DoD's $2.6B AEGIS RDT&E Contract Awarded to JHU APL Raises Questions on Competition
Contract Overview
Contract Amount: $25,984,194 ($26.0M)
Contractor: THE Johns Hopkins University Applied Physics Laboratory LLC
Awarding Agency: Department of Defense
Start Date: 2018-09-28
End Date: 2021-12-31
Contract Duration: 1,190 days
Daily Burn Rate: $21.8K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: AEGIS COMBAT SYSTEMS RDT&E - BFC14
Place of Performance
Location: LAUREL, HOWARD County, MARYLAND, 20723
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $26.0 million to THE JOHNS HOPKINS UNIVERSITY APPLIED PHYSICS LABORATORY LLC for work described as: AEGIS COMBAT SYSTEMS RDT&E - BFC14 Key points: 1. Significant RDT&E spending on a critical defense system. 2. Sole awardee suggests potential lack of competitive pressure. 3. High contract value warrants scrutiny of cost-effectiveness. 4. Focus on advanced research and development in a specialized sector.
Value Assessment
Rating: questionable
The contract value of $2.6 billion for RDT&E is substantial. Without competitive bidding, it's difficult to assess if this price reflects fair market value or if taxpayers are overpaying for the research and development services provided by JHU APL.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and competitive pressure, potentially leading to higher costs than if multiple vendors had vied for the contract.
Taxpayer Impact: The lack of competition on a contract of this magnitude raises concerns about the efficient use of taxpayer funds, as alternative, potentially more cost-effective solutions may not have been explored.
Public Impact
Impacts the development of advanced naval defense capabilities. Potential for significant long-term investment in a single entity. Raises questions about the government's strategy for fostering innovation in defense R&D.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- High contract value
Positive Signals
- Award to a reputable research institution
- Focus on critical RDT&E
Sector Analysis
This contract falls within the Research and Development sector, specifically for physical and engineering sciences. The $2.6 billion value is substantial for RDT&E, and the sole-source nature warrants comparison to similar large-scale, non-competed RDT&E contracts.
Small Business Impact
The contract was awarded to The Johns Hopkins University Applied Physics Laboratory LLC, which is not typically considered a small business. There is no indication that small businesses were involved as subcontractors, suggesting limited direct impact on the small business sector.
Oversight & Accountability
Given the sole-source nature and significant value, robust oversight is crucial to ensure the RDT&E objectives are met efficiently and effectively, and that costs are reasonable. Further review of the justification for the sole-source award is recommended.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competitive bidding
- Potential for inflated costs
- Limited innovation due to single-source provider
- Dependency on a single research entity
- Insufficient transparency on justification for sole-source award
Tags
research-and-development-in-the-physical, department-of-defense, md, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $26.0 million to THE JOHNS HOPKINS UNIVERSITY APPLIED PHYSICS LABORATORY LLC. AEGIS COMBAT SYSTEMS RDT&E - BFC14
Who is the contractor on this award?
The obligated recipient is THE JOHNS HOPKINS UNIVERSITY APPLIED PHYSICS LABORATORY LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $26.0 million.
What is the period of performance?
Start: 2018-09-28. End: 2021-12-31.
What is the justification for awarding this significant RDT&E contract on a sole-source basis, and what steps were taken to ensure the best possible value was obtained for taxpayers?
The justification for a sole-source award typically involves unique capabilities, critical national security needs, or lack of viable alternatives. Without access to the specific justification documentation, it's impossible to detail the steps taken. However, for contracts of this size, agencies are expected to conduct thorough market research and document why competition is not feasible or advantageous.
What are the potential risks associated with awarding a $2.6 billion RDT&E contract to a single entity without competition, particularly concerning innovation and long-term cost control?
The primary risks include stifled innovation due to the absence of competitive ideas, potential for cost overruns without competitive pressure to optimize spending, and a lack of alternative solutions if the chosen approach proves problematic. It can also create a dependency on a single provider, potentially limiting future flexibility and increasing long-term costs.
How does the effectiveness of RDT&E performed under this sole-source contract compare to similar projects that have undergone competitive bidding processes?
Direct comparison is challenging without specific performance metrics and cost data for comparable competitive contracts. However, competitive processes often drive innovation and cost efficiency through diverse approaches and price pressures. Sole-source awards, while sometimes necessary for unique expertise, may lack these inherent drivers of effectiveness and value unless rigorously managed and overseen.
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: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: THE Johns Hopkins University
Address: 11100 JOHNS HOPKINS RD, LAUREL, MD, 20723
Business Categories: Category Business, Limited Liability Corporation, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $27,541,042
Exercised Options: $27,541,042
Current Obligation: $25,984,194
Actual Outlays: $2,916,096
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N0002413D6400
IDV Type: IDC
Timeline
Start Date: 2018-09-28
Current End Date: 2021-12-31
Potential End Date: 2021-12-31 00:00:00
Last Modified: 2022-04-01
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