DoD's $16.6M R&D contract with UNITED SOLAR OVONIC Corp shows mixed value and limited competition

Contract Overview

Contract Amount: $16,605,521 ($16.6M)

Contractor: United Solar Ovonic Corp

Awarding Agency: Department of Defense

Start Date: 2006-06-29

End Date: 2012-09-28

Contract Duration: 2,283 days

Daily Burn Rate: $7.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Place of Performance

Location: AUBURN HILLS, OAKLAND County, MICHIGAN, 48326, UNITED STATES OF AMERICA

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $16.6 million to UNITED SOLAR OVONIC CORP for work described as: Key points: 1. Contract value of $16.6 million over 6 years suggests significant investment in R&D. 2. The contract was competed after exclusion of sources, indicating a potentially limited competitive landscape. 3. The 'MI' (Michigan) state designation may point to specific regional R&D capabilities or focus. 4. The Cost Plus Fixed Fee (CPFF) pricing structure can incentivize cost overruns if not closely monitored. 5. The absence of small business set-aside flags suggests larger prime contractors were likely involved. 6. The contract's duration of 2283 days (over 6 years) indicates a long-term research objective.

Value Assessment

Rating: fair

Benchmarking the value of this $16.6 million R&D contract is challenging without specific performance metrics or comparable projects. The CPFF structure carries inherent risk, as it allows the contractor to recover costs plus a fixed fee, potentially leading to higher overall expenditures than a fixed-price contract. However, for complex R&D where costs are difficult to predict, CPFF can be appropriate. Further analysis would require understanding the specific research outcomes and whether they met expectations relative to the investment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which implies that while competition was sought, certain sources were intentionally excluded. This suggests a specific technical capability or proprietary technology was likely required, narrowing the pool of potential bidders. The presence of only 2 bidders, as indicated by 'no': 2, further confirms a limited competitive environment. This level of competition may not have driven the most aggressive pricing.

Taxpayer Impact: Limited competition can result in higher prices for taxpayers as the government may have fewer options to negotiate favorable terms.

Public Impact

The primary beneficiaries are likely the research and development sector, potentially advancing technologies within the Department of Defense's purview. The services delivered are research and development in physical, engineering, and life sciences, contributing to technological innovation. The geographic impact is tied to the contractor's location in Michigan (MI), suggesting a focus on regional expertise or facilities. Workforce implications include the potential for highly skilled R&D jobs in specialized scientific and engineering fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' indicates a potentially restricted market, which could limit innovation and drive up costs.
The Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not rigorously managed, potentially exceeding initial budget expectations.
Limited competition (2 bidders) suggests a lack of robust market pressure to achieve the best possible pricing for the government.
The absence of small business participation (sb: false) means potential missed opportunities to leverage specialized capabilities within the small business sector.

Positive Signals

The contract addresses Research and Development in Physical, Engineering, and Life Sciences (NAICS 541710), a critical area for technological advancement.
The contract was awarded by the Department of Defense, indicating a focus on national security or defense-related innovation.
The contract duration of over 6 years suggests a commitment to long-term research goals and potential for significant technological breakthroughs.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences. The R&D sector is characterized by innovation, high upfront investment, and often long development cycles. Comparable spending benchmarks would depend heavily on the specific sub-field of R&D, but government investment in defense-related R&D is substantial, aiming to maintain technological superiority. This contract represents a portion of that broader investment landscape.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false). This suggests that the scope of work was likely geared towards larger entities with extensive R&D capabilities or that the competition criteria favored established players. There is no explicit information on subcontracting plans, but the lack of a small business set-aside implies that opportunities for small businesses may be limited to subcontracting roles, if any, rather than prime contracting.

Oversight & Accountability

Oversight for this contract would fall under the Department of Defense, likely managed by the Defense Contract Management Agency (DCMA) given the 'sa' field. Accountability measures would be tied to the performance milestones and deliverables outlined in the Cost Plus Fixed Fee contract. Transparency is generally facilitated through contract databases like FPDS, but detailed performance reports and cost breakdowns may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

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

Risk Flags

Limited Competition
Cost Plus Fixed Fee Structure
Potential for Cost Overruns
Uncertain R&D Outcomes

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.6 million to UNITED SOLAR OVONIC CORP. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is UNITED SOLAR OVONIC CORP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $16.6 million.

What is the period of performance?

Start: 2006-06-29. End: 2012-09-28.

What specific technological advancements or research outcomes were achieved under this $16.6 million contract with UNITED SOLAR OVONIC Corp?

Detailed information regarding the specific technological advancements or research outcomes achieved under this contract is not publicly available in the provided data snippet. The data indicates the contract was for 'Research and Development in the Physical, Engineering, and Life Sciences' awarded by the Department of Defense. To ascertain the specific outcomes, one would need to access contract performance reports, final research publications, or program reviews associated with this award. The contract's duration (over 6 years) suggests a significant research effort, but without access to post-award documentation, the tangible results remain unknown. Future analysis could involve searching for related technical reports or patents filed by UNITED SOLAR OVONIC Corp during the contract period.

How does the Cost Plus Fixed Fee (CPFF) pricing structure for this contract compare to other R&D contracts of similar scope and duration?

The Cost Plus Fixed Fee (CPFF) structure is common for R&D contracts where the final costs are uncertain. For this $16.6 million contract spanning over 6 years, CPFF allows the contractor to be reimbursed for allowable costs plus a predetermined fixed fee representing profit. Compared to other R&D contracts, CPFF is often used when the scope is not well-defined or when innovation carries inherent risks. However, it carries a higher risk of cost overruns for the government than fixed-price contracts. Benchmarking would require analyzing the fee percentage relative to total contract value across similar DoD R&D efforts and assessing whether the fixed fee adequately compensated the contractor for the risks undertaken without incentivizing excessive spending.

What were the primary reasons for excluding certain sources in the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award process?

The designation 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' implies that while the competition was intended to be open, specific sources were deliberately excluded. The primary reasons for such exclusions typically relate to unique capabilities, proprietary technology, specific security requirements, or the need for specialized expertise that only a limited number of entities possess. In the context of R&D for the Department of Defense, this could mean the contractor held patents, unique manufacturing processes, or had prior experience with a specific technology critical to the research objective. Without further documentation, the exact rationale for excluding other potential bidders remains speculative but likely centers on specialized requirements.

What is the historical spending pattern for UNITED SOLAR OVONIC Corp with the Department of Defense, and how does this contract fit within that pattern?

The provided data snippet focuses on a single contract awarded to UNITED SOLAR OVONIC Corp by the Department of Defense (DoD) for $16.6 million. To understand historical spending patterns, a broader search of federal procurement databases would be necessary. This would involve aggregating all contracts awarded to UNITED SOLAR OVONIC Corp by the DoD over various fiscal years. Analyzing this aggregated data would reveal the total value of contracts, the types of services procured (e.g., R&D, manufacturing, services), and the agencies within the DoD that utilized their services. This specific contract, being an R&D award over a significant duration, suggests a potentially strategic investment by the DoD in UNITED SOLAR OVONIC Corp's capabilities within the physical, engineering, and life sciences domain.

What are the potential risks associated with the contractor, UNITED SOLAR OVONIC Corp, based on their track record or the nature of this R&D contract?

Assessing the specific risks associated with UNITED SOLAR OVONIC Corp requires a review beyond the provided data. However, general risks associated with this R&D contract include potential cost overruns due to the CPFF structure, delays in research milestones, and the possibility that the research may not yield the desired technological outcomes. The 'limited' competition aspect also introduces a risk of suboptimal pricing. To evaluate contractor-specific risks, one would need to examine their past performance on similar government contracts, any history of contract disputes or terminations, financial stability, and their technical expertise relevant to the project's objectives. Without this additional context, risk assessment remains generalized.

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 › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: BASIC RESEARCH

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 3800 LAPEER RD, AUBURN HILLS, MI, 48326

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline