DoD's $12.8M R&D Contract to IBM for Physical, Engineering, and Life Sciences Research

Contract Overview

Contract Amount: $12,829,907 ($12.8M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Defense

Start Date: 2023-08-02

End Date: 2026-12-07

Contract Duration: 1,223 days

Daily Burn Rate: $10.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: RESEARCH AND DEVELOPMENT

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20191

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $12.8 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: RESEARCH AND DEVELOPMENT Key points: 1. Contract awarded to a large, established technology firm, suggesting a focus on complex, high-value research. 2. The contract's duration of over three years indicates a significant, long-term research objective. 3. Awarded under full and open competition, implying a robust selection process. 4. The 'Cost Plus Fixed Fee' pricing structure may incentivize cost control while ensuring contractor profit. 5. Research area is broad, encompassing physical, engineering, and life sciences, potentially impacting multiple technological domains. 6. Virginia is the state of performance, suggesting a concentration of federal R&D activities in that region.

Value Assessment

Rating: good

Benchmarking the value of this specific R&D contract is challenging without more granular data on the scope of research. However, the $12.8 million award over approximately three years for specialized research by a major contractor like IBM suggests a reasonable investment for potentially groundbreaking work. The 'Cost Plus Fixed Fee' (CPFF) structure is common for R&D where exact costs are difficult to predict, but it requires careful oversight to ensure value. Compared to other large-scale R&D efforts within the Department of Defense, this amount appears to be within a typical range for targeted research initiatives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit proposals. This approach generally fosters a competitive environment, encouraging multiple bidders to offer their best technical solutions and pricing. The specific number of bidders is not provided, but the 'full and open' designation suggests a deliberate effort to maximize competition and identify the most capable contractor for this specialized research.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it is expected to drive down costs and improve the quality of services or goods received by ensuring the government selects the best value offer.

Public Impact

The U.S. Special Operations Command (USOC) is the direct beneficiary, likely seeking advancements in technologies relevant to special operations. The contract supports research and development in physical, engineering, and life sciences, potentially leading to new capabilities and innovations. Performance is located in Virginia, potentially creating or sustaining high-skilled jobs in the region's technology and research sectors. Advancements made could have dual-use applications, benefiting both military and civilian sectors in the long term.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in CPFF contracts if not rigorously managed.
Scope creep in R&D projects can lead to increased costs and extended timelines.
Dependence on a single large contractor for critical R&D may limit future flexibility.

Positive Signals

Award to a reputable contractor like IBM suggests a high likelihood of technical competence and successful project execution.
Full and open competition indicates a thorough vetting process, likely resulting in a strong technical proposal.
Long contract duration allows for in-depth research and development, potentially yielding significant breakthroughs.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences. This is a critical area for defense innovation, aiming to develop next-generation technologies. The market for defense R&D is highly specialized, with significant investment from government agencies. Comparable spending benchmarks would typically involve other large R&D contracts awarded by the DoD or other federal agencies for similar scientific domains, often running into tens or hundreds of millions of dollars for major programs.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Given the nature of the research and the award to a large corporation like IBM, it is unlikely that significant subcontracting opportunities for small businesses will be mandated unless specified within the contract's statement of work. The focus is on leveraging the capabilities of a major technology provider rather than distributing work among smaller entities.

Oversight & Accountability

Oversight for this contract will likely be managed by the U.S. Special Operations Command (USOC) contracting and program management offices. The 'Cost Plus Fixed Fee' structure necessitates close monitoring of expenditures and progress to ensure adherence to the fixed fee and overall budget. Transparency will depend on the DoD's reporting practices for R&D contracts and any specific reporting requirements stipulated in the contract. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Research and Development Programs
U.S. Special Operations Command Technology Development
Advanced Scientific Research Contracts
Federal Science and Technology Investment

Risk Flags

Cost Overrun Risk
Scope Creep Potential
Long-term R&D Uncertainty

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.8 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. RESEARCH AND DEVELOPMENT

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (U.S. Special Operations Command).

What is the total obligated amount?

The obligated amount is $12.8 million.

What is the period of performance?

Start: 2023-08-02. End: 2026-12-07.

What is IBM's track record with similar large-scale R&D contracts for the Department of Defense?

IBM has a long history of engaging in large-scale research and development contracts with various U.S. federal agencies, including the Department of Defense. Their expertise spans numerous scientific and engineering disciplines relevant to this contract. While specific details of past DoD R&D contracts are often proprietary, IBM has consistently been a major player in government contracting for advanced technology solutions. Their involvement typically signifies a capacity to handle complex projects requiring significant scientific and engineering resources. Past performance is a key factor in the 'full and open competition' process, suggesting that IBM's prior successful engagements likely contributed to their selection for this award.

How does the $12.8 million value compare to other DoD R&D contracts in physical, engineering, and life sciences?

The $12.8 million award for this specific R&D contract appears to be a moderate investment within the broader context of the Department of Defense's R&D budget. The DoD invests billions annually in research and development across various scientific domains. Contracts for fundamental research or early-stage development in areas like physical sciences, engineering, and life sciences can range from a few million dollars for focused projects to hundreds of millions for major technological initiatives or platform development. This contract's value suggests a focused research effort rather than a large-scale program, but it is substantial enough to engage a major contractor like IBM for a multi-year period.

What are the primary risks associated with a 'Cost Plus Fixed Fee' R&D contract of this nature?

The primary risks associated with a 'Cost Plus Fixed Fee' (CPFF) contract for R&D revolve around cost control and scope management. While the fixed fee provides a defined profit margin for the contractor, the 'cost plus' element means the government bears the risk of actual costs incurred. If the contractor's costs exceed initial estimates, the government pays more. For R&D, predicting exact costs is inherently difficult, increasing the risk of cost overruns. Additionally, scope creep—where the project's objectives expand beyond the original agreement—can significantly inflate costs and extend timelines if not managed tightly through rigorous oversight and change control processes.

What is the expected program effectiveness or outcome for this R&D effort?

The expected program effectiveness and outcomes for this R&D effort are not explicitly detailed in the provided data, as it focuses on contract specifics. However, given the award is to the U.S. Special Operations Command (USOC) and covers physical, engineering, and life sciences, the likely goal is to develop advanced technologies or scientific understanding that can enhance special operations capabilities. This could include advancements in areas such as materials science, sensor technology, human performance enhancement, or novel engineering solutions for operational challenges. The success will be measured by the successful completion of research milestones and the potential transition of developed technologies into operational use.

What are historical spending patterns for R&D contracts awarded by the U.S. Special Operations Command?

Historical spending patterns for R&D contracts by the U.S. Special Operations Command (USOC) generally reflect a strategic focus on acquiring cutting-edge technologies to maintain a qualitative advantage for special operations forces. USOC R&D spending often targets niche capabilities, rapid prototyping, and the integration of advanced systems. While specific aggregate spending figures fluctuate annually based on strategic priorities and budget allocations, USOC consistently invests in areas like intelligence, surveillance, reconnaissance (ISR), communications, cyber capabilities, and specialized equipment. Contracts awarded often involve complex, high-risk, high-reward research, frequently utilizing competitive procurement processes to ensure best value.

What does the '541715' NAICS code signify in terms of the contract's scope?

The North American Industry Classification System (NAICS) code '541715' specifically designates 'Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)'. This code indicates that the contract's scope is broad, encompassing fundamental and applied research across a wide spectrum of scientific disciplines. It covers areas such as physics, chemistry, materials science, various engineering fields (e.g., mechanical, electrical, aerospace), and biological sciences. The exclusion of nanotechnology and biotechnology suggests a focus on other advanced scientific frontiers, potentially related to defense applications that do not fall under those specific sub-categories.

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

Solicitation ID: H9222220BAAST

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1 NEW ORCHARD RD, ARMONK, NY, 10504

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

Financial Breakdown

Contract Ceiling: $12,829,907

Exercised Options: $12,829,907

Current Obligation: $12,829,907

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline