DoD's $14.9M R&D contract for algal-derived JP-8 fuel awarded to Science Applications International Corporation

Contract Overview

Contract Amount: $14,916,344 ($14.9M)

Contractor: Science Applications International Corporation

Awarding Agency: Department of Defense

Start Date: 2008-12-10

End Date: 2010-07-09

Contract Duration: 576 days

Daily Burn Rate: $25.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 17

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: APPROACH TO MAKE ALGAL-DERIVED JP-8

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $14.9 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: APPROACH TO MAKE ALGAL-DERIVED JP-8 Key points: 1. Contract awarded for research and development of a novel fuel source. 2. The contract value is substantial for a research and development initiative. 3. The contractor has a significant presence in the defense sector. 4. The contract duration was relatively short for a complex R&D project. 5. The contract was awarded under full and open competition. 6. The contract type was Cost Plus Fixed Fee, common for R&D.

Value Assessment

Rating: fair

The contract value of $14.9 million for a 576-day research and development effort appears within a reasonable range for specialized scientific endeavors. However, without specific benchmarks for algal-derived fuel R&D, a precise value-for-money assessment is challenging. The Cost Plus Fixed Fee structure suggests that costs were estimated and a fixed fee was negotiated, which can lead to cost overruns if not managed carefully. Comparing this to other similar R&D contracts in biotechnology would provide better context.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. This competitive process is generally favorable for price discovery and ensuring the government receives competitive offers. The presence of 17 bids suggests a robust interest in this research area, which could have driven down costs and improved the quality of proposals.

Taxpayer Impact: Full and open competition typically benefits taxpayers by fostering a competitive environment that can lead to more cost-effective solutions and a wider array of innovative approaches.

Public Impact

The primary beneficiaries are the Department of Defense, seeking to diversify its fuel sources and reduce reliance on traditional petroleum. The services delivered involve advanced research and development in biotechnology and chemical engineering. The geographic impact is primarily within the United States, focusing on research facilities and potential future fuel production sites. Workforce implications include employment for scientists, engineers, and technicians in the biotechnology and energy sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize contractors to incur costs without direct financial risk, potentially leading to higher overall expenditures if not closely monitored.
The specific outcomes and scalability of algal-derived JP-8 fuel are subject to significant R&D risks, which may not be fully mitigated by the contract's scope.
The relatively short duration of the contract (576 days) might limit the depth of research and development achievable for a complex technological advancement.

Positive Signals

Awarded under full and open competition with 17 bids, suggesting a competitive environment that likely yielded a strong proposal.
The contractor, Science Applications International Corporation, is a well-established entity with extensive experience in defense-related research and development.
The focus on developing alternative and sustainable fuel sources aligns with strategic national security and environmental goals.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on biotechnology and alternative energy. The market for advanced biofuels and sustainable aviation fuels is growing, driven by both environmental concerns and the need for energy independence. Comparable spending benchmarks in this niche R&D area are difficult to pinpoint without more specific data on the technological maturity and scale of the research.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. The prime contractor is a large business. There is no explicit information regarding subcontracting plans for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for specialized services.

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. The Cost Plus Fixed Fee structure necessitates rigorous financial oversight to monitor costs and ensure the fixed fee remains appropriate. Transparency is generally maintained through contract reporting mechanisms, though specific details of R&D progress may be sensitive.

Related Government Programs

Department of Defense Research and Development Programs
Alternative Fuels Research
Biotechnology Research Contracts
Advanced Materials Development

Risk Flags

Potential for cost overruns due to the inherent uncertainties in R&D.
Scalability and cost-effectiveness challenges in algal cultivation and fuel production.
Ensuring the final fuel product meets stringent military specifications.
Dependence on technological breakthroughs in biotechnology and chemical engineering.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.9 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. APPROACH TO MAKE ALGAL-DERIVED JP-8

Who is the contractor on this award?

The obligated recipient is SCIENCE APPLICATIONS INTERNATIONAL CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $14.9 million.

What is the period of performance?

Start: 2008-12-10. End: 2010-07-09.

What is the track record of Science Applications International Corporation (SAIC) in similar R&D contracts for the Department of Defense?

Science Applications International Corporation (SAIC) has a substantial track record with the Department of Defense (DoD) across a wide range of R&D and support services. They have been involved in numerous contracts related to advanced technologies, systems engineering, and scientific research. While specific details on algal-derived fuel R&D contracts are not immediately available, SAIC's extensive experience in areas like materials science, chemical engineering, and energy research suggests a strong capability to undertake complex R&D projects. Their history includes developing and testing new materials, improving existing technologies, and providing scientific expertise for military applications. This background positions them as a capable contractor for the algal-derived JP-8 fuel initiative, though the success of this specific project would depend on the unique challenges of biofuel development.

How does the $14.9 million contract value compare to other government R&D investments in alternative fuels?

The $14.9 million contract value for this specific R&D effort in algal-derived JP-8 fuel is a significant but not exceptionally large sum within the broader landscape of government investments in alternative fuels. The Department of Defense, in particular, has invested billions over the years in exploring various sustainable aviation fuels, including those derived from sources like algae, camelina, and jatropha. These investments range from early-stage feasibility studies and laboratory research, often in the multi-million dollar range, to larger pilot programs and demonstration projects that can reach tens or even hundreds of millions of dollars. This particular contract appears to be focused on a defined research phase, likely aimed at proving the viability and developing the process for algal-derived JP-8. Its value is consistent with targeted R&D initiatives seeking to advance specific fuel technologies.

What are the primary risks associated with developing algal-derived JP-8 fuel, and how might they impact contract performance?

The development of algal-derived JP-8 fuel faces several inherent risks that could impact contract performance. Key among these are: 1) **Algal Cultivation and Harvesting Efficiency:** Scaling up algae production to commercially viable levels while maintaining cost-effectiveness and consistent yields can be challenging. Factors like nutrient supply, light, temperature, and contamination control are critical. 2) **Extraction and Conversion Processes:** Efficiently extracting lipids from algae and converting them into a stable JP-8 equivalent requires complex biochemical and chemical engineering processes. Yields and purity can be variable. 3) **Fuel Performance and Compatibility:** Ensuring the synthesized fuel meets stringent military specifications (like JP-8) for performance, stability, and compatibility with existing engine infrastructure is paramount. 4) **Cost Competitiveness:** Achieving a production cost that is competitive with traditional petroleum-based fuels is a major hurdle. The contract's Cost Plus Fixed Fee structure might mitigate some financial risk for the contractor, but cost overruns due to unforeseen technical challenges could still extend timelines or require additional funding requests.

What does the 'Cost Plus Fixed Fee' contract type imply for the government and the contractor in this R&D context?

The 'Cost Plus Fixed Fee' (CPFF) contract type means the government agrees to pay the contractor for all allowable costs incurred during the performance of the contract, plus a predetermined fixed fee representing the contractor's profit. In an R&D context like this one, CPFF is often used when the scope of work is not precisely defined, or when there is significant uncertainty about the costs involved. For the government, this structure provides flexibility to adapt to research findings but also carries the risk of cost overruns if the initial cost estimates are inaccurate or if unforeseen technical challenges arise. The government's oversight is crucial to ensure costs are reasonable and allocable. For the contractor, the CPFF structure offers a guaranteed profit (the fixed fee) regardless of the final cost, which can incentivize them to undertake high-risk, innovative research. However, it also means their profit is capped, unlike in a fixed-price contract where higher efficiency could lead to greater profit.

How has the Department of Defense's spending on alternative fuels evolved over the years, and where does this contract fit?

The Department of Defense (DoD) has consistently invested in alternative fuels as part of its strategic goal to enhance energy security and reduce reliance on volatile global oil markets. Early efforts focused on biofuels like biodiesel and ethanol, with spending gradually increasing through the 2000s and 2010s. More recently, the focus has broadened to include synthetic fuels, advanced biofuels, and electrification, driven by technological advancements and increasing environmental awareness. The DoD's 'Alternative Fuels Program' and related initiatives have seen funding allocated across various research, development, testing, and demonstration phases. This $14.9 million contract for algal-derived JP-8 fits within the R&D phase, specifically targeting the development of a drop-in replacement fuel. It represents a targeted investment aimed at advancing a particular biofuel pathway, contributing to the DoD's overall portfolio of alternative fuel solutions.

What is the significance of the NAICS code 541711 (Biotechnology Research and Development) for this contract?

The North American Industry Classification System (NAICS) code 541711, 'Biotechnology Research and Development', signifies that the primary purpose of this contract is to conduct scientific research and experimental development in biotechnology. This includes research in areas such as genetic engineering, molecular biology, and the development of biological products and processes. For this specific contract, it indicates that the work involves leveraging biological systems and organisms (like algae) to create or improve products, specifically a type of aviation fuel (JP-8). This classification helps categorize the contract within federal spending data, allowing for analysis of trends and spending patterns within the biotechnology R&D sector. It also helps identify potential contractors with the specialized expertise required for such advanced scientific endeavors.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in 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: 17

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 12010 SUNSET HILLS RD, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $25,600,702

Exercised Options: $14,916,344

Current Obligation: $14,916,344

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline