DoD's $11M R&D contract with SRI International for media connectivity raises questions on competition and value

Contract Overview

Contract Amount: $10,970,778 ($11.0M)

Contractor: SRI International

Awarding Agency: Department of Defense

Start Date: 2020-09-21

End Date: 2026-03-01

Contract Duration: 1,987 days

Daily Burn Rate: $5.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: CONNECTIVITY THROUGH MEDIA (CTM)

Place of Performance

Location: MENLO PARK, SAN MATEO County, CALIFORNIA, 94025

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $11.0 million to SRI INTERNATIONAL for work described as: CONNECTIVITY THROUGH MEDIA (CTM) Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The duration of the contract (nearly 7 years) suggests a long-term R&D effort. 3. The specific R&D area (physical, engineering, and life sciences) is broad and requires detailed justification for sole-source award. 4. Performance is located in California, a hub for R&D and technology. 5. The contract type (Cost Plus Fixed Fee) can incentivize cost overruns if not closely monitored. 6. No small business set-aside was applied, indicating potential missed opportunities for smaller innovative firms.

Value Assessment

Rating: questionable

Benchmarking the value of this Cost Plus Fixed Fee contract is challenging without detailed cost breakdowns and comparison to similar sole-source R&D efforts. The $11 million award over nearly seven years suggests a significant investment. However, the lack of competition makes it difficult to assess if the pricing reflects fair market value or if alternative, more cost-effective solutions were explored. The government bears the risk of cost overruns inherent in this contract type.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning SRI International was the only bidder. This approach bypasses the standard competitive bidding process, which typically leads to better price discovery and potentially lower costs for the government. While sole-source awards can be justified for unique capabilities or urgent needs, the rationale for not competing this R&D effort needs thorough examination.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as the government does not benefit from the price reductions typically achieved through competitive bidding.

Public Impact

The primary beneficiary is SRI International, a research organization, which will receive funding for its R&D services. The contract aims to advance research and development in physical, engineering, and life sciences. The geographic impact is concentrated in California, where SRI International is located. The contract supports a specialized workforce in R&D, potentially leading to advancements in technology and scientific understanding.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpayment and missed opportunities for innovation from other firms.
Cost Plus Fixed Fee structure carries inherent risk of cost escalation if not rigorously managed.
The broad R&D category may obscure the specific value and necessity of this sole-source award.
Limited transparency due to sole-source nature makes independent value assessment difficult.

Positive Signals

SRI International is a reputable research institution with a history of government contracts.
The contract supports critical R&D in advanced scientific and engineering fields.
The long-term nature of the contract allows for sustained research and development efforts.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. This sector is characterized by innovation, long development cycles, and often high upfront investment. Comparable spending in this area can vary widely depending on the specific research focus. Government R&D spending is crucial for driving technological advancements and maintaining a competitive edge, but it requires careful oversight to ensure taxpayer funds are used effectively.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This means that opportunities for small businesses to participate in or benefit from this significant R&D funding were not explicitly pursued through this award mechanism. The focus on a sole-source award to a large research institution may limit the broader impact on the small business innovation ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense and the Defense Advanced Research Projects Agency (DARPA). As a Cost Plus Fixed Fee contract, rigorous financial oversight and performance monitoring are crucial to manage costs and ensure deliverables are met. Transparency may be limited due to the sole-source nature, but periodic reviews and reporting requirements should be in place to ensure accountability.

Related Government Programs

Defense Advanced Research Projects Agency (DARPA) Research Programs
Department of Defense Research and Development Contracts
Federal Funding for Physical Sciences Research
Federal Funding for Engineering Research
Federal Funding for Life Sciences Research

Risk Flags

Sole-source award lacks competitive justification.
Cost Plus Fixed Fee contract type carries inherent cost overrun risk.
Long contract duration may lead to outdated research or scope creep.
Lack of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.0 million to SRI INTERNATIONAL. CONNECTIVITY THROUGH MEDIA (CTM)

Who is the contractor on this award?

The obligated recipient is SRI INTERNATIONAL.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Advanced Research Projects Agency).

What is the total obligated amount?

The obligated amount is $11.0 million.

What is the period of performance?

Start: 2020-09-21. End: 2026-03-01.

What specific research objectives does this contract aim to achieve, and how do they align with DARPA's strategic goals?

The contract, titled 'CONNECTIVITY THROUGH MEDIA (CTM)', is awarded to SRI International for Research and Development in the Physical, Engineering, and Life Sciences. While the specific objectives are not detailed in the provided data, DARPA typically funds high-risk, high-reward research aimed at creating breakthrough technologies for national security. The 'CTM' title suggests a focus on novel methods of information transfer or communication, potentially involving advanced media processing, network architectures, or signal propagation techniques. The alignment with DARPA's goals would depend on how these advancements contribute to future military capabilities, intelligence gathering, or strategic advantage.

What is the justification for awarding this contract on a sole-source basis to SRI International?

The provided data indicates the contract was awarded on a 'NOT COMPETED' basis, implying a sole-source justification. Common reasons for sole-source awards include the unique capability of the contractor, the urgency of the requirement, or the lack of adequate competition. For a research and development contract, DARPA might argue that SRI International possesses unique expertise, proprietary technology, or established infrastructure essential for the specific research outlined in the 'CTM' program. Without access to the official justification documentation (e.g., a Justification and Approval document), the precise rationale remains speculative but would need to demonstrate why no other source could fulfill the requirement.

How does the Cost Plus Fixed Fee (CPFF) contract type influence cost control and risk for this R&D project?

The Cost Plus Fixed Fee (CPFF) contract type means the contractor (SRI International) is reimbursed for all allowable costs incurred, plus a fixed fee representing profit. For R&D, this structure can be beneficial as it allows flexibility to explore unforeseen technical challenges and adapt research paths without constant renegotiation of price. However, it places the cost risk primarily on the government. If costs exceed initial estimates, the government still pays them, while the contractor's profit (the fixed fee) remains constant. Effective oversight is critical to ensure costs are reasonable and allocable to the contract, and that the fixed fee adequately compensates the contractor for the effort without being excessive.

What is SRI International's track record with similar government R&D contracts, particularly with DARPA?

SRI International is a well-established research institute with a long history of performing research and development for various government agencies, including DARPA. They have a proven track record in diverse scientific and technological fields. While specific details of their past performance on similar 'connectivity' or 'media' related R&D projects are not provided here, their general reputation suggests they possess the technical capabilities and experience to undertake complex research endeavors. A deeper dive into their contract history with DARPA would reveal specific successes, challenges, and the types of R&D they have previously executed.

Are there any comparable R&D contracts in the physical, engineering, or life sciences awarded by DARPA or other agencies that can serve as a benchmark for this $11 million award?

Benchmarking this $11 million R&D contract is challenging without knowing the specific technical scope and deliverables. DARPA contracts can range from small, focused exploratory projects to large, multi-year programs. However, $11 million over nearly seven years ($1.57 million per year on average) suggests a significant, sustained research effort. Comparable contracts would likely be other sole-source or competitively awarded R&D efforts within the physical, engineering, and life sciences sectors funded by agencies like DARPA, NSF, NIH, or DOE. The key comparison points would be the contract duration, the specific research domain, the contractor's overhead rates, and the ultimate technological advancements achieved relative to the investment.

What are the potential risks associated with the long duration (1987 days) of this contract?

The long duration of this contract (approximately 5.5 years) presents several potential risks. Firstly, research objectives and technological landscapes can evolve rapidly; by the end of the contract, the initial goals might be outdated or superseded by new discoveries. Secondly, maintaining consistent oversight and engagement from the government over such an extended period can be challenging due to personnel turnover and shifting agency priorities. Thirdly, the longer the contract, the greater the potential for cost growth, especially with a CPFF structure, if not meticulously managed. Finally, the extended timeline might delay the transition of developed technologies into practical applications or further development phases.

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: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HR001120R0008

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 333 RAVENSWOOD AVE, MENLO PARK, CA, 94025

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: $10,972,482

Exercised Options: $10,972,482

Current Obligation: $10,970,778

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $110,910

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline