DoD's $12.7M R&D contract with Boeing for physical sciences research shows fair value, but limited competition concerns

Contract Overview

Contract Amount: $12,672,488 ($12.7M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2008-02-21

End Date: 2009-02-20

Contract Duration: 365 days

Daily Burn Rate: $34.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: SYSTEM F6

Place of Performance

Location: HUNTINGTON BEACH, ORANGE County, CALIFORNIA, 92647

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $12.7 million to THE BOEING COMPANY for work described as: SYSTEM F6 Key points: 1. Contract awarded through full and open competition, indicating a broad search for qualified vendors. 2. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not managed closely. 3. Performance period of 365 days suggests a focused research and development effort. 4. The specific NAICS code (541712) points to specialized R&D in physical, engineering, and life sciences. 5. Awarded by the Defense Contract Management Agency, suggesting a focus on defense-related research. 6. The contract value is moderate, but benchmarking against similar R&D efforts is crucial for assessing value.

Value Assessment

Rating: good

The contract value of approximately $12.7 million for a one-year R&D effort appears reasonable within the context of specialized defense research. While specific comparable contracts are not provided, the fixed fee component suggests a degree of cost control. Benchmarking against other R&D contracts of similar scope and complexity would provide a more definitive assessment of value for money. The absence of detailed performance metrics makes a precise value judgment challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically involves a broad solicitation to all eligible responsible sources. This suggests that multiple bidders likely had the opportunity to compete. The presence of six bidders (no) indicates a healthy level of interest and competition for this R&D requirement. This competitive environment is generally favorable for price discovery and achieving a fair market price.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best possible research outcomes at a reasonable cost. The multiple bids suggest that the government received a range of technical approaches and pricing, leading to a more informed selection.

Public Impact

The primary beneficiaries are likely the Department of Defense, which will receive advancements in physical, engineering, or life sciences research. The services delivered are specialized research and development, contributing to technological innovation. The geographic impact is primarily within the United States, where the research is conducted and its findings applied. Workforce implications include employment for scientists, engineers, and support staff involved in the R&D process.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize cost overruns if not rigorously monitored.
The specific R&D outcomes and their direct applicability to defense needs require ongoing assessment.
Limited public information on the specific research objectives makes it difficult to gauge the full impact.

Positive Signals

Awarded through full and open competition, ensuring a wide pool of potential offerors.
The presence of multiple bidders (6) suggests a competitive marketplace for this type of R&D.
The contract is for research and development, which is critical for technological advancement.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences (NAICS 541712). This sector is characterized by innovation and intellectual property generation. Defense R&D spending is a significant component of the overall R&D market, driving advancements in military technology and capabilities. Comparable spending benchmarks would involve analyzing other DoD R&D contracts in similar scientific domains.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss=false, sb=false). As a large contract awarded to a major defense contractor, it is unlikely to have significant direct subcontracting opportunities for small businesses unless explicitly mandated or pursued by the prime contractor. The focus is on large-scale R&D capabilities rather than small business ecosystem development.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures would include adherence to contract terms, delivery of research milestones, and financial reporting. Transparency is facilitated through contract databases, though specific research details may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

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

Risk Flags

Cost Plus Fixed Fee contract type carries inherent risk of cost escalation.
Limited public detail on specific research objectives hinders full impact assessment.
Contractor's historical performance on similar CPFF R&D contracts requires deeper analysis.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.7 million to THE BOEING COMPANY. SYSTEM F6

Who is the contractor on this award?

The obligated recipient is THE BOEING COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $12.7 million.

What is the period of performance?

Start: 2008-02-21. End: 2009-02-20.

What is the track record of The Boeing Company in delivering on similar Cost Plus Fixed Fee R&D contracts for the Department of Defense?

The Boeing Company has a long and extensive history of performing complex research and development contracts for the Department of Defense, including those utilizing Cost Plus Fixed Fee (CPFF) pricing structures. CPFF contracts are common for R&D where the final costs are uncertain. Boeing's track record generally includes successful delivery on many high-profile defense programs. However, like any large contractor, they have also faced scrutiny and challenges on specific contracts related to cost growth, schedule delays, or performance issues. A detailed analysis would require examining specific past CPFF R&D contracts with the DoD, looking at their final costs versus initial estimates, adherence to timelines, and the successful achievement of technical objectives. Without access to detailed performance data for Boeing's specific R&D portfolio, a definitive assessment of their track record on similar contracts remains broad.

How does the $12.7 million contract value compare to the average cost of similar R&D projects in physical sciences for the DoD?

Benchmarking the $12.7 million contract value against the average cost of similar R&D projects in physical sciences for the DoD requires access to comprehensive historical contract data. The NAICS code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology),' covers a broad spectrum of research. The average cost can vary significantly based on the specific discipline (e.g., materials science, physics, aerospace engineering), the project's complexity, the duration, and the level of innovation required. Generally, R&D contracts can range from a few hundred thousand dollars for exploratory studies to hundreds of millions for large-scale technology development programs. A $12.7 million contract for a one-year effort suggests a moderately sized project, likely beyond initial feasibility studies but not a full-scale system development. To provide a precise comparison, one would need to filter DoD contract databases for similar NAICS codes, contract types (like CPFF), and performance periods, then calculate the average value.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D, and how are they mitigated in this case?

The primary risk with Cost Plus Fixed Fee (CPFF) contracts, especially for R&D, is the potential for cost overruns. The contractor is reimbursed for all allowable costs incurred, plus a fixed fee representing profit. If costs escalate beyond initial projections, the government bears the burden, while the contractor's profit remains fixed. This can reduce the incentive for the contractor to control costs rigorously. Mitigation strategies employed by the government typically include robust oversight by contracting officers and technical representatives, detailed cost accounting standards, regular audits, and clearly defined performance metrics. For this specific contract, the fixed fee component provides some incentive for efficiency, and the Defense Contract Management Agency (DCMA) would be responsible for monitoring expenditures and ensuring compliance with cost principles. However, the effectiveness of mitigation hinges on the quality of oversight and the contractor's commitment to cost control.

Given the 'full and open competition' award, what does the presence of six bidders suggest about the market for this type of specialized R&D?

The fact that this contract was awarded under 'full and open competition' and attracted six bidders suggests a reasonably competitive market for this specific type of specialized R&D within the physical, engineering, and life sciences domain. 'Full and open competition' implies that the solicitation was broadly advertised, allowing any responsible source to submit an offer. The six bids indicate that there are multiple companies possessing the necessary technical expertise, facilities, and resources to undertake such research for the Department of Defense. This level of competition is generally positive, as it increases the likelihood that the government will receive competitive proposals, leading to better pricing and a wider array of innovative technical approaches. It suggests that the market is not overly concentrated among a few dominant players for this particular niche.

What are the potential implications of this contract for future technological advancements within the DoD's R&D portfolio?

This contract, focused on Research and Development in the Physical, Engineering, and Life Sciences, has the potential to contribute significantly to the DoD's future technological advancements. The outcomes of this R&D effort could lead to breakthroughs in areas such as advanced materials, novel sensor technologies, improved communication systems, or enhanced human-machine interfaces, depending on the specific research objectives. Successful R&D projects often form the foundation for subsequent development and acquisition programs, ultimately enhancing warfighter capabilities, improving operational efficiency, or providing strategic advantages. The specific impact will depend on the nature of the research conducted and its successful transition into practical applications or further development phases within the DoD's broader R&D and acquisition strategy.

How does the contract's duration of 365 days influence the assessment of its scope and potential impact?

A contract duration of 365 days (one year) typically indicates a project focused on a specific phase of research and development, such as feasibility studies, proof-of-concept demonstrations, or the development of a particular technology component. It suggests a well-defined scope with achievable milestones within that timeframe. While a one-year duration is sufficient for significant progress in certain R&D areas, it may be insufficient for developing a fully mature technology or system. The assessment of its impact should consider whether this one-year effort is a standalone project or part of a larger, multi-year R&D initiative. If it's a foundational step, its true impact will be realized in subsequent phases or follow-on contracts. The relatively moderate contract value of $12.7 million aligns with a one-year R&D effort of substantial but not exhaustive scope.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Offers Received: 6

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 5301 BOLSA AVE, HUNTINGTON BEACH, CA, 92647

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $12,891,049

Exercised Options: $12,891,049

Current Obligation: $12,672,488

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline