DoD awards $39.4M R&D contract to RAND Corp for technical services, raising competition concerns
Contract Overview
Contract Amount: $39,403,017 ($39.4M)
Contractor: THE Rand Corporation
Awarding Agency: Department of Defense
Start Date: 2025-06-06
End Date: 2027-08-05
Contract Duration: 790 days
Daily Burn Rate: $49.9K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: RESEARCH AND DEVELOPMENT SERVICES
Place of Performance
Location: SANTA MONICA, LOS ANGELES County, CALIFORNIA, 90401
Plain-Language Summary
Department of Defense obligated $39.4 million to THE RAND CORPORATION for work described as: RESEARCH AND DEVELOPMENT SERVICES Key points: 1. Significant contract value for specialized R&D services. 2. Sole-source award to a single, well-known research institution. 3. Potential for limited competition impacting price discovery. 4. Focus on professional, scientific, and technical services within the defense sector.
Value Assessment
Rating: questionable
The contract's cost-plus-fixed-fee structure requires careful monitoring to ensure costs remain reasonable and the fixed fee aligns with the scope of work. Benchmarking against similar R&D service contracts is crucial.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and may not leverage the full range of available expertise, potentially leading to higher costs than a competitive process.
Taxpayer Impact: The lack of competition for this $39.4M contract means taxpayers may not be receiving the best possible value, as alternative providers were not considered.
Public Impact
Taxpayers may be paying a premium due to the absence of competitive bidding. The RAND Corporation's established reputation may justify the sole-source award, but transparency on the justification is key. Future R&D needs could be met more cost-effectively through competitive solicitations. The specific nature of the 'All Other Professional, Scientific, and Technical Services' requires clear definition to assess value.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- Sole-source justification unclear
Positive Signals
- Award to reputable institution
- Long-term service provision
Sector Analysis
This contract falls within the broad category of professional, scientific, and technical services, often utilized by the Department of Defense for specialized research and analysis. Benchmarks for similar R&D services can vary widely based on scope and expertise.
Small Business Impact
The awardee, The RAND Corporation, is a large research institution, and there is no indication that small businesses were involved in this specific contract as subcontractors or partners.
Oversight & Accountability
Oversight will be critical to ensure the cost-plus-fixed-fee structure is managed effectively and that the fixed fee remains appropriate for the services rendered. The justification for the sole-source award should be thoroughly documented and reviewed.
Related Government Programs
- All Other Professional, Scientific, and Technical Services
- Department of Defense Contracting
- Washington Headquarters Services Programs
Risk Flags
- Lack of competitive bidding
- Potential for cost overruns in cost-plus contracts
- Limited transparency on sole-source justification
- No small business participation indicated
Tags
all-other-professional-scientific-and-te, department-of-defense, ca, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $39.4 million to THE RAND CORPORATION. RESEARCH AND DEVELOPMENT SERVICES
Who is the contractor on this award?
The obligated recipient is THE RAND CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Washington Headquarters Services).
What is the total obligated amount?
The obligated amount is $39.4 million.
What is the period of performance?
Start: 2025-06-06. End: 2027-08-05.
What specific R&D services are being procured, and how does their unique nature justify a sole-source award?
The contract covers 'All Other Professional, Scientific, and Technical Services.' Without further details on the specific research objectives, it is difficult to definitively assess the justification for a sole-source award. Typically, sole-source awards are reserved for situations where only one source possesses the unique capability or expertise required, or in cases of urgent and compelling need. A detailed justification should outline these specific circumstances.
What is the estimated total cost, and how does the fixed fee compare to industry standards for similar R&D projects?
The contract has an award amount of $39,403,017. As a cost-plus-fixed-fee contract, the total cost will be the actual allowable costs incurred plus a predetermined fixed fee. Benchmarking the fixed fee against similar R&D contracts is essential to determine if it is reasonable and reflects the level of risk and effort involved for the contractor.
What mechanisms are in place to ensure effective oversight and accountability for this sole-source, cost-plus-fixed-fee contract?
Effective oversight requires robust contract management by the Department of Defense. This includes regular reviews of incurred costs, performance monitoring against defined milestones, and ensuring adherence to the scope of work. The fixed fee should be periodically reviewed for appropriateness. Clear communication channels and reporting requirements are vital for accountability.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services
Product/Service Code: SPECIAL STUDIES/ANALYSIS, NOT R&D › SPECIAL STUDIES - NOT R and D
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 1776 MAIN ST, SANTA MONICA, CA, 90401
Business Categories: Category Business, Corporate Entity Tax Exempt, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $39,403,017
Exercised Options: $39,403,017
Current Obligation: $39,403,017
Subaward Activity
Number of Subawards: 3
Total Subaward Amount: $284,991
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: HQ003421D0006
IDV Type: IDC
Timeline
Start Date: 2025-06-06
Current End Date: 2027-08-05
Potential End Date: 2027-08-05 00:00:00
Last Modified: 2025-09-26
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