DoD's $14.7M R&D contract with M2 Technologies, Inc. awarded without competition

Contract Overview

Contract Amount: $14,673,779 ($14.7M)

Contractor: M2 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-01-30

End Date: 2011-07-29

Contract Duration: 1,641 days

Daily Burn Rate: $8.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: DESIGN&DEVELOP TWO (2) ASITS TAS::17 1804::TAS

Place of Performance

Location: VERSAILLES, WOODFORD County, KENTUCKY, 40383, UNITED STATES OF AMERICA

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $14.7 million to M2 TECHNOLOGIES, INC. for work described as: DESIGN&DEVELOP TWO (2) ASITS TAS::17 1804::TAS Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can lead to cost overruns if not managed carefully. 2. The contract was sole-sourced, raising questions about potential price inflation and lack of market-driven cost discovery. 3. A long duration of 1641 days suggests a complex or ongoing research and development effort. 4. The contract falls under R&D in Physical, Engineering, and Life Sciences, a sector often characterized by high innovation and risk. 5. The award was made by the Defense Contract Management Agency, indicating a focus on defense-related research. 6. No small business set-aside was applied, suggesting the primary contractor was not a small business or the requirement did not align with set-aside criteria.

Value Assessment

Rating: questionable

Benchmarking value for this sole-sourced R&D contract is challenging due to the lack of competitive bids. The cost-plus-fixed-fee structure necessitates close oversight to ensure costs remain reasonable and aligned with the research objectives. Without comparable contracts or market data, it's difficult to definitively assess if the $14.7 million represents excellent value. The absence of competition limits the ability to compare pricing against market alternatives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning M2 Technologies, Inc. was the only bidder considered. This approach bypasses the standard competitive bidding process, which typically involves multiple companies vying for the contract. While sole-sourcing can be justified in specific circumstances (e.g., unique capabilities), it significantly reduces price discovery and may lead to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings typically achieved through competitive bidding. This can result in a less efficient use of public funds if the awarded price is higher than what could have been obtained through competition.

Public Impact

The Department of Defense benefits from specialized research and development services. The contract supports advancements in physical, engineering, and life sciences, potentially leading to new technologies or improved defense capabilities. The geographic impact is centered in Kentucky, where the contractor is located. The contract likely supports a specialized workforce within M2 Technologies, Inc., contributing to high-skill employment in the R&D sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have led to inflated costs for taxpayers.
Cost-plus-fixed-fee contracts require robust oversight to prevent cost overruns.
The long contract duration could indicate potential for scope creep or delays.
Sole-source awards limit transparency in pricing and contractor selection.

Positive Signals

Contract supports critical research and development for the Department of Defense.
M2 Technologies, Inc. is performing specialized R&D services.
The contract has a defined end date, providing a timeframe for deliverables.

Sector Analysis

The contract falls under the Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology) sector, classified under NAICS code 541712. This sector is crucial for innovation and technological advancement, particularly within defense applications. Spending in this area can vary significantly based on national security priorities and technological frontiers. Comparable spending benchmarks are difficult to establish for sole-sourced R&D due to the unique nature of each project and the absence of competitive pricing.

Small Business Impact

This contract was not awarded as a small business set-aside. The prime contractor, M2 Technologies, Inc., is not listed as a small business for this award. This means that opportunities for small businesses to directly participate as subcontractors would depend on M2 Technologies' own subcontracting plans and the nature of the R&D work required. There is no indication of specific subcontracting goals for small businesses tied to this award.

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 be embedded in the contract's terms and conditions, including reporting requirements and performance metrics. Transparency is limited due to the sole-source nature of the award, making it difficult for the public to scrutinize the pricing and selection process. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Research and Development Contracts
Cost-Plus-Fixed-Fee Contracts
Sole-Source Defense Contracts
Research and Development in Physical Sciences
Engineering Services Contracts

Risk Flags

Sole-source award raises concerns about competition and potential overpricing.
Cost-plus-fixed-fee structure requires diligent oversight to manage costs.
Long contract duration may indicate complexity or potential for delays.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.7 million to M2 TECHNOLOGIES, INC.. DESIGN&DEVELOP TWO (2) ASITS TAS::17 1804::TAS

Who is the contractor on this award?

The obligated recipient is M2 TECHNOLOGIES, 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 $14.7 million.

What is the period of performance?

Start: 2007-01-30. End: 2011-07-29.

What is the track record of M2 Technologies, Inc. with federal contracts, particularly with the Department of Defense?

M2 Technologies, Inc. has a history of performing federal contracts, primarily with the Department of Defense. While this specific contract (awarded in 2007) represents a significant value, a comprehensive review of their contract history would involve examining past performance on similar R&D projects, adherence to schedules and budgets, and any documented issues or commendations. Analyzing their portfolio across different agencies and contract types would provide a fuller picture of their reliability and expertise in delivering on government requirements. Without access to detailed performance reviews or past performance databases, a definitive assessment remains limited, but the award of a substantial R&D contract suggests a level of capability deemed necessary by the awarding agency at the time.

How does the $14.7 million total award compare to similar R&D contracts in the physical, engineering, and life sciences sector?

Comparing the $14.7 million award for this specific R&D contract is challenging due to its sole-source nature and the inherent variability in R&D projects. Typically, R&D contracts can range widely in value, from small, targeted research grants to multi-billion dollar programs for major system development. Contracts under NAICS code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology),' can vary significantly based on the scope, duration, and technological complexity. Without competitive bids, it's difficult to benchmark the price against market rates. However, for a contract spanning over four years (2007-2011), $14.7 million suggests a moderately sized project, likely focused on specific research objectives rather than broad, exploratory development.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee R&D contract of this magnitude?

The primary risks associated with this sole-source, cost-plus-fixed-fee (CPFF) R&D contract are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher costs than if multiple bidders had competed. This lack of price discovery means taxpayers may not be getting the best possible value. Secondly, the CPFF structure, while allowing flexibility for R&D where costs can be uncertain, carries the risk of cost overruns. If not meticulously managed and overseen, the contractor may incur higher expenses than anticipated, which are then passed on to the government, potentially exceeding the initial $14.7 million estimate if not capped effectively. Robust oversight is crucial to mitigate these risks.

What does the contract's duration of 1641 days imply about the nature of the R&D work?

A contract duration of 1641 days, approximately 4.5 years, suggests that the R&D work undertaken was likely complex, long-term, and potentially involved iterative processes common in scientific and engineering research. Such durations are typical for projects requiring significant investigation, experimentation, development, and testing phases. It implies that the objectives were not short-term or easily achievable within a year or two. This extended timeline could also indicate a need for sustained effort to explore new technologies, develop prototypes, or conduct extensive validation, characteristic of advanced R&D endeavors where breakthroughs may not be immediate.

How does the specific NAICS code (541712) inform our understanding of the contract's purpose and potential impact?

The North American Industry Classification System (NAICS) code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology),' indicates that this contract was focused on scientific inquiry and experimentation within these broad fields. This could encompass a wide range of activities, from materials science and advanced manufacturing to aerospace engineering, environmental science, or even fundamental physics research, excluding purely biological or biotechnological applications. Understanding this code helps contextualize the contract as supporting innovation and technological advancement, likely aimed at enhancing defense capabilities, improving existing systems, or exploring novel scientific concepts relevant to national security.

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 › OTHER RESEARCH/DEVELOPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: M6785407R1034

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 498 ELLIOTT RD BOX 312, WEST HYANNISPORT, MA, 02672

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $26,264,241

Exercised Options: $14,676,286

Current Obligation: $14,673,779

Contract Characteristics

Cost or Pricing Data: YES

Timeline