DoD's $13M R&D Contract with Alaire Technologies Faces Scrutiny for Potential Value Concerns

Contract Overview

Contract Amount: $12,988,569 ($13.0M)

Contractor: Alaire Technologies Inc

Awarding Agency: Department of Defense

Start Date: 2022-06-30

End Date: 2026-06-30

Contract Duration: 1,461 days

Daily Burn Rate: $8.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: RESEARCH AND DEVELOPMENT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20375

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $13.0 million to ALAIRE TECHNOLOGIES INC for work described as: RESEARCH AND DEVELOPMENT Key points: 1. The contract's value of $12.99M for R&D services is significant, requiring careful assessment. 2. Alaire Technologies Inc. is the sole awardee, raising questions about the extent of competition. 3. The 'Cost Plus Fixed Fee' (CPFF) contract type can lead to cost overruns if not managed tightly. 4. The R&D sector (NAICS 541715) is critical for innovation but often involves inherent risks and uncertainties.

Value Assessment

Rating: questionable

The $12.99M contract value for R&D services needs further justification against industry benchmarks. Without detailed cost breakdowns and performance metrics, it's difficult to ascertain if this represents excellent value for taxpayer money compared to similar research initiatives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

Despite being awarded under 'Full and Open Competition,' the fact that only one entity, Alaire Technologies Inc., received the award suggests potential limitations in the bidding process or a lack of broader market interest. This could impact price discovery.

Taxpayer Impact: The CPFF structure necessitates robust oversight to ensure costs remain reasonable and aligned with project goals, directly impacting taxpayer investment.

Public Impact

Taxpayers may be exposed to cost overruns due to the CPFF contract type. The effectiveness of the R&D outcomes will determine the ultimate return on investment. The Department of the Navy's investment in this specific R&D area could influence future technological advancements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type
Sole awardee despite full and open competition
Lack of clear performance metrics for value assessment

Positive Signals

Supports critical R&D for the Department of the Navy
Long-term contract duration allows for sustained research efforts

Sector Analysis

This contract falls within the Research and Development in the Physical, Engineering, and Life Sciences sector, a high-investment area for government agencies. Benchmarks for R&D contracts vary widely based on scope and complexity, making direct comparisons challenging without more detail.

Small Business Impact

There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. Further analysis would be needed to determine if opportunities were missed for small business participation.

Oversight & Accountability

The 'Cost Plus Fixed Fee' structure requires diligent oversight from the Department of the Navy to manage costs effectively and ensure accountability for research outcomes. Regular performance reviews and audits are crucial.

Related Government Programs

Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Potential for cost overruns due to CPFF structure
Limited competition indicated by single awardee
Lack of transparency on fixed fee justification
Unclear performance metrics for R&D success

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.0 million to ALAIRE TECHNOLOGIES INC. RESEARCH AND DEVELOPMENT

Who is the contractor on this award?

The obligated recipient is ALAIRE TECHNOLOGIES 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 $13.0 million.

What is the period of performance?

Start: 2022-06-30. End: 2026-06-30.

How does the fixed fee component of this CPFF contract compare to industry standards for similar R&D projects, and what is the rationale behind its determination?

The fixed fee in a CPFF contract represents the contractor's profit. Its reasonableness is typically assessed against historical data, complexity of the work, and market rates for similar services. Without specific details on Alaire Technologies' fixed fee percentage and the government's cost analysis, it's difficult to benchmark. A higher-than-average fixed fee could indicate a less competitive bid or a higher perceived risk by the contractor.

What specific R&D objectives does this $13M contract aim to achieve, and how will success be measured to ensure effective use of taxpayer funds?

The contract's objective is Research and Development in Physical, Engineering, and Life Sciences (NAICS 541715). Success measurement typically involves technical milestones, deliverables, prototypes, or reports demonstrating progress towards the stated research goals. The effectiveness hinges on clearly defined, measurable objectives and rigorous evaluation criteria established by the Department of the Navy to ensure the R&D yields valuable, actionable outcomes.

Given the 'Full and Open Competition' award type, why did only one entity, Alaire Technologies Inc., submit a bid or ultimately win the contract?

Several factors could explain a single bid under 'Full and Open Competition.' The specialized nature of the R&D may limit the number of qualified entities. Alternatively, the contract's requirements, solicitation period, or perceived risks might have deterred other potential bidders. The government should investigate if the solicitation was adequately publicized and if the requirements were overly restrictive, potentially hindering broader competition.

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 › General Science and Technology R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0017322R6000

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 10815 HARLEY RD, LORTON, VA, 22079

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $38,567,534

Exercised Options: $30,001,647

Current Obligation: $12,988,569

Actual Outlays: $125,586

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline