DoD's $19.5M HPEM Effects Testing Contract Awarded to Verus Research, LLC

Contract Overview

Contract Amount: $19,496,394 ($19.5M)

Contractor: Verus Research, LLC

Awarding Agency: Department of Defense

Start Date: 2022-09-20

End Date: 2027-09-21

Contract Duration: 1,827 days

Daily Burn Rate: $10.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: HPEM EFFECTS TESTING TO CAPTURE EFFECTS AT DEVICE, CIRCUIT, AND SYSTEM LEVELS

Place of Performance

Location: ALBUQUERQUE, BERNALILLO County, NEW MEXICO, 87110

State: New Mexico Government Spending

Plain-Language Summary

Department of Defense obligated $19.5 million to VERUS RESEARCH, LLC for work described as: HPEM EFFECTS TESTING TO CAPTURE EFFECTS AT DEVICE, CIRCUIT, AND SYSTEM LEVELS Key points: 1. Contract focuses on critical research for understanding electromagnetic effects on various systems. 2. The award was made under full and open competition, suggesting a robust market. 3. A Cost Plus Fixed Fee contract type introduces potential for cost overruns if not managed closely. 4. The duration of over 5 years indicates a long-term need for these specialized research services. 5. Research and Development in Physical Sciences is a key area for technological advancement. 6. The contract is managed by the Department of the Air Force, highlighting its strategic importance.

Value Assessment

Rating: fair

Benchmarking the value of this Cost Plus Fixed Fee contract is challenging without detailed cost breakdowns and performance metrics. The fixed fee component provides some cost certainty, but the cost-reimbursable nature of the contract means actual costs could fluctuate. Comparing this to similar R&D contracts in the physical sciences is difficult due to the specialized nature of HPEM effects testing. Further analysis of the contractor's historical performance and the specific deliverables would be needed to provide a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple capable vendors had the opportunity to bid. The presence of two bids suggests a competitive environment, though the exact number of interested parties and the evaluation process details are not provided. This level of competition is generally positive for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: Full and open competition typically leads to better pricing for taxpayers by fostering a competitive environment among potential contractors.

Public Impact

The Department of Defense benefits from advanced research into high-power electromagnetic effects, crucial for national security. This contract supports the development and testing of technologies to protect critical infrastructure and defense systems from electromagnetic threats. The research conducted will likely have implications for the advancement of U.S. technological superiority in defense. Workforce implications may include specialized roles for scientists, engineers, and technicians in the New Mexico region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can lead to higher final costs if not meticulously managed and monitored for efficiency.
The specialized nature of HPEM effects testing may limit the pool of qualified contractors, potentially impacting future competition.
Long contract durations can sometimes lead to scope creep or a misalignment with evolving technological needs if not actively managed.

Positive Signals

Awarded under full and open competition, indicating a healthy market for these specialized R&D services.
The contract supports critical national security research, aligning with strategic defense objectives.
Verus Research, LLC's specialization in this niche area suggests potential for high-quality, targeted research outcomes.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical sciences. The market for specialized electromagnetic effects testing is niche but critical for defense applications. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of HPEM testing, but R&D spending within the DoD is substantial, with significant portions allocated to advanced technology development.

Small Business Impact

The provided data indicates that small business set-asides were not utilized for this contract (ss: false, sb: false). As a definitive contract awarded under full and open competition, the primary focus was on selecting the most capable offeror. There is no explicit information on subcontracting plans for small businesses, which would typically be detailed in the contract's statement of work or associated documents.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the Cost Plus Fixed Fee structure, requiring Verus Research, LLC to justify costs against the fixed fee. Transparency would be facilitated through regular reporting requirements and potential audits by the Defense Contract Audit Agency (DCAA) or the Inspector General, depending on the contract's value and specific oversight provisions.

Related Government Programs

DoD Research and Development Programs
Electromagnetic Warfare Systems
Advanced Materials Research
Defense Technology Innovation
High-Power Electromagnetics Research

Risk Flags

Cost Overrun Risk (CPFF)
Technical Uncertainty in R&D
Long-term Contract Management
Limited Competition Visibility

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.5 million to VERUS RESEARCH, LLC. HPEM EFFECTS TESTING TO CAPTURE EFFECTS AT DEVICE, CIRCUIT, AND SYSTEM LEVELS

Who is the contractor on this award?

The obligated recipient is VERUS RESEARCH, LLC.

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 $19.5 million.

What is the period of performance?

Start: 2022-09-20. End: 2027-09-21.

What is Verus Research, LLC's track record with government contracts, particularly in R&D?

Verus Research, LLC has a history of performing research and development services for the U.S. government. While specific details on past contract values and performance ratings are not provided in this summary, their selection for this significant DoD contract suggests they possess the requisite expertise and capabilities in specialized scientific and engineering fields. Further investigation into their contract history, including past performance evaluations and any reported issues, would be necessary for a comprehensive assessment of their track record. Their focus on areas like directed energy and high-power electromagnetics indicates a specialized niche where they have likely built considerable experience and credibility.

How does the $19.5 million contract value compare to similar HPEM effects testing contracts?

Directly comparing the $19.5 million value of this contract to similar High-Power Electromagnetic (HPEM) effects testing contracts is challenging due to the highly specialized and often classified nature of this research. The market for such services is relatively niche. However, considering the multi-year duration (over 5 years) and the complexity of testing at device, circuit, and system levels, the total contract value appears reasonable for a significant R&D effort within the Department of Defense. Larger, more comprehensive R&D programs within the DoD can reach hundreds of millions or even billions, but this specific contract seems focused on a defined scope of HPEM effects testing.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for Research and Development (R&D) revolve around cost control and contractor efficiency. While the fixed fee provides the contractor with a defined profit margin, the cost-reimbursable nature means the government bears the risk of actual costs incurred. If the contractor is not diligent in managing expenses, or if unforeseen technical challenges arise that significantly increase costs, the total expenditure for the government can exceed initial projections. For R&D, where outcomes can be uncertain, there's also a risk that the contractor might prioritize activities that maximize cost reimbursement over achieving the most efficient or innovative solutions within the spirit of the fixed fee.

How effective is HPEM effects testing in enhancing defense system resilience?

HPEM effects testing is crucial for enhancing defense system resilience by identifying vulnerabilities to high-power electromagnetic energy, whether from natural phenomena (like lightning or solar flares) or man-made sources (like electronic warfare systems or improvised explosive devices). By understanding how devices, circuits, and systems react to these energy levels, the Department of Defense can develop and implement effective hardening strategies, shielding techniques, and operational procedures. This testing allows for the proactive design of more robust systems, reducing the risk of mission failure due to electromagnetic interference or damage, thereby directly contributing to the overall survivability and effectiveness of military assets in contested environments.

What is the historical spending trend for R&D in physical sciences by the Department of the Air Force?

The Department of the Air Force consistently allocates significant funding towards Research and Development (R&D) in physical sciences, recognizing its importance for maintaining technological superiority. Historical spending trends generally show a steady or increasing investment in this area, driven by evolving threats and the need for advanced capabilities. While specific annual figures fluctuate based on budgetary priorities and program needs, the overall commitment to R&D in fields like physics, engineering, and materials science remains a cornerstone of Air Force modernization efforts. This contract for HPEM effects testing aligns with this broader trend of investing in fundamental and applied research to address complex scientific and engineering challenges relevant to aerospace and defense.

What are the potential implications of this contract for small businesses in the R&D sector?

As this contract was awarded under full and open competition and does not appear to have specific small business set-aside provisions, its direct impact on small businesses is likely indirect. Verus Research, LLC, as the prime contractor, may choose to subcontract portions of the work to small businesses if their specialized expertise is required. However, the primary benefit for the small business ecosystem in the R&D sector would stem from the overall increase in government investment in research, which can stimulate innovation and create opportunities for small firms to compete on future, potentially smaller or more specialized, contracts. The lack of explicit subcontracting goals means small businesses cannot rely on this specific contract for set-aside opportunities.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

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: 6100 UPTOWN BLVD NE, ALBUQUERQUE, NM, 87110

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $29,999,879

Exercised Options: $29,999,879

Current Obligation: $19,496,394

Actual Outlays: $1,387,666

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline