Navy awards $60M R&D contract to RCT Systems for advanced shipboard power systems

Contract Overview

Contract Amount: $60,032,070 ($60.0M)

Contractor: RCT Systems, Inc

Awarding Agency: Department of Defense

Start Date: 2021-07-30

End Date: 2026-07-29

Contract Duration: 1,825 days

Daily Burn Rate: $32.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: RCT SYSTEMS, INC. FOR RESEARCH AND DEVELOPMENT ACTIVITIES OF NAVY ADVANCED SHIPBOARD ELECTRICAL POWER AND ENERGY SYSTEMS AND COMPONENTS.

Place of Performance

Location: HALETHORPE, BALTIMORE County, MARYLAND, 21227

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $60.0 million to RCT SYSTEMS, INC for work described as: RCT SYSTEMS, INC. FOR RESEARCH AND DEVELOPMENT ACTIVITIES OF NAVY ADVANCED SHIPBOARD ELECTRICAL POWER AND ENERGY SYSTEMS AND COMPONENTS. Key points: 1. Contract focuses on critical research and development for naval power and energy systems. 2. Sole-source award raises questions about potential missed opportunities for competitive pricing. 3. Long duration suggests a strategic, long-term investment in technological advancement. 4. The contract's value is significant within the specialized R&D sector for defense. 5. Performance risk is managed through a Cost Plus Fixed Fee structure.

Value Assessment

Rating: fair

The contract value of $60 million over five years for R&D is substantial. Benchmarking this specific R&D effort against similar contracts is challenging due to the specialized nature of advanced shipboard electrical power and energy systems. However, the sole-source nature of the award prevents direct price comparison with potential competitors, making it difficult to definitively assess value for money. The Cost Plus Fixed Fee (CPFF) structure, while common for R&D, can lead to cost overruns if not closely managed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, RCT Systems, Inc., was solicited. This approach bypasses the standard competitive bidding process. While sole-source awards can be justified for unique capabilities or urgent needs, they limit the government's ability to explore a wider range of solutions and potentially secure more favorable pricing through open competition.

Taxpayer Impact: The lack of competition means taxpayers may not benefit from the cost savings that could arise from a competitive bidding process, potentially leading to a higher overall expenditure for the research and development.

Public Impact

The U.S. Navy benefits from advancements in its shipboard electrical power and energy systems. This contract supports the development of next-generation technologies for naval vessels. The primary impact is on the technological capabilities and operational readiness of the fleet. Workforce implications include specialized R&D roles within RCT Systems, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost Plus Fixed Fee structure can incentivize cost growth if not rigorously monitored.
Long contract duration may reduce flexibility to adapt to evolving technological needs.

Positive Signals

Focus on critical R&D for national security enhances technological superiority.
Long-term commitment allows for in-depth development of complex systems.
Specialized nature of the work suggests a unique capability held by the contractor.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on advanced power and energy systems for defense applications. The market for specialized defense R&D is characterized by high barriers to entry, long development cycles, and significant government investment. Comparable spending benchmarks are difficult to establish due to the unique nature of naval power systems, but R&D contracts of this magnitude are typical for developing cutting-edge military technologies.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. The prime contractor, RCT Systems, Inc., is likely a large business. There is no explicit information provided regarding subcontracting plans for small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is unclear, though large R&D contracts can sometimes trickle down opportunities.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and technical officers. The Cost Plus Fixed Fee structure necessitates close monitoring of costs and progress to ensure adherence to the fixed fee and prevent unnecessary expenditures. Transparency is generally maintained through contract reporting requirements, and the Inspector General of the Department of Defense would have jurisdiction over any potential fraud, waste, or abuse.

Related Government Programs

Naval Ship Systems Research and Development
Advanced Power Systems Research
Energy Storage Technologies
Department of Defense Research Contracts
Shipboard Electrical Systems

Risk Flags

Sole-source award lacks competitive justification.
Cost Plus Fixed Fee structure poses risk of cost escalation.
Limited public information on contractor's specific R&D performance history.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $60.0 million to RCT SYSTEMS, INC. RCT SYSTEMS, INC. FOR RESEARCH AND DEVELOPMENT ACTIVITIES OF NAVY ADVANCED SHIPBOARD ELECTRICAL POWER AND ENERGY SYSTEMS AND COMPONENTS.

Who is the contractor on this award?

The obligated recipient is RCT SYSTEMS, INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $60.0 million.

What is the period of performance?

Start: 2021-07-30. End: 2026-07-29.

What is the specific technological advancement RCT Systems, Inc. is expected to deliver under this contract?

The contract specifies 'research and development activities of Navy advanced shipboard electrical power and energy systems and components.' This broad description suggests the work could encompass a range of innovations, potentially including next-generation power generation, energy storage solutions (like advanced batteries or fuel cells), power distribution and management systems designed for the harsh naval environment, and components that improve efficiency, reliability, or survivability of shipboard power infrastructure. The exact deliverables would be detailed in the contract's statement of work, which is not publicly available in this data snippet. The focus is on enhancing the Navy's capabilities through technological superiority in power and energy.

How does the $60 million contract value compare to historical spending on similar R&D for naval power systems?

Direct historical comparisons for this specific R&D niche are challenging without access to detailed contract databases and specific project scopes. However, $60 million over five years ($12 million annually) for advanced R&D in a critical defense area like naval power systems is a significant but not unprecedented investment. The Department of Defense consistently invests billions in R&D annually across various sectors. The unique nature of shipboard power, driven by evolving threats and operational requirements, often necessitates substantial, long-term funding commitments. This contract's value reflects the complexity and strategic importance of developing cutting-edge solutions for the Navy's future fleet.

What are the primary risks associated with a sole-source Cost Plus Fixed Fee (CPFF) R&D contract?

The primary risks associated with a sole-source CPFF R&D contract are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher costs than if multiple vendors had competed. It also means the government relies on a single contractor's capabilities and pricing without exploring alternatives. Secondly, the CPFF structure, while allowing flexibility for R&D where costs can be uncertain, carries the risk of cost overruns. The contractor is reimbursed for allowable costs plus a fixed fee representing profit. If costs escalate beyond initial estimates, the government pays more. Effective oversight is crucial to manage these risks by scrutinizing costs, ensuring efficient resource utilization, and verifying progress against milestones.

What is RCT Systems, Inc.'s track record in performing R&D for the Department of the Navy?

Information regarding RCT Systems, Inc.'s specific track record with the Department of the Navy for R&D in advanced shipboard electrical power and energy systems is not detailed in the provided data snippet. To assess their track record, one would typically examine past performance evaluations, previous contracts awarded to the company for similar work, and any reported issues or successes. Given this is a sole-source award, it might imply the Navy has prior positive experience or considers RCT Systems to possess unique, indispensable expertise. A deeper dive into federal procurement databases and performance reports would be necessary for a comprehensive evaluation.

What are the potential long-term implications of this contract for naval technological advancement?

This contract has significant potential long-term implications for naval technological advancement. By investing $60 million in R&D for advanced shipboard electrical power and energy systems, the Navy aims to enhance the performance, efficiency, and resilience of its future fleet. Success in this program could lead to breakthroughs in areas such as increased power generation capacity for advanced weapons systems (like directed energy), improved energy storage for extended operational endurance, reduced reliance on fossil fuels, and enhanced survivability through more robust and redundant power infrastructure. These advancements are critical for maintaining a technological edge in a rapidly evolving geopolitical landscape.

Industry Classification

NAICS: Manufacturing › Electrical Equipment Manufacturing › Power, Distribution, and Specialty Transformer Manufacturing

Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002419R4145

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1705 TWIN SPRINGS RD STE 107, BALTIMORE, MD, 21227

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $61,180,749

Exercised Options: $61,180,749

Current Obligation: $60,032,070

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline