DoD's $18.2M R&D contract with Utron Inc. shows fair value, but limited competition raises concerns
Contract Overview
Contract Amount: $18,242,221 ($18.2M)
Contractor: Utron Inc.
Awarding Agency: Department of Defense
Start Date: 2006-06-28
End Date: 2012-03-16
Contract Duration: 2,088 days
Daily Burn Rate: $8.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 999
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: RESEARCH AND DEVELOPMENT IN THE PHYSICAL, ENGINEERING, AND LIFE SCIENCES
Place of Performance
Location: MANASSAS, PRINCE WILLIAM County, VIRGINIA, 20110
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $18.2 million to UTRON INC. for work described as: RESEARCH AND DEVELOPMENT IN THE PHYSICAL, ENGINEERING, AND LIFE SCIENCES Key points: 1. Contract value appears reasonable given the R&D nature and duration. 2. Limited competition suggests potential for higher costs than a more open process. 3. Contract type (Cost Plus Fixed Fee) carries inherent risk of cost overruns. 4. Performance period is substantial, indicating a long-term project. 5. Sector positioning is within advanced physical, engineering, and life sciences R&D. 6. Contractor's track record and specific performance details are crucial for a full assessment.
Value Assessment
Rating: fair
The contract's total award of $18.2 million over approximately 6.5 years (2088 days) for R&D services suggests a moderate annual spend. Benchmarking R&D contracts is challenging due to their unique nature and varying scopes. However, the cost-plus-fixed-fee structure, while common for R&D, can lead to less price certainty compared to fixed-price contracts. Without specific deliverables or performance metrics, a precise value-for-money assessment is difficult, but the overall spend is not exceptionally high for a multi-year federal R&D effort.
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. However, the provided data does not specify the number of bids received. A high number of bidders typically leads to better price discovery and potentially lower costs for the government. If only a few bids were submitted despite full and open competition, it might suggest a niche market or high barriers to entry for potential competitors.
Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it fosters a competitive environment that can drive down prices and encourage innovation. However, the ultimate benefit depends on the number of actual bidders and the effectiveness of the evaluation process.
Public Impact
The primary beneficiaries are the Department of Defense and potentially the advancement of physical, engineering, and life sciences research. Services delivered likely involve cutting-edge research and development activities. Geographic impact is primarily associated with the contractor's location in Virginia. Workforce implications include employment for scientists, engineers, and support staff at Utron Inc.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee contracts can incentivize higher spending to increase the fixed fee base.
- Lack of specific performance metrics in the summary makes it hard to gauge true value.
- Long contract duration (over 6 years) increases exposure to potential cost escalations or scope creep.
Positive Signals
- Awarded under full and open competition, suggesting a fair process.
- The R&D focus indicates investment in potentially critical future technologies.
- Contractor is Utron Inc., whose specific track record would need further investigation.
Sector Analysis
This contract falls within the Research and Development in the Physical, Engineering, and Life Sciences sector (NAICS code 541710). This sector is characterized by innovation and often involves long-term projects with uncertain outcomes. Federal spending in this area is crucial for national security, technological advancement, and economic competitiveness. Comparable spending benchmarks are difficult to establish due to the highly specialized nature of R&D, but the $18.2 million award over several years is a significant investment.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications specifically mandated for small businesses through a set-aside program. The prime contractor, Utron Inc., may still engage small businesses as subcontractors based on their own procurement needs, but this is not a requirement stemming from the contract's award terms.
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 tied to the contract's milestones and deliverables, as well as the cost-plus-fixed-fee structure. Transparency is generally facilitated through contract databases like FPDS, but detailed operational oversight and Inspector General jurisdiction would depend on specific DoD policies and the nature of the R&D conducted.
Related Government Programs
- Department of Defense Research and Development
- Contractor: Utron Inc.
- NAICS 541710: Research and Development in the Physical, Engineering, and Life Sciences
Risk Flags
- Cost-Plus-Fixed-Fee contract type carries inherent risk of cost overruns.
- Limited information on the number of bidders in a 'full and open' competition.
- Lack of specific performance metrics makes value assessment challenging.
- Contractor's past performance and specific R&D outcomes require further investigation.
Tags
department-of-defense, research-and-development, physical-engineering-life-sciences, definitive-contract, cost-plus-fixed-fee, full-and-open-competition, small-business-not-applicable, virginia, utron-inc, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $18.2 million to UTRON INC.. RESEARCH AND DEVELOPMENT IN THE PHYSICAL, ENGINEERING, AND LIFE SCIENCES
Who is the contractor on this award?
The obligated recipient is UTRON 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 $18.2 million.
What is the period of performance?
Start: 2006-06-28. End: 2012-03-16.
What is the specific nature of the R&D being conducted under this contract?
The provided data identifies the contract's purpose as 'Research and Development in the Physical, Engineering, and Life Sciences' under NAICS code 541710. However, it does not specify the precise research areas or objectives. This could range from materials science, aerospace engineering, biotechnology, or other advanced scientific fields critical to national defense. A deeper dive into contract line item numbers (CLINs) or associated documentation would be necessary to understand the specific R&D activities funded by the $18.2 million award.
How does Utron Inc.'s performance on this contract compare to similar R&D contracts awarded by the DoD?
Assessing Utron Inc.'s performance requires access to historical performance reviews, past performance questionnaires (PPQs), and potentially award fee determinations, none of which are included in the provided summary data. Without this information, it's impossible to benchmark their performance against similar R&D contracts. Factors to consider would include adherence to schedule, budget, technical objectives, and overall quality of research outcomes. A review of their contract history with the government, including any past disputes or terminations, would also be informative.
What is the typical profit margin for Cost Plus Fixed Fee (CPFF) R&D contracts of this size and duration?
CPFF contracts are designed to cover allowable costs plus a negotiated fixed fee, which represents the contractor's profit. For R&D contracts, the fixed fee is typically a percentage of the estimated cost, and this percentage can vary based on factors like risk, complexity, and market rates. While specific profit margins are often considered sensitive business information, industry averages for R&D CPFF contracts might range from 7-15% of the total contract cost. The 'fairness' of Utron Inc.'s fee would depend on the specific negotiation and the perceived risk and value proposition of the R&D effort.
What are the key performance indicators (KPIs) used to measure the success of this R&D contract?
The provided data does not detail the specific Key Performance Indicators (KPIs) for this contract. For R&D contracts, KPIs often relate to achieving specific technical milestones, successful prototype development, data generation, scientific publications, or the transition of research findings into practical applications or further development phases. The success of a CPFF contract is also measured by the contractor's ability to manage costs within the estimated ceiling while achieving the defined research objectives. Without access to the contract's statement of work (SOW) or performance work statement (PWS), identifying these KPIs is not possible.
How has federal spending in the 'Research and Development in the Physical, Engineering, and Life Sciences' sector evolved over the past decade?
Federal spending in the 'Research and Development in the Physical, Engineering, and Life Sciences' sector (NAICS 541710) has generally seen fluctuations driven by national priorities, budget allocations, and economic conditions. While specific aggregate data for this NAICS code isn't readily available in the provided snippet, overall federal R&D obligations have historically been substantial, with significant portions allocated to defense, health, and science agencies. Trends often show increased investment during periods of perceived national security threats or technological competition, and potential decreases during fiscal austerity. Understanding these broader trends provides context for the $18.2 million awarded to Utron Inc.
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: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 999
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 8506 WELLINGTON RD STE 200, MANASSAS, VA, 20109
Business Categories: Category Business, Small Business
Financial Breakdown
Contract Ceiling: $18,242,221
Exercised Options: $18,242,221
Current Obligation: $18,242,221
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2006-06-28
Current End Date: 2012-03-16
Potential End Date: 2012-03-16 00:00:00
Last Modified: 2016-07-18
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