DoD awards RAND Corporation $6.4M for R&D services, raising questions on competition and value
Contract Overview
Contract Amount: $6,420,500 ($6.4M)
Contractor: THE Rand Corporation
Awarding Agency: Department of Defense
Start Date: 2025-11-19
End Date: 2027-12-17
Contract Duration: 758 days
Daily Burn Rate: $8.5K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: RAND NDRI RESEARCH AND DEVELOPMENT SERVICES
Place of Performance
Location: SANTA MONICA, LOS ANGELES County, CALIFORNIA, 90401
Plain-Language Summary
Department of Defense obligated $6.4 million to THE RAND CORPORATION for work described as: RAND NDRI RESEARCH AND DEVELOPMENT SERVICES Key points: 1. Contract awarded on a sole-source basis, limiting potential cost savings from competition. 2. Pricing and value for money require further scrutiny due to lack of competitive bidding. 3. Performance risk is moderate, given RAND's established role in research and development. 4. This contract supports critical research and development functions within the Department of Defense. 5. The contract falls within the broad professional, scientific, and technical services sector.
Value Assessment
Rating: fair
The contract value of $6.4 million for approximately 2.5 years of service appears reasonable for specialized R&D. However, without competitive benchmarking, it's difficult to definitively assess value for money. RAND is a well-known entity in this space, suggesting their rates may be at the higher end of the market. A comparison to similar sole-source R&D contracts awarded by DoD or other agencies would be necessary for a more robust assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded using a sole-source justification, meaning it was not competed. This approach is typically used when only one responsible source is available or authorized by statute. The lack of competition means that taxpayers did not benefit from the price discovery and potential cost reductions that a competitive bidding process could have provided. It also limits the government's ability to explore a wider range of innovative solutions from different providers.
Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's leverage in negotiating favorable terms and ensures that only one company's proposed pricing is considered.
Public Impact
The Department of Defense benefits from specialized research and development services to support its mission. This contract enables the continuation of critical R&D projects that may inform future defense strategies and technologies. The primary beneficiaries are the DoD's research arms and decision-makers who rely on objective analysis. Work is likely to be performed by highly skilled researchers and analysts, contributing to the specialized workforce in R&D.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may result in suboptimal pricing for taxpayers.
- Sole-source nature limits opportunities for emerging or specialized R&D firms.
- Transparency regarding the specific R&D objectives and outcomes could be enhanced.
Positive Signals
- Award to RAND Corporation leverages a known entity with extensive experience in R&D.
- Contract duration provides stability for critical research initiatives.
- Focus on R&D aligns with the DoD's need for technological advancement.
Sector Analysis
The professional, scientific, and technical services sector is a significant part of federal spending, encompassing a wide range of expertise. This contract falls under the 'All Other Professional, Scientific, and Technical Services' NAICS code (541990). The Department of Defense is a major consumer of these services, utilizing them for research, analysis, engineering, and consulting. Comparable spending in this sector often involves contracts for specialized studies, system development, and scientific research, with values varying widely based on scope and duration.
Small Business Impact
This contract does not appear to have a small business set-aside. Given the sole-source nature and the specialized R&D focus, it is unlikely that subcontracting opportunities for small businesses will be a primary consideration unless specifically mandated. The absence of a set-aside means that the primary contract is not directly aimed at fostering small business participation.
Oversight & Accountability
Oversight for this contract would typically fall under the purview of the Department of Defense's contracting and program management offices. The Washington Headquarters Services (WHS) is listed as the servicing agency, implying their role in administration. Transparency could be improved by making the specific justification for the sole-source award publicly accessible and detailing the performance metrics and deliverables. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.
Related Government Programs
- Department of Defense Research and Development Programs
- Professional, Scientific, and Technical Services Contracts
- RAND Corporation Federal Contracts
- Sole-Source Contract Awards
Risk Flags
- Sole-source award lacks competitive justification.
- Potential for inflated pricing due to lack of competition.
- Limited transparency on specific R&D objectives and outcomes.
Tags
department-of-defense, research-and-development, the-rand-corporation, sole-source, professional-scientific-and-technical-services, delivery-order, cost-plus-fixed-fee, washington-headquarters-services, california, all-other-professional-scientific-and-technical-services
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $6.4 million to THE RAND CORPORATION. RAND NDRI 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 $6.4 million.
What is the period of performance?
Start: 2025-11-19. End: 2027-12-17.
What is the specific justification for awarding this contract on a sole-source basis to The RAND Corporation?
The provided data indicates the contract was awarded as 'NOT COMPETED'. Typically, sole-source awards require a justification, such as the unique capabilities of the contractor, a critical need that cannot be met by other sources, or specific statutory authority. For The RAND Corporation, justifications often stem from their long-standing role as a federally funded research and development center (FFRDC) and their unique expertise in national security and public policy research. A detailed review of the contract's justification document (often a Justification for Other Than Full and Open Competition - JOFOC) would be necessary to understand the precise rationale for this specific award and confirm it aligns with federal procurement regulations.
How does the $6.4 million contract value compare to RAND's typical R&D contract values with the DoD?
To accurately compare, historical data on RAND's contracts with the DoD would be needed. However, $6.4 million for a period of approximately 2.5 years (from late 2025 to late 2027) suggests a moderate-sized engagement. RAND, as an FFRDC, often handles large-scale, complex research projects that can range from millions to tens of millions of dollars annually. This specific contract's value should be assessed in the context of the scope of work. If it involves foundational research or strategic analysis, the value might be standard. If it's for a specific, limited-scope project, it could be considered substantial. Benchmarking against other sole-source R&D awards of similar duration and complexity to other FFRDCs or research institutions would provide further context.
What are the primary risks associated with awarding R&D services on a sole-source basis?
The primary risks of sole-source R&D awards include potential overpayment due to the absence of competitive pricing pressure, limited access to innovative solutions that might be offered by other firms, and a reduced incentive for the awarded contractor to optimize efficiency. There's also a risk of 'contractor lock-in,' where the government becomes overly reliant on a single provider, making future transitions difficult or costly. Furthermore, the lack of transparency inherent in sole-source justifications can sometimes mask underlying issues or lead to perceptions of favoritism, potentially eroding public trust. Ensuring robust oversight and clear performance metrics becomes even more critical in sole-source scenarios.
What specific R&D services will The RAND Corporation provide under this contract?
The provided data indicates the contract is for 'RAND NDRI RESEARCH AND DEVELOPMENT SERVICES' under NAICS code 541990 ('All Other Professional, Scientific, and Technical Services'). This broad classification suggests the services could encompass a wide array of R&D activities, potentially including policy analysis, systems research, technology assessment, strategic planning, and scientific studies relevant to national defense. Without access to the contract's statement of work (SOW) or performance work statement (PWS), the precise nature of the R&D services remains undefined. These documents would detail the specific objectives, tasks, deliverables, and expected outcomes.
What is the historical spending trend for similar R&D services within the Department of Defense?
The Department of Defense is consistently one of the largest federal spenders on Research and Development, allocating billions of dollars annually across various research areas, from basic science to advanced weapons systems. Spending trends in R&D services are influenced by geopolitical factors, technological advancements, and strategic priorities. While this specific $6.4 million contract is a small fraction of the overall DoD R&D budget, it represents a commitment to specialized analytical and research capabilities. Historical data would likely show a steady or increasing investment in R&D services to maintain technological superiority, with fluctuations based on specific program needs and budget allocations.
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: $6,420,500
Exercised Options: $6,420,500
Current Obligation: $6,420,500
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: 2025-11-19
Current End Date: 2027-12-17
Potential End Date: 2027-12-17 00:00:00
Last Modified: 2025-12-15
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