense objectives that may require substantial foundational research before yielding tangible results. This duration suggests a deep and sustained investment in a particular research area.

Given the contract's focus on R&D and its CPFF structure, what are the primary risks associated with this award?

The primary risks associated with this Cost Plus Fixed Fee (CPFF) R&D contract include: 1. Cost Overruns: The CPFF structure inherently allows costs to escalate, and without rigorous oversight, the final cost could significantly exceed initial estimates. 2. Scope Creep: R&D projects can evolve, and managing changes to the scope without proper controls can lead to increased costs and extended timelines. 3. Lack of Defined Deliverables: If specific, measurable deliverables are not clearly defined and tracked, it can be difficult to assess the contractor's performance and the value received by the government. 4. Technical Risk: R&D inherently involves uncertainty; the project may not achieve its intended technical goals, resulting in sunk costs without desired outcomes. 5. Contractor Performance Monitoring: Ensuring the contractor is performing efficiently and effectively throughout the long duration requires robust oversight mechanisms.

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: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 215 ELKS POINT RD, ZEPHYR COVE, NV, 89448

Business Categories: Category Business, Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline