DoD's $21.4M TERN Phase 1 R&D contract awarded to AeroVironment, Inc. for reconnaissance technology
Contract Overview
Contract Amount: $21,363,667 ($21.4M)
Contractor: Aerovironment, Inc.
Awarding Agency: Department of Defense
Start Date: 2013-08-26
End Date: 2015-11-30
Contract Duration: 826 days
Daily Burn Rate: $25.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 34
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: TACTICALLY EXPLOITED RECONNAISSANCE NODE (TERN) PROGRAM PHASE 1
Place of Performance
Location: MONROVIA, LOS ANGELES County, CALIFORNIA, 91016
Plain-Language Summary
Department of Defense obligated $21.4 million to AEROVIRONMENT, INC. for work described as: TACTICALLY EXPLOITED RECONNAISSANCE NODE (TERN) PROGRAM PHASE 1 Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can incentivize cost control but also carries inherent risk. 3. Performance period of 826 days indicates a substantial, multi-year research and development effort. 4. The North American Industry Classification System (NAICS) code 541712 points to R&D in physical and engineering sciences. 5. This contract represents a specific investment in advanced reconnaissance capabilities for defense applications. 6. The awardee, AeroVironment, Inc., is a known entity in the defense technology sector.
Value Assessment
Rating: fair
Benchmarking the value of this specific R&D contract is challenging without detailed cost breakdowns and comparable project data. The Cost Plus Fixed Fee (CPFF) structure means the final cost is not fixed upfront, making direct price comparisons difficult. However, the total award amount of $21.4 million for a multi-year R&D effort in advanced reconnaissance technology appears within a reasonable range for specialized defense projects, though a deeper dive into the fixed fee and allowable costs would be necessary for a definitive value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. The data shows 34 proposals were received, suggesting a robust level of interest and competition for this R&D opportunity. A high number of bidders generally supports price discovery and can lead to more favorable terms for the government.
Taxpayer Impact: The extensive competition for this contract likely resulted in a more competitive price for taxpayers compared to a sole-source or limited competition award. It also suggests that the government explored a wide range of technological solutions.
Public Impact
The primary beneficiaries are the Department of Defense, which will receive advanced reconnaissance capabilities. The contract supports the development of new technologies in the physical and engineering sciences. The geographic impact is primarily within California, where the contractor is based, potentially creating or sustaining high-skilled jobs. The contract aims to enhance national security through improved intelligence gathering and surveillance.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contracts can lead to cost overruns if not closely monitored.
- The R&D nature of the contract inherently involves technical risks and uncertainties in achieving desired outcomes.
- Reliance on a single contractor for a specific technology phase could create future dependencies.
Positive Signals
- Awarded through full and open competition with a significant number of proposals received.
- The contractor, AeroVironment, Inc., has established expertise in relevant technology areas.
- The contract focuses on developing critical defense capabilities.
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences (excluding biotechnology). The defense industry heavily invests in R&D to maintain technological superiority. Comparable spending benchmarks for advanced reconnaissance R&D can vary widely based on complexity and scope, but multi-million dollar awards for specialized systems are common.
Small Business Impact
The provided data does not indicate any specific small business set-asides or subcontracting requirements for this contract. Given the nature of advanced R&D and the prime contractor's likely capabilities, it's possible that subcontracting opportunities for small businesses might be limited unless specifically mandated or pursued by the prime contractor.
Oversight & Accountability
Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contract compliance, monitoring performance, and verifying costs. The CPFF structure necessitates rigorous oversight to manage allowable costs and the fixed fee. Transparency would be maintained through regular reporting requirements from the contractor and government oversight activities.
Related Government Programs
- Tactically Exploited Reconnaissance Node (TERN) Program
- Department of Defense Research and Development Programs
- Unmanned Aerial Systems (UAS) Development
- Intelligence, Surveillance, and Reconnaissance (ISR) Technology
Risk Flags
- Cost Plus Fixed Fee contract type requires careful monitoring of expenditures.
- R&D contracts carry inherent technical risks and uncertainties.
- Performance period is substantial, requiring sustained oversight.
Tags
defense, department-of-defense, research-and-development, aerovironment-inc, definitive-contract, cost-plus-fixed-fee, full-and-open-competition, california, reconnaissance, intelligence-surveillance-reconnaissance, unmanned-aerial-systems, phase-1
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $21.4 million to AEROVIRONMENT, INC.. TACTICALLY EXPLOITED RECONNAISSANCE NODE (TERN) PROGRAM PHASE 1
Who is the contractor on this award?
The obligated recipient is AEROVIRONMENT, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $21.4 million.
What is the period of performance?
Start: 2013-08-26. End: 2015-11-30.
What is AeroVironment, Inc.'s track record with similar DoD R&D contracts?
AeroVironment, Inc. has a significant track record with the Department of Defense, particularly in the development and production of unmanned aircraft systems (UAS) and related technologies. They are well-known for their expertise in small, tactical UAS, which aligns with the 'reconnaissance node' aspect of the TERN program. Their history includes numerous contracts for research, development, testing, and production of intelligence, surveillance, and reconnaissance (ISR) platforms. While specific details on past R&D contract performance metrics like cost growth or schedule adherence require deeper database analysis, their consistent engagement with the DoD suggests a level of established capability and trust in delivering complex technological solutions within the defense sector.
How does the $21.4 million award compare to other R&D contracts for reconnaissance technology?
The $21.4 million award for the TERN Phase 1 R&D contract is a substantial but not extraordinary figure for advanced defense technology development. R&D contracts in areas like reconnaissance, particularly those involving novel systems or advanced capabilities, can range from a few million to hundreds of millions of dollars, depending on the phase (e.g., basic research vs. system development), technological complexity, and program duration. Given that this is Phase 1 of a program and awarded through full and open competition with 34 bidders, the amount suggests a focused effort on a specific technological advancement rather than a full-scale system procurement. Without more granular data on the specific technical objectives and scope of work, a precise value comparison is difficult, but it appears to be a significant investment in a specialized area.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D?
The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D, like the TERN Phase 1 program, revolve around cost control and potential for scope creep. In a CPFF contract, the government agrees to pay the contractor's allowable costs plus a predetermined fixed fee representing profit. The risk for the government is that the contractor may have less incentive to control costs rigorously compared to fixed-price contracts, as cost overruns are generally reimbursed. However, the fixed fee itself is not increased, providing some incentive for efficiency. For R&D, the inherent uncertainty of research means that predicting final costs is difficult. This structure can lead to challenges in managing the budget if research paths prove more expensive than initially anticipated, requiring close government oversight of expenditures and progress.
How effective is the 'full and open competition' approach for specialized R&D like this?
The 'full and open competition' approach is generally considered highly effective for specialized R&D contracts, provided the solicitation clearly defines the technical requirements and evaluation criteria. Receiving 34 proposals indicates strong market interest and allows the government to explore a diverse range of innovative solutions and approaches. This broad competition can drive down prices, encourage technological advancements, and ensure the government selects the most capable contractor and promising technology. However, the effectiveness also depends on the government's ability to clearly articulate its needs and evaluate the highly technical proposals accurately. For specialized R&D, it ensures that the government isn't limited to a pre-selected few, potentially uncovering novel solutions from unexpected sources.
What are the historical spending patterns for reconnaissance technology R&D within the DoD?
Historical spending patterns for reconnaissance technology R&D within the DoD show a consistent and significant investment driven by evolving threats and technological advancements. The DoD allocates substantial budgets annually towards intelligence, surveillance, and reconnaissance (ISR) capabilities, encompassing a wide array of platforms and systems, from satellites to drones and sensors. R&D spending in this area fluctuates based on strategic priorities, technological breakthroughs, and the need to counter emerging adversary capabilities. Investments often focus on improving sensor resolution, data processing, real-time dissemination, electronic warfare countermeasures, and autonomous systems. Contracts like TERN Phase 1 represent a portion of this broader R&D investment, aimed at developing next-generation capabilities that maintain information superiority.
What are the implications of the contract duration (826 days) on R&D outcomes?
The contract duration of 826 days (approximately 2.26 years) for TERN Phase 1 suggests a well-defined, multi-year research and development effort. This extended timeframe is appropriate for complex R&D projects that require iterative development, testing, and refinement. It allows the contractor sufficient time to explore technical challenges, conduct experiments, potentially pivot based on findings, and deliver a mature prototype or set of technologies. Shorter durations might be suitable for incremental improvements, while longer periods could indicate foundational research or system integration challenges. The 826-day period implies a structured approach to achieving specific R&D milestones within a realistic timeframe, balancing the need for progress with the inherent uncertainties of innovation.
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: 34
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 181 W HUNTINGTON DR STE 202, MONROVIA, CA, 91016
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $30,716,572
Exercised Options: $21,363,667
Current Obligation: $21,363,667
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2013-08-26
Current End Date: 2015-11-30
Potential End Date: 2015-11-30 00:00:00
Last Modified: 2017-05-31
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