DoD's $15M FIVR System Contract Awarded to Applied Research Associates, Inc. for R&D

Contract Overview

Contract Amount: $15,047,807 ($15.0M)

Contractor: Applied Research Associates, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-08-21

End Date: 2013-03-29

Contract Duration: 2,047 days

Daily Burn Rate: $7.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: FIELD INTRAVENOUS RECONSTITUTION (FIVR) SYSTEM

Place of Performance

Location: ALBUQUERQUE, BERNALILLO County, NEW MEXICO, 87110, UNITED STATES OF AMERICA

State: New Mexico Government Spending

Plain-Language Summary

Department of Defense obligated $15.0 million to APPLIED RESEARCH ASSOCIATES, INC. for work described as: FIELD INTRAVENOUS RECONSTITUTION (FIVR) SYSTEM Key points: 1. Contract focused on research and development, indicating early-stage innovation rather than immediate product deployment. 2. The contract duration of 2047 days (over 5 years) suggests a long-term R&D effort. 3. Awarded under full and open competition, implying a broad search for qualified contractors. 4. The 'NM' (New Mexico) state code for the contractor may indicate a specific geographic focus or origin. 5. The contract type 'COST PLUS FIXED FEE' can lead to cost overruns if not carefully managed. 6. The absence of small business set-aside flags suggests the primary contractor is not a small business, and subcontracting opportunities are not explicitly mandated. 7. The NAICS code 541710 points to a specialized R&D sector.

Value Assessment

Rating: fair

Benchmarking the value of this R&D contract is challenging without specific deliverables or performance metrics. The total award amount of approximately $15 million over more than five years suggests a significant investment in research. However, the 'COST PLUS FIXED FEE' contract type carries inherent risks of cost escalation. Without comparable R&D contracts for similar systems, it's difficult to definitively assess if the pricing represents good value for money. The number of bids (2) is low for a full and open competition, which could indicate either a niche market or potential issues with the solicitation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. However, only two bids were received. This limited number of bidders, despite the open competition, could suggest a highly specialized field where few companies possess the required expertise, or it might indicate that the contract terms or requirements were not attractive to a wider range of potential offerors. The limited competition may have impacted price discovery, potentially leading to a higher price than if more bidders had participated.

Taxpayer Impact: For taxpayers, receiving only two bids in an open competition raises questions about the effectiveness of the solicitation process in attracting a robust field of competitors. This could mean less competitive pressure on pricing, potentially resulting in a less optimal use of public funds compared to scenarios with more bidders.

Public Impact

The primary beneficiaries are likely the Department of Defense, which gains access to research and development for a new system. The contract aims to deliver advancements in the 'FIELD INTRAVENOUS RECONSTITUTION (FIVR) SYSTEM'. The geographic impact is primarily linked to the contractor's location in New Mexico. Workforce implications include employment opportunities for researchers, engineers, and support staff at Applied Research Associates, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can incentivize cost overruns if not managed tightly.
Low number of bidders (2) in a full and open competition may indicate limited market interest or specialized requirements.
Long contract duration (2047 days) increases exposure to potential scope creep or changing technological landscapes.
Lack of explicit small business subcontracting goals may limit opportunities for smaller firms in this contract's ecosystem.

Positive Signals

Awarded through full and open competition, suggesting an effort to find the best possible solution.
Contracting for R&D indicates investment in future capabilities and technological advancement.
The specific focus on a 'FIELD INTRAVENOUS RECONSTITUTION (FIVR) SYSTEM' addresses a potential operational need within the DoD.

Sector Analysis

The contract falls within the Research and Development sector, specifically NAICS code 541710 (Research and Development in the Physical, Engineering, and Life Sciences). This sector is characterized by innovation, long development cycles, and significant investment. Comparable spending benchmarks are difficult to establish without knowing the specific technological advancements sought. However, R&D spending by the Department of Defense is substantial, reflecting a strategic priority to maintain technological superiority. This contract represents a small fraction of the overall DoD R&D budget.

Small Business Impact

This contract was not awarded as a small business set-aside, and the 'sb' field is false, indicating no specific mandate for small business participation. The contractor, Applied Research Associates, Inc., is likely not a small business based on the contract size and nature. There are no explicit requirements for subcontracting to small businesses mentioned. This means that opportunities for small businesses to participate in this contract would likely depend on the prime contractor's discretion or if specific small business capabilities are needed for certain project components.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. Accountability measures would be tied to the contract's milestones and deliverables, particularly given the Cost Plus Fixed Fee structure which requires careful monitoring of costs against the fixed fee. Transparency is generally facilitated through contract award databases, though specific R&D details might be sensitive. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract.

Related Government Programs

Department of Defense Research and Development Programs
Medical Systems Development Contracts
Applied Scientific Research Contracts
Engineering Services Contracts

Risk Flags

Low Bidder Count
Cost Plus Fixed Fee Contract Type
Long Contract Duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.0 million to APPLIED RESEARCH ASSOCIATES, INC.. FIELD INTRAVENOUS RECONSTITUTION (FIVR) SYSTEM

Who is the contractor on this award?

The obligated recipient is APPLIED RESEARCH ASSOCIATES, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $15.0 million.

What is the period of performance?

Start: 2007-08-21. End: 2013-03-29.

What is the specific technological innovation or advancement expected from the FIELD INTRAVENOUS RECONSTITUTION (FIVR) SYSTEM?

The provided data does not detail the specific technological advancements sought for the FIELD INTRAVENOUS RECONSTITUTION (FIVR) SYSTEM. As a research and development contract, the objective is likely to explore, design, prototype, and test a system that can reconstitute intravenous fluids in a field setting, potentially improving medical readiness and care delivery for military personnel in deployed environments. The exact nature of the innovation would be elaborated in the contract's Statement of Work (SOW), which is not included in the provided data. This could involve novel methods for fluid preparation, sterilization, or delivery mechanisms optimized for austere conditions.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other R&D contract types in terms of risk and potential value for the government?

The Cost Plus Fixed Fee (CPFF) contract type is often used for R&D where the scope of work is not well-defined, allowing flexibility. The government pays the contractor's actual costs plus a fixed fee, which is the contractor's profit. This structure incentivizes the contractor to control costs to maximize their profit margin relative to the fixed fee. However, it carries a risk of cost overruns if the initial cost estimates are inaccurate or if unforeseen challenges arise during R&D. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility but less cost certainty for the government. Compared to Cost Plus Incentive Fee (CPIF), CPFF lacks the explicit incentive structure tied to performance targets, potentially offering less motivation for exceeding expectations beyond the baseline.

What are the implications of only two bids being submitted for this full and open competition?

The submission of only two bids in a 'full and open competition' scenario suggests several possibilities. Firstly, the market for this specific R&D may be highly specialized, with only a few entities possessing the requisite technical expertise, facilities, and security clearances. Secondly, the contract's requirements, solicitation terms, or anticipated return on investment might not have been attractive enough to a broader range of potential bidders. Thirdly, the pre-solicitation outreach or market research conducted by the agency might not have effectively reached all qualified sources. From a taxpayer perspective, limited competition can reduce price pressure, potentially leading to a higher contract award price than if a more robust bidding process had occurred. It also raises questions about whether the agency fully leveraged the competitive landscape.

What is the track record of Applied Research Associates, Inc. in government contracting, particularly in R&D?

Applied Research Associates, Inc. (ARA) has a history of performing work for the U.S. government, including contracts related to research and development. While the provided data doesn't offer a comprehensive track record, ARA is known for its expertise in various scientific and engineering fields, often supporting defense and aerospace initiatives. Their portfolio typically includes areas like advanced materials, simulation, modeling, and systems engineering. To fully assess their track record for this specific FIVR system contract, a deeper dive into their past performance evaluations, contract history (especially regarding cost control and schedule adherence on similar R&D projects), and any past performance issues or commendations would be necessary. Their presence in government contracting suggests they meet certain qualification standards.

How does the contract duration of 2047 days (approximately 5.6 years) impact the assessment of this R&D investment?

A contract duration of 2047 days for R&D signifies a long-term commitment to developing a specific technology or system. This extended timeline is common in research and development, where innovation often involves iterative processes, experimentation, and overcoming unforeseen technical hurdles. For the government, a longer duration allows for deeper exploration and refinement of the technology. However, it also increases the risk associated with the investment. Market needs, technological landscapes, and strategic priorities can shift significantly over 5.6 years. Therefore, robust oversight and regular reviews are crucial to ensure the project remains aligned with evolving requirements and to manage potential cost escalations or scope creep throughout its lifecycle.

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 › N – Health 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: 4300 SAN MATEO BLVD NE STE A220, ALBUQUERQUE, NM, 87110

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $42,101,396

Exercised Options: $32,180,659

Current Obligation: $15,047,807

Contract Characteristics

Cost or Pricing Data: YES

Timeline