DoD's $19M R&D contract with Xcellerex Inc. for physical sciences research shows moderate competition and a fair value assessment

Contract Overview

Contract Amount: $18,986,551 ($19.0M)

Contractor: Xcellerex, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-05-18

End Date: 2009-12-31

Contract Duration: 958 days

Daily Burn Rate: $19.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 11

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: PHASE I

Place of Performance

Location: MARLBOROUGH, MIDDLESEX County, MASSACHUSETTS, 01752

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $19.0 million to XCELLEREX, INC. for work described as: PHASE I Key points: 1. The contract's value of approximately $19 million over its duration suggests a significant investment in specialized research and development. 2. Competition was moderate, with 11 bids received, indicating a reasonable level of market interest but potential for improved price discovery. 3. The cost-plus-fixed-fee (CPFF) contract type carries inherent risk of cost overruns, requiring diligent oversight. 4. Performance context is limited due to the nature of R&D, making direct comparisons to similar completed projects challenging. 5. This contract falls within the broader 'Research and Development in the Physical, Engineering, and Life Sciences' sector, a critical area for technological advancement. 6. The contract was awarded under a definitive contract vehicle, suggesting a structured procurement process.

Value Assessment

Rating: fair

Benchmarking the value of this R&D contract is challenging due to the specialized nature of the work and the lack of publicly available cost breakdowns. However, the fixed-fee component of the CPFF structure provides some cost control. Compared to other large-scale R&D efforts, the total award value appears within a reasonable range for complex scientific endeavors. Further analysis would require access to detailed cost performance reports and comparisons with similar research projects funded by the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with 11 bids received. This level of competition is generally positive, suggesting that multiple capable vendors were aware of and interested in the opportunity. A higher number of bidders could potentially lead to more competitive pricing and a wider range of technical approaches. The presence of 11 bidders indicates a healthy, albeit not intensely competitive, market for this type of R&D service.

Taxpayer Impact: The full and open competition with a substantial number of bidders is beneficial for taxpayers, as it increases the likelihood of securing the best value and encourages contractors to offer competitive pricing to win the award.

Public Impact

The primary beneficiaries are likely the Department of Defense and potentially broader scientific communities through the dissemination of research findings. The contract supports research and development in physical, engineering, and life sciences, aiming to advance technological capabilities. The geographic impact is primarily within Massachusetts, where the contractor is located, but the research outcomes could have national implications. Workforce implications include employment for scientists, engineers, and support staff involved in the R&D activities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can incentivize cost overruns if not managed closely.
The R&D nature of the contract makes performance metrics and success criteria inherently uncertain.
Limited public data on specific deliverables hinders independent assessment of progress and value.

Positive Signals

Awarded under full and open competition, indicating a broad search for qualified contractors.
The definitive contract award suggests a structured and compliant procurement process.
The contract duration of nearly two years allows for substantial research progress.

Sector Analysis

This contract falls under the broad category of Research and Development in the Physical, Engineering, and Life Sciences (NAICS 541710). This sector is crucial for national security and technological innovation, encompassing a wide range of scientific inquiry and application. Spending in this area is often characterized by long lead times, high upfront investment, and uncertain outcomes. Comparable spending benchmarks are difficult to establish without knowing the specific research focus, but significant government investment is typical for cutting-edge R&D projects.

Small Business Impact

The contract details do not indicate any specific small business set-aside provisions, nor is there information suggesting subcontracting goals for small businesses. Given the nature of advanced R&D, it is possible that the prime contractor may possess specialized capabilities that limit subcontracting opportunities. Further investigation into the contractor's subcontracting plan would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. Accountability measures are embedded within the contract terms, particularly the cost-plus-fixed-fee structure which requires detailed reporting and justification of costs. Transparency is limited by the proprietary nature of R&D, but contract award data is publicly available.

Related Government Programs

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

Risk Flags

Cost-plus-fixed-fee contract type may lead to cost overruns if not managed properly.
R&D contracts inherently carry uncertainty regarding outcomes and timelines.
Limited public detail on specific deliverables and performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.0 million to XCELLEREX, INC.. PHASE I

Who is the contractor on this award?

The obligated recipient is XCELLEREX, 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 $19.0 million.

What is the period of performance?

Start: 2007-05-18. End: 2009-12-31.

What is Xcellerex, Inc.'s track record with government contracts, particularly within the R&D sector?

Information regarding Xcellerex, Inc.'s specific track record with government contracts, especially within the R&D sector, is not detailed in the provided data. A comprehensive analysis would require accessing contract databases like FPDS or SAM.gov to review past awards, performance ratings, and any history of contract modifications or disputes. Understanding their experience with similar contract types (e.g., CPFF) and research areas would provide crucial context for assessing their capability and reliability on this specific $19 million award.

How does the $19 million contract value compare to other DoD R&D contracts in physical sciences?

The $19 million contract value for R&D in physical sciences is a substantial but not extraordinary amount for the Department of Defense. DoD R&D spending spans a wide spectrum, from small, targeted research grants to multi-billion dollar programs. Contracts in the tens of millions are common for specific research projects or phases. To provide a precise comparison, one would need to analyze the average and median award values for contracts under NAICS code 541710 awarded by the DoD over a similar period, considering factors like contract duration and specific research focus.

What are the key performance indicators (KPIs) and milestones for this R&D contract?

The provided data does not specify the key performance indicators (KPIs) or milestones for this particular R&D contract. R&D contracts typically define success through a series of technical milestones, deliverables (e.g., reports, prototypes, data sets), and adherence to research objectives. The effectiveness of oversight would depend on how well these KPIs and milestones were defined in the contract statement of work and how rigorously they were monitored by the contracting officer and technical representatives throughout the contract's performance period.

What is the potential for cost overruns in this Cost Plus Fixed Fee (CPFF) contract?

Cost Plus Fixed Fee (CPFF) contracts, by their nature, carry a risk of cost overruns. While the contractor is reimbursed for allowable costs, the fixed fee is predetermined. This structure can incentivize contractors to manage costs to maximize their profit margin (the fee). However, if unforeseen technical challenges arise or the scope of work expands significantly, the government may incur higher costs than initially anticipated. Effective oversight, detailed cost tracking, and proactive management of scope changes are crucial to mitigate this risk.

What is the historical spending trend for R&D in physical, engineering, and life sciences by the Department of Defense?

The Department of Defense consistently allocates significant funding towards Research and Development across physical, engineering, and life sciences. Historical spending trends show a sustained and often increasing investment in these areas, driven by the need for technological superiority and national security. While specific figures fluctuate annually based on budget appropriations and strategic priorities, R&D in these scientific domains remains a core component of the DoD's budget, reflecting its critical importance for future defense capabilities.

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 › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 11

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Electric Company (UEI: 001367960)

Address: 170 LOCKE DR, MARLBOROUGH, MA, 01752

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $19,105,592

Exercised Options: $19,105,592

Current Obligation: $18,986,551

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline