DoD's $25.3M C4ISR R&D contract awarded to Assurance Technology Corp shows potential value concerns
Contract Overview
Contract Amount: $25,280,184 ($25.3M)
Contractor: Assurance Technology Corp
Awarding Agency: Department of Defense
Start Date: 2018-09-28
End Date: 2020-09-08
Contract Duration: 711 days
Daily Burn Rate: $35.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::CT:IGF PR 81-1025-18 C4ISR R&D
Place of Performance
Location: CARLISLE, MIDDLESEX County, MASSACHUSETTS, 01741
Plain-Language Summary
Department of Defense obligated $25.3 million to ASSURANCE TECHNOLOGY CORP for work described as: IGF::CT:IGF PR 81-1025-18 C4ISR R&D Key points: 1. The contract's cost-plus-fixed-fee structure may incentivize higher spending. 2. Limited competition raises questions about price discovery and potential overpayment. 3. The contractor's track record and past performance require closer examination. 4. The R&D nature of the contract introduces inherent uncertainty in outcomes. 5. The contract's duration and value warrant scrutiny for efficiency. 6. Benchmarking against similar R&D efforts is crucial for assessing value.
Value Assessment
Rating: questionable
The contract's total value of $25.3 million over 711 days, awarded on a cost-plus-fixed-fee basis, warrants careful evaluation. Without specific performance metrics or comparable R&D projects, it is difficult to definitively assess value for money. The lack of competition further complicates a direct price comparison. However, cost-plus contracts can sometimes lead to higher overall costs if not meticulously managed and monitored for efficiency and necessity of expenditures.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning there was no open competition. This significantly limits the government's ability to leverage market forces to achieve the best possible price and terms. While sole-source awards can be justified in specific circumstances, such as unique capabilities or urgent needs, they reduce transparency and increase the risk of paying a premium.
Taxpayer Impact: The lack of competition means taxpayers may not have received the most cost-effective solution, as there was no incentive for multiple vendors to bid down prices.
Public Impact
The primary beneficiary is the Department of Defense, which receives advancements in C4ISR capabilities. The contract supports research and development in critical command, control, communications, computers, intelligence, surveillance, and reconnaissance technologies. The geographic impact is primarily within Massachusetts, where the contractor is located. The contract likely supports a specialized workforce of engineers and scientists in the defense technology sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing.
- Cost-plus-fixed-fee structure may not incentivize cost efficiency.
- Lack of detailed performance metrics makes value assessment difficult.
- R&D contracts inherently carry risk of unmet objectives.
- Contract duration could lead to scope creep if not managed.
Positive Signals
- Contract supports critical defense R&D.
- Assurance Technology Corp is a specialized defense contractor.
- Fixed fee component provides some cost certainty.
- Contract is managed by the Defense Contract Management Agency.
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance (C4ISR) systems. The defense R&D market is characterized by high specialization, significant government investment, and often long development cycles. Comparable spending benchmarks are difficult to establish due to the unique nature of R&D, but overall defense R&D spending represents a substantial portion of the federal budget.
Small Business Impact
This contract was not awarded to a small business, nor does it appear to have specific small business set-aside provisions. There is no explicit information regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, though the prime contractor may engage small businesses in its supply chain.
Oversight & Accountability
Oversight for this contract is provided by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The contract type (Cost Plus Fixed Fee) necessitates close monitoring of expenditures and progress to ensure funds are used effectively. Transparency is limited due to the sole-source nature, but contract awards are generally reported in federal procurement databases.
Related Government Programs
- DoD C4ISR Modernization Programs
- Defense Research and Development Budget
- Advanced Technology Development Contracts
- Intelligence Community Technology Investments
Risk Flags
- Sole-source award
- Cost-plus contract type
- Lack of detailed performance metrics
- Uncertainty inherent in R&D
Tags
defense, department-of-defense, c4isr, research-and-development, assurance-technology-corp, definitive-contract, cost-plus-fixed-fee, sole-source, massachusetts, contract-management
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $25.3 million to ASSURANCE TECHNOLOGY CORP. IGF::CT:IGF PR 81-1025-18 C4ISR R&D
Who is the contractor on this award?
The obligated recipient is ASSURANCE TECHNOLOGY CORP.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $25.3 million.
What is the period of performance?
Start: 2018-09-28. End: 2020-09-08.
What is the specific R&D objective of this contract, and what are the key performance indicators (KPIs) for success?
The specific R&D objective of this contract is to advance Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance (C4ISR) capabilities. However, the provided data does not detail the specific R&D goals or the key performance indicators (KPIs) that will be used to measure the success of this effort. Typically, for R&D contracts, success is measured by achieving specific technological milestones, demonstrating proof-of-concept, or developing prototypes that meet defined technical specifications. Without these details, it is challenging to assess the contract's effectiveness or the value derived from the investment.
How does the contractor's past performance on similar C4ISR R&D contracts compare to industry benchmarks?
Assurance Technology Corporation's past performance on similar C4ISR R&D contracts is not detailed in the provided data. To assess this, one would need to review their contract history, including on-time delivery, adherence to budget, quality of deliverables, and customer satisfaction ratings from previous government contracts. Benchmarking against industry standards would involve comparing their performance metrics against those of other contractors performing similar R&D work for the Department of Defense or other federal agencies. A review of past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) would be essential for a comprehensive analysis.
What is the rationale for awarding this contract on a sole-source basis, and were any alternatives considered?
The rationale for awarding this contract on a sole-source basis is not provided in the summary data. Sole-source awards are typically justified when only one responsible source can provide the required supplies or services, or when there is a compelling urgency. This could be due to unique proprietary technology, specialized expertise, or a critical need that cannot be met through competitive means. The government contracting agency would have had to document the justification for not conducting a full and open competition, and potentially explore limited sources before resorting to a sole-source award. Without this documentation, the justification remains unclear.
What is the projected return on investment (ROI) or expected technological advancement from this $25.3 million R&D expenditure?
The provided data does not include information on the projected return on investment (ROI) or the specific expected technological advancements from this $25.3 million C4ISR R&D contract. R&D investments are inherently uncertain, and quantifying ROI can be challenging, especially in the early stages. Expected outcomes typically involve advancements in areas like signal processing, data fusion, secure communications, or enhanced surveillance capabilities. The value is often realized through improved military effectiveness, enhanced national security, or the development of technologies that can be transitioned to other applications. A formal cost-benefit analysis or a clear statement of expected technological leaps would be needed to assess ROI.
How does the cost-plus-fixed-fee (CPFF) structure influence cost control and contractor incentives in this specific R&D context?
The Cost-Plus-Fixed-Fee (CPFF) contract structure means the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. In an R&D context, this structure can be beneficial as it allows flexibility to explore innovative solutions without the contractor bearing the full financial risk of cost overruns. However, it can also reduce the contractor's incentive to control costs, as their profit (the fixed fee) is not directly tied to cost savings. Effective oversight by the government is crucial to monitor expenditures, ensure costs are reasonable and allocable, and that the contractor remains focused on achieving the R&D objectives efficiently.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › Space R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0017318RWR13
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 84 S ST, CARLISLE, MA, 01741
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $25,470,666
Exercised Options: $25,470,666
Current Obligation: $25,280,184
Actual Outlays: $469,403
Subaward Activity
Number of Subawards: 654
Total Subaward Amount: $323,474,800
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2018-09-28
Current End Date: 2020-09-08
Potential End Date: 2020-09-08 00:00:00
Last Modified: 2023-08-03
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