DoD's $645M contract with Khimprom for RDTE/Other Defense-Applied Research raises questions about value and competition

Contract Overview

Contract Amount: $10,700,000 ($10.7M)

Contractor: Khimprom Public Joint Stock C

Awarding Agency: Department of Defense

Start Date: 2004-07-20

End Date: 2006-05-31

Contract Duration: 680 days

Daily Burn Rate: $15.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: R&D

Official Description: 200411!000340!9700!HDTRA1!DEFENSE THREAT REDUCTION AGENCY !HDTRA104C0022 !A!N! !N! ! !20040720!20060531!645169236!645169236!645169236!N!KHIMPROM PUBLIC JOINT STOCK C!101 PROMYSHLENNAYA STREET !NOVOCHEBOKSARS !RS!42890!00000! !RS!* !* !RUSSIA !+000010700000!N!N!000000000000!AD92!RDTE/OTHER DEFENSE-APPLIED RESEARCH !S1 !SERVICES !000 !* !928120!E! !3! ! ! ! ! !99990909!B! ! !N!Z!D!N!J!1!001!N!1A!Z!Y!Z!B!RS!N!L!N! ! ! ! ! !A!A!000!A!B!N! ! ! ! ! ! !0001! !

Plain-Language Summary

Department of Defense obligated $10.7 million to KHIMPROM PUBLIC JOINT STOCK C for work described as: 200411!000340!9700!HDTRA1!DEFENSE THREAT REDUCTION AGENCY !HDTRA104C0022 !A!N! !N! ! !20040720!20060531!645169236!645169236!645169236!N!KHIMPROM PUBLIC JOINT STOCK C!101 PROMYSHLENNAYA STREET !NOVOCHEBOKSARS !RS!42890!00000! !RS!* !* … Key points: 1. Contract awarded to a Russian entity for defense-applied research. 2. Significant value of $645 million over two years. 3. Sole-source award raises concerns about price discovery and competition. 4. Limited transparency on the specific nature of the research and its impact.

Value Assessment

Rating: questionable

The contract value of $645 million for a two-year period is substantial. Without clear benchmarks for similar international defense-applied research contracts, assessing its value for money is difficult. The lack of competition further complicates this assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating a lack of competitive bidding. This method limits price discovery and may result in a higher cost to taxpayers than if multiple vendors had competed.

Taxpayer Impact: The sole-source nature of this large contract raises concerns about whether taxpayers received the best possible value. The absence of competition could have led to inflated pricing.

Public Impact

Award to a foreign entity for sensitive defense research. Lack of public information on the specific research conducted. Potential national security implications due to the nature of the work and the contractor's location.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Foreign contractor
Lack of competition
Limited transparency

Positive Signals

Contract supports defense-applied research
Definitive contract type

Sector Analysis

This contract falls under RDTE/Other Defense-Applied Research, a sector focused on innovation and development for defense purposes. Benchmarks for such international contracts are often scarce due to their specialized and sensitive nature.

Small Business Impact

There is no indication that small businesses were involved in this contract, as it was awarded to a single foreign entity on a sole-source basis.

Oversight & Accountability

The sole-source nature of this contract warrants close oversight to ensure accountability and that the research objectives were met effectively and at a reasonable cost. Public reporting on the outcomes is limited.

Related Government Programs

International Affairs
Department of Defense Contracting
Defense Threat Reduction Agency Programs

Risk Flags

Sole-source award lacks competition.
Contract awarded to a foreign entity.
Limited transparency on research scope and outcomes.
Potential for inflated pricing due to lack of competition.
National security implications of foreign defense research.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.7 million to KHIMPROM PUBLIC JOINT STOCK C. 200411!000340!9700!HDTRA1!DEFENSE THREAT REDUCTION AGENCY !HDTRA104C0022 !A!N! !N! ! !20040720!20060531!645169236!645169236!645169236!N!KHIMPROM PUBLIC JOINT STOCK C!101 PROMYSHLENNAYA STREET !NOVOCHEBOKSARS !RS!42890!00000! !RS!* !* !RUSSIA !+000010700000!N!N!000000000000!AD92!RDTE/OTHER DEFENSE-APPLIED RESEARCH !S1 !SERVICES !000 !* !928120!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is KHIMPROM PUBLIC JOINT STOCK C.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Threat Reduction Agency).

What is the total obligated amount?

The obligated amount is $10.7 million.

What is the period of performance?

Start: 2004-07-20. End: 2006-05-31.

What specific defense-applied research was conducted under this contract, and what were the tangible outcomes or advancements?

The specific details of the defense-applied research conducted under this contract are not publicly disclosed. Without this information, it is impossible to assess the tangible outcomes or advancements achieved. The contract's classification or sensitive nature likely contributes to this lack of transparency, making it difficult to evaluate the return on investment for taxpayers.

What were the justifications for awarding this significant contract on a sole-source basis to a foreign entity?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of domestic alternatives. For this contract, the specific rationale for selecting Khimprom Public Joint Stock Company in Russia without competition is not detailed in the provided data. This lack of transparency raises concerns about whether all avenues for competitive bidding were fully explored.

How does the $645 million expenditure align with typical spending for similar international defense research projects, and was it cost-effective?

Assessing the cost-effectiveness of this $645 million contract is challenging due to the lack of publicly available benchmarks for comparable international defense research projects. The sole-source nature further complicates this, as there was no competitive pressure to ensure optimal pricing. Without more data on the research scope and outcomes, a definitive cost-effectiveness analysis is not feasible.

Industry Classification

NAICS: Public Administration › National Security and International Affairs › International Affairs

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 101 PROMYSHLENNAYA STREET, NOVOCHEBOKSARS

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline