DoD's $150M R&D Contract with SPA Inc. Faces Scrutiny Over Value and Competition

Contract Overview

Contract Amount: $150,174,698 ($150.2M)

Contractor: Systems Planning and Analysis, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-07-07

End Date: 2026-01-15

Contract Duration: 1,653 days

Daily Burn Rate: $90.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: RESEARCH DEVELOPMENT TEST AND EVALUATION SCIENTIFIC AND TECHNICAL ADVISORY AND ASSISTANCE SERVICES

Place of Performance

Location: FORT BELVOIR, FAIRFAX County, VIRGINIA, 22060

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $150.2 million to SYSTEMS PLANNING AND ANALYSIS, INC. for work described as: RESEARCH DEVELOPMENT TEST AND EVALUATION SCIENTIFIC AND TECHNICAL ADVISORY AND ASSISTANCE SERVICES Key points: 1. The contract's value of $150M for R&D services is significant, requiring careful assessment of deliverables. 2. Full and open competition was cited, but the specific impact on price discovery needs examination. 3. Potential risks include cost overruns and ensuring the scientific and technical advisory services meet evolving defense needs. 4. The IT sector, particularly R&D within it, is a high-spending area for the government.

Value Assessment

Rating: fair

The contract's Cost Plus Fixed Fee (CPFF) structure can lead to cost overruns if not managed tightly. Benchmarking against similar R&D contracts is difficult due to the specialized nature of the services, but the $150M value warrants close monitoring.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which theoretically promotes competitive pricing. However, the effectiveness of this competition in achieving optimal price discovery for specialized R&D services requires further analysis.

Taxpayer Impact: Taxpayer funds are being utilized for critical defense research and development. Ensuring the best value is achieved through effective competition and oversight is paramount to responsible spending.

Public Impact

This contract supports critical research and development for the Defense Threat Reduction Agency, potentially impacting national security. The significant funding allocated could influence innovation and technological advancements within the defense sector. Transparency in the contract's execution and outcomes will be crucial for public trust and accountability.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns with CPFF contract type.
Ensuring effective price discovery under full and open competition for specialized R&D.
Measuring the true value and impact of R&D services against taxpayer investment.

Positive Signals

Contract awarded under full and open competition.
Supports critical defense research and development objectives.

Sector Analysis

This contract falls within the Research and Development in the Physical, Engineering, and Life Sciences sector, a significant area of government spending. Benchmarks for R&D contracts vary widely based on scope and complexity, but $150M represents a substantial investment.

Small Business Impact

The provided data does not indicate any specific provisions or set-asides for small businesses in this contract. Further investigation would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight will be critical to ensure the contractor meets performance requirements and that costs remain within reasonable bounds. The Defense Contract Management Agency (DCMA) typically oversees such contracts, focusing on performance and financial accountability.

Related Government Programs

Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
Department of Defense Contracting
Defense Threat Reduction Agency Programs

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type increases risk of cost overruns.
Complexity of R&D services makes benchmarking and value assessment challenging.
Ensuring effective price discovery and competition throughout the contract lifecycle.
Measuring the tangible impact and return on investment for taxpayer funds.
Potential for scope creep without rigorous oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $150.2 million to SYSTEMS PLANNING AND ANALYSIS, INC.. RESEARCH DEVELOPMENT TEST AND EVALUATION SCIENTIFIC AND TECHNICAL ADVISORY AND ASSISTANCE SERVICES

Who is the contractor on this award?

The obligated recipient is SYSTEMS PLANNING AND ANALYSIS, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $150.2 million.

What is the period of performance?

Start: 2021-07-07. End: 2026-01-15.

How will the effectiveness and impact of the R&D services be measured to ensure they align with the $150M investment and evolving defense needs?

Effectiveness will likely be measured through defined milestones, deliverables, and technical reviews outlined in the contract. The Defense Threat Reduction Agency (DTRA) will need robust program management to track progress, assess the scientific and technical merit of the research, and ensure the outcomes directly contribute to their mission objectives and adapt to changing threat landscapes.

What specific mechanisms are in place to mitigate the risk of cost overruns inherent in a Cost Plus Fixed Fee (CPFF) contract for complex R&D?

Mitigation strategies for CPFF contracts typically include stringent oversight of contractor expenditures, regular audits, and clearly defined fixed-fee targets tied to performance metrics. The agency must actively manage the scope of work and promptly address any deviations to prevent uncontrolled cost escalation. Independent cost reviews and competitive re-evaluation of future phases can also serve as controls.

Beyond the initial 'full and open competition,' how can the agency ensure continued competitive pressure and value for money throughout the contract's duration?

Continued competitive pressure can be fostered through phased contract approaches with re-competition at key junctures, or by encouraging contractor innovation that leads to cost savings or improved performance. Robust performance monitoring and the potential for incentive fees tied to exceeding targets can also drive value. Transparency in reporting and periodic market research can inform future contracting strategies.

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: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HDTRA120R0005

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 2001 N BEAUREGARD ST., SUITE 100, ALEXANDRIA, VA, 22311

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

Financial Breakdown

Contract Ceiling: $217,821,867

Exercised Options: $181,241,922

Current Obligation: $150,174,698

Actual Outlays: $59,533,441

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $24,958,379

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline