DoD's $11.6M R&D contract with ETREMA PRODUCTS, INC. for advanced materials shows mixed value and competition

Contract Overview

Contract Amount: $11,630,910 ($11.6M)

Contractor: Etrema Products, Inc.

Awarding Agency: Department of Defense

Start Date: 2005-04-14

End Date: 2009-12-31

Contract Duration: 1,722 days

Daily Burn Rate: $6.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 999

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Place of Performance

Location: AMES, STORY County, IOWA, 50010, UNITED STATES OF AMERICA

State: Iowa Government Spending

Plain-Language Summary

Department of Defense obligated $11.6 million to ETREMA PRODUCTS, INC. for work described as: Key points: 1. Contract value of $11.6 million over 5 years suggests a significant investment in specialized R&D. 2. The 'IA' (Intelligence/Analysis) type suggests a focus on research and development, potentially for defense applications. 3. A fixed-fee structure on a cost-plus contract can incentivize efficiency, but requires careful oversight. 4. The contract's duration of over 4 years indicates a long-term commitment to the research objective. 5. The absence of small business set-asides raises questions about broader economic impact. 6. The contract was awarded under full and open competition, suggesting a potentially competitive bidding process.

Value Assessment

Rating: fair

Benchmarking the value of this R&D contract is challenging without specific deliverables or comparable projects. The $11.6 million awarded over approximately 5 years averages to about $2.3 million annually. This figure needs to be assessed against the scope and novelty of the research. The cost-plus fixed-fee structure means the government pays for allowable costs plus a predetermined fee, which can lead to cost overruns if not managed tightly. Without more detail on the specific research outcomes and market comparables for similar advanced materials R&D, a definitive value-for-money assessment is difficult.

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. While the specific number of bidders is not provided, this procurement method generally fosters a competitive environment, which can lead to better pricing and innovation. The agency's decision to use full and open competition suggests confidence that multiple vendors could meet the requirements for this advanced materials research.

Taxpayer Impact: A competitive bidding process, even for R&D, is generally favorable for taxpayers as it can drive down costs and encourage the development of more cost-effective solutions.

Public Impact

The primary beneficiaries are likely the Department of Defense and potentially other government agencies requiring advanced materials for defense applications. The contract supports research and development in physical, engineering, and life sciences, specifically related to advanced materials. The geographic impact is centered around the contractor's location in Iowa, though the ultimate application of the research could be nationwide. The contract likely supports a specialized workforce in materials science and engineering, contributing to the high-tech sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus contracts, even with a fixed fee, carry inherent risks of cost escalation if not meticulously monitored.
The lack of specific performance metrics or deliverables in the provided data makes it difficult to gauge the success of the R&D.
The duration of the contract could lead to technological obsolescence if the research pace outstrips advancements in the field.

Positive Signals

Awarding under full and open competition suggests a potentially robust selection process and a desire for the best available solution.
The focus on R&D in advanced materials aligns with strategic defense priorities, indicating potential for significant technological advancement.
The fixed fee component of the contract structure aims to provide some cost certainty for the government.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on advanced materials. The NAICS code 541710 confirms this focus. The R&D sector is critical for innovation across various industries, including defense, aerospace, and manufacturing. Government spending in this area often aims to foster breakthroughs that the private sector might not pursue due to high risk or long development timelines. Comparable spending benchmarks would depend heavily on the specific type of advanced material and its intended application.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the requirements were likely complex and potentially beyond the capabilities or capacity of many small businesses, or that the competition was broad enough to include large, established firms. There is no information provided on subcontracting plans, so the direct impact on the small business ecosystem is unclear, but it is unlikely to have benefited from direct set-aside provisions.

Oversight & Accountability

Oversight for this Department of Defense contract would typically be managed by the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. The 'ov' field itself is not populated with specific oversight mechanisms. However, cost-plus fixed-fee contracts generally require rigorous financial and performance oversight to ensure costs are allowable, reasonable, and that the contractor is progressing towards the fixed fee objectives. Transparency would depend on the agency's reporting practices and any specific clauses related to public disclosure.

Related Government Programs

Department of Defense Research and Development Programs
Advanced Materials Research Contracts
Physical Sciences Research
Engineering Research Contracts
Life Sciences Research Contracts

Risk Flags

Cost Overrun Potential
Scope Creep Risk
Deliverable Relevance Over Time
Limited Small Business Participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.6 million to ETREMA PRODUCTS, INC.. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is ETREMA PRODUCTS, 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 $11.6 million.

What is the period of performance?

Start: 2005-04-14. End: 2009-12-31.

What specific advanced materials was ETREMA PRODUCTS, INC. contracted to research and develop?

The provided data does not specify the exact nature of the advanced materials. The NAICS code 541710 ('Research and Development in the Physical, Engineering, and Life Sciences') and the contract description 'IA' (Intelligence/Analysis) suggest a focus on materials with potential defense applications. To understand the specific materials, one would need to consult the contract's statement of work (SOW) or related technical documentation. This could range from novel alloys, composites, ceramics, or polymers designed for enhanced strength, durability, thermal resistance, or other specialized properties critical for military hardware or systems.

How does the $11.6 million contract value compare to typical R&D spending in advanced materials for the DoD?

Assessing the $11.6 million contract value requires context regarding the specific R&D scope. Over its duration of approximately 5 years (from April 2005 to December 2009), this averages to roughly $2.3 million per year. This figure is moderate for a specialized R&D effort within the DoD, which can award contracts ranging from hundreds of thousands to hundreds of millions of dollars for research initiatives. Without knowing if this contract was for foundational research, applied research, or advanced development, or if it involved a single material or a broad portfolio, direct comparison is difficult. However, it represents a significant but not exceptionally large investment for a focused R&D project in a critical technology area.

What are the potential risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D?

Cost Plus Fixed Fee (CPFF) contracts, like the one awarded to ETREMA PRODUCTS, INC., present specific risks. The primary risk for the government is that the contractor may have less incentive to control costs once the allowable costs are covered, as their profit (the fixed fee) is predetermined. This can lead to scope creep or less efficient resource management if not rigorously overseen. For the contractor, the risk lies in accurately estimating the costs to ensure the fixed fee is sufficient to cover their expenses and provide a reasonable profit. If costs exceed estimates significantly, the contractor bears the loss. Effective oversight by the contracting agency is crucial to mitigate these risks by scrutinizing costs and ensuring adherence to the SOW.

What does the 'IA' contract status signify for this R&D effort?

The 'IA' status, often interpreted as 'Intelligence/Analysis' or similar, suggests that this contract likely involves research and development activities that are sensitive or require analytical rigor, potentially related to intelligence gathering, threat assessment, or the development of technologies with strategic implications. In the context of R&D, it could imply that the research outcomes are intended to inform decision-making, provide analytical insights, or develop capabilities that enhance national security intelligence. This designation may also influence the level of security clearance required for personnel and the handling of deliverables.

Given the contract duration (2005-2009), how relevant are the R&D outcomes today?

The relevance of R&D outcomes from a contract awarded between 2005 and 2009 depends heavily on the nature of the research. If the research focused on fundamental scientific principles or materials with enduring properties, the findings could still be highly relevant. However, if the research was tied to rapidly evolving technologies or specific military platforms that have since been superseded, its direct applicability might be limited. Advanced materials research often builds foundational knowledge, so even older research can inform current development efforts. To ascertain current relevance, one would need to examine the specific deliverables and their integration into subsequent programs or technologies.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Offers Received: 999

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Edge Technologies, Inc (UEI: 177878568)

Address: 2500 N LOOP DR, AMES, IA, 50010

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

Financial Breakdown

Contract Ceiling: $6,730,006

Exercised Options: $2,079,941

Current Obligation: $11,630,910

Contract Characteristics

Cost or Pricing Data: YES

Timeline