DoD's Missile Defense Agency awards $31.6M R&D contract for safety services to ARES Technical Services

Contract Overview

Contract Amount: $31,603,056 ($31.6M)

Contractor: Ares Technical Services Corporation

Awarding Agency: Department of Defense

Start Date: 2020-12-14

End Date: 2026-06-13

Contract Duration: 2,007 days

Daily Burn Rate: $15.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: PERFORM A WIDE VARIETY OF PROFESSIONAL SAFETY SERVICES.

Place of Performance

Location: BURLINGAME, SAN MATEO County, CALIFORNIA, 94010

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $31.6 million to ARES TECHNICAL SERVICES CORPORATION for work described as: PERFORM A WIDE VARIETY OF PROFESSIONAL SAFETY SERVICES. Key points: 1. Contract focuses on specialized safety services within R&D, indicating a need for expert support in complex technical environments. 2. The contract's duration of over 2000 days suggests a long-term requirement for ongoing safety oversight and management. 3. A 'full and open competition after exclusion of sources' indicates a competitive process, though with specific source exclusions. 4. The cost-plus-fixed-fee (CPFF) structure allows for flexibility in R&D but requires careful monitoring of costs to ensure value. 5. Performance is located in California, a hub for aerospace and defense activities, suggesting alignment with industry concentrations. 6. The contract's classification under R&D (NAICS 541715) highlights its role in advancing scientific and technical capabilities.

Value Assessment

Rating: good

The contract value of $31.6 million over approximately 6.5 years averages to about $4.86 million annually. Benchmarking this against similar R&D safety service contracts is challenging due to the specialized nature of missile defense. However, the CPFF structure, while common for R&D, necessitates diligent oversight to ensure costs remain reasonable and do not escalate beyond the fixed fee. The absence of a specific total contract value and the presence of a 'definitive contract' type suggest potential for modifications and adjustments, which will be key to assessing overall value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'full and open competition after exclusion of sources.' This implies that while the competition was broadly advertised, certain sources were intentionally excluded from consideration. The number of bidders is not explicitly stated, but the exclusion suggests a tailored approach to ensure specific capabilities were met. This type of competition can sometimes lead to fewer bidders than a truly open process, potentially impacting price discovery.

Taxpayer Impact: While a competitive process was employed, the exclusion of certain sources may have limited the full breadth of competition, potentially impacting the most favorable pricing for taxpayers.

Public Impact

The primary beneficiaries are the Department of Defense and its Missile Defense Agency, ensuring the safety and operational readiness of critical defense systems. Services delivered include professional safety support essential for research and development activities, likely encompassing risk assessments, safety protocols, and compliance. The geographic impact is concentrated in California, a key state for defense contracting and technological innovation. Workforce implications include the employment of specialized safety professionals and technical personnel required to support advanced R&D projects.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Fixed Fee (CPFF) contracts, especially in complex R&D environments.
The 'exclusion of sources' in the competition may limit the number of qualified bidders, potentially affecting price competitiveness.
Long contract duration increases the risk of scope creep or evolving requirements not fully captured in the initial pricing.
Reliance on a single contractor for critical safety services necessitates robust performance monitoring and quality assurance.

Positive Signals

Award to ARES Technical Services Corporation, a known entity in defense contracting, suggests a level of established capability.
The contract is a definitive contract, allowing for flexibility in addressing evolving R&D needs while maintaining a structured framework.
The Missile Defense Agency's focus on safety underscores a commitment to operational integrity and personnel well-being in high-risk R&D.
The contract falls under R&D, indicating investment in future technological advancements critical for national security.

Sector Analysis

The contract operates within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. This segment of the federal market is characterized by innovation, long project cycles, and the need for highly specialized expertise. Spending in this area is crucial for maintaining a technological edge. Comparable spending benchmarks are difficult to establish precisely due to the niche nature of missile defense safety services, but the overall R&D spending by the DoD is substantial, reflecting its commitment to advanced capabilities.

Small Business Impact

This contract does not appear to have a small business set-aside (SS is false, SB is false). Therefore, the primary contractor, ARES Technical Services Corporation, is likely responsible for managing subcontracting opportunities. The extent to which small businesses will participate through subcontracting is not detailed in the provided data, but it represents a potential avenue for small business involvement in specialized R&D support services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense and the Missile Defense Agency. As a definitive contract, it likely includes specific reporting requirements and performance metrics. The CPFF structure necessitates close financial oversight to manage costs against the fixed fee. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Missile Defense Systems R&D
Aerospace Safety Services
Department of Defense Research Contracts
Federal R&D Safety Compliance
Advanced Technology Development Contracts

Risk Flags

Potential for cost escalation in CPFF contract
Limited competition due to source exclusion
Long contract duration increases risk exposure
Reliance on contractor for critical safety functions

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.6 million to ARES TECHNICAL SERVICES CORPORATION. PERFORM A WIDE VARIETY OF PROFESSIONAL SAFETY SERVICES.

Who is the contractor on this award?

The obligated recipient is ARES TECHNICAL SERVICES CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Missile Defense Agency).

What is the total obligated amount?

The obligated amount is $31.6 million.

What is the period of performance?

Start: 2020-12-14. End: 2026-06-13.

What is the track record of ARES Technical Services Corporation with the Department of Defense, particularly in R&D safety services?

ARES Technical Services Corporation has a history of contracting with the Department of Defense, often providing technical and engineering support services. While specific details on their track record in R&D safety services for the Missile Defense Agency are not fully elaborated in the provided data, their presence as a contractor suggests they possess the requisite qualifications and experience. Further analysis would involve reviewing their past performance evaluations, contract history with DoD agencies, and any specialized certifications or accreditations relevant to safety in complex R&D environments, particularly those involving missile defense technologies. Their ability to secure this definitive contract indicates a positive assessment of their capabilities by the awarding agency.

How does the annual cost of this contract compare to similar R&D safety service contracts within the defense sector?

Direct comparison of the annual cost of this $31.6 million contract (averaging approximately $4.86 million per year) to similar R&D safety service contracts is challenging due to the highly specialized nature of missile defense and the unique requirements of the Missile Defense Agency. The federal R&D landscape is diverse, with varying levels of complexity, risk, and required expertise. Contracts for safety services in areas like aerospace, cybersecurity R&D, or advanced materials research may have different cost structures. The CPFF (Cost Plus Fixed Fee) nature of this contract also influences its cost profile, allowing for flexibility but requiring careful management. Benchmarking would ideally involve analyzing contracts with similar scope, duration, and technical demands, considering factors like the number of personnel, specific safety disciplines required, and the criticality of the R&D projects supported.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract structure in an R&D context?

The primary risks associated with a CPFF contract in an R&D context, such as this one for the Missile Defense Agency, revolve around cost control and potential for overruns. While the fixed fee provides the contractor with an incentive to control costs efficiently, the 'cost-plus' element means the government reimburses allowable costs. In R&D, where requirements can be uncertain and technical challenges unpredictable, costs can escalate beyond initial projections. This necessitates robust government oversight to scrutinize incurred costs, ensure they are reasonable and allocable to the contract, and prevent scope creep that inflates the cost base. The contractor bears the risk of not exceeding the agreed-upon cost ceiling without incurring losses on their fixed fee, but the government risks paying more than anticipated if costs are not managed effectively.

How effective are the 'exclusion of sources' clauses in ensuring specialized capabilities while maintaining competitive pricing?

Exclusion of sources clauses in federal contracting are intended to ensure that only offerors possessing highly specific, critical capabilities are considered for a particular requirement. In the context of advanced R&D for missile defense, this can be effective in securing contractors with unique expertise, proprietary technology, or specialized security clearances essential for the mission. However, this approach inherently limits the pool of potential bidders. While it ensures a baseline of necessary qualifications, it can also reduce overall competition, potentially leading to higher prices than might be achieved in a broader, unrestricted competition. The effectiveness for taxpayers hinges on whether the specialized capabilities secured justify any potential increase in cost and whether the competition among the remaining qualified sources is still robust enough to drive reasonable pricing.

What are the historical spending patterns for professional safety services within the Missile Defense Agency or similar R&D programs?

Historical spending patterns for professional safety services within the Missile Defense Agency (MDA) or comparable R&D programs are not directly available in the provided data. However, the MDA's mission involves highly complex and potentially hazardous research, development, and testing of advanced missile defense systems. This inherently requires significant investment in safety services to ensure personnel, facilities, and program integrity. Spending in this area would likely fluctuate based on the phase of development, the scale of testing activities, and evolving regulatory requirements. Analyzing past MDA budgets or similar agency R&D safety procurements would provide context, but such data typically requires access to specialized federal procurement databases or historical budget reports. The $31.6 million awarded here suggests a substantial, long-term commitment to safety within this specific R&D effort.

What are the implications of the contract's long duration (over 2000 days) for performance management and risk mitigation?

The long duration of this contract, exceeding 2000 days (approximately 5.5 years), has significant implications for performance management and risk mitigation. For performance management, it necessitates a sustained focus on monitoring contractor progress against milestones, ensuring consistent quality of safety services, and adapting to any changes in requirements or operational environments over an extended period. Robust communication channels and regular performance reviews are crucial. From a risk mitigation perspective, the extended timeline increases the potential for unforeseen challenges, such as technological obsolescence, shifts in strategic priorities, or personnel turnover within the contractor's team. Proactive risk identification and mitigation strategies, including contingency planning and flexible contract modifications, become paramount to ensure the contract remains effective and delivers value throughout its lifecycle.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HQ085820R0003

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1440 CHAPIN AVE STE 390, BURLINGAME, CA, 94010

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

Financial Breakdown

Contract Ceiling: $52,997,838

Exercised Options: $39,354,897

Current Obligation: $31,603,056

Actual Outlays: $15,204,763

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline