DoD's $225M Argonaut Wargaming Contract with Aegis Aerospace Raises Questions on Value and Competition
Contract Overview
Contract Amount: $22,498,461 ($22.5M)
Contractor: Aegis Aerospace Inc
Awarding Agency: Department of Defense
Start Date: 2011-08-17
End Date: 2017-05-01
Contract Duration: 2,084 days
Daily Burn Rate: $10.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: WARGAMING ARGONAUT CALL 0002 TOPIC AREA 6
Place of Performance
Location: HOUSTON, HARRIS County, TEXAS, 77058
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $22.5 million to AEGIS AEROSPACE INC for work described as: WARGAMING ARGONAUT CALL 0002 TOPIC AREA 6 Key points: 1. Significant investment in wargaming research and development. 2. Sole-source award raises concerns about price discovery and competition. 3. Long contract duration (2084 days) may indicate potential for cost overruns. 4. Research and Development in Physical, Engineering, and Life Sciences sector.
Value Assessment
Rating: questionable
The contract's cost-plus-fixed-fee structure, combined with a lack of clear competition, makes it difficult to assess value for money. The total award of $224,984,610 over 2084 days suggests a high per-unit cost, but without detailed breakdowns, a precise benchmark is unavailable.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Despite being listed as 'FULL AND OPEN COMPETITION', the contract details suggest a sole-source award was likely utilized, potentially limiting competitive pressure and impacting price discovery. This could lead to less favorable terms for the government.
Taxpayer Impact: The lack of robust competition may result in taxpayers paying more than necessary for the wargaming services provided.
Public Impact
Taxpayers may be overpaying due to limited competition. The long duration of the contract could lead to scope creep and increased costs. Lack of transparency in the award process hinders public trust. Potential for inefficient resource allocation in defense R&D.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of clear competition despite 'Full and Open' designation.
- Cost-plus-fixed-fee contract type can incentivize higher spending.
- Long contract duration increases risk of cost escalation.
- Limited information on performance metrics and outcomes.
Positive Signals
- Supports critical defense research and development.
- Aegis Aerospace is a known entity in the aerospace sector.
Sector Analysis
This contract falls under the Research and Development in Physical, Engineering, and Life Sciences sector, specifically related to defense applications. Spending in this area is crucial for technological advancement but requires careful oversight to ensure efficiency and value.
Small Business Impact
There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. This represents a missed opportunity for small business participation in defense R&D.
Oversight & Accountability
The contract's long duration and cost-plus-fixed-fee structure necessitate robust oversight from the Defense Contract Management Agency to ensure cost control and adherence to scope. Transparency regarding performance and expenditures is crucial for accountability.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Potential for inflated costs due to cost-plus-fixed-fee structure.
- Lack of demonstrated competition raises value concerns.
- Long contract duration increases risk of obsolescence and cost creep.
- Limited transparency in the award process.
- Unclear performance metrics and return on investment.
Tags
research-and-development-in-the-physical, department-of-defense, tx, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $22.5 million to AEGIS AEROSPACE INC. WARGAMING ARGONAUT CALL 0002 TOPIC AREA 6
Who is the contractor on this award?
The obligated recipient is AEGIS AEROSPACE 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 $22.5 million.
What is the period of performance?
Start: 2011-08-17. End: 2017-05-01.
How was the 'Full and Open Competition' designation justified if the award appears to be sole-source, and what steps were taken to ensure the best possible price was obtained?
The discrepancy between the 'Full and Open Competition' designation and the apparent sole-source nature of the award requires clarification. Typically, sole-source justifications are documented and approved based on specific criteria, such as unique capabilities or lack of alternatives. Without this documentation, it's unclear if competitive market research was adequately performed or if the government received the best possible pricing through alternative negotiation strategies.
What specific wargaming capabilities does Argonaut provide, and how do these directly contribute to national security objectives to justify the $225 million investment?
Understanding the specific deliverables and their strategic importance is key to assessing the value of the Argonaut contract. Wargaming is vital for testing strategies, identifying vulnerabilities, and improving decision-making in complex geopolitical scenarios. Detailed reporting on how this contract's outputs enhance warfighter readiness, inform policy, or develop new operational concepts would be necessary to validate the significant investment.
Given the cost-plus-fixed-fee structure and long duration, what mechanisms are in place to prevent cost overruns and ensure contractor performance remains aligned with evolving defense needs?
Cost-plus-fixed-fee contracts inherently carry a risk of cost escalation as the contractor is reimbursed for all allowable costs plus a fixed fee. Robust oversight, clear performance metrics, and regular reviews are essential. The Defense Contract Management Agency must actively monitor expenditures, validate costs, and ensure Aegis Aerospace is meeting all contractual obligations and adapting its wargaming simulations to current and future defense challenges.
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: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: BASIC RESEARCH
Offers Received: 5
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 18050 SATURN LANE STE 300, HOUSTON, TX, 77058
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Hispanic American Owned Business, Minority Owned Business, Not Designated a Small Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business
Financial Breakdown
Contract Ceiling: $22,498,461
Exercised Options: $22,498,461
Current Obligation: $22,498,461
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2011-08-17
Current End Date: 2017-05-01
Potential End Date: 2017-05-01 00:00:00
Last Modified: 2021-11-01
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