DoD awards $159M R&D contract to Verus Research for advanced technology development

Contract Overview

Contract Amount: $15,938,404 ($15.9M)

Contractor: Verus Research, LLC

Awarding Agency: Department of Defense

Start Date: 2023-07-31

End Date: 2026-06-30

Contract Duration: 1,065 days

Daily Burn Rate: $15.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: LABOR/MATERIALS/ODCS

Place of Performance

Location: ALBUQUERQUE, BERNALILLO County, NEW MEXICO, 87110

State: New Mexico Government Spending

Plain-Language Summary

Department of Defense obligated $15.9 million to VERUS RESEARCH, LLC for work described as: LABOR/MATERIALS/ODCS Key points: 1. Contract focuses on research and development in physical, engineering, and life sciences. 2. Significant investment in a single contractor suggests a focus on specialized capabilities. 3. Contract duration of over two years indicates a project with substantial development phases. 4. The 'Cost Plus Fixed Fee' structure allows for cost reimbursement with a predetermined profit. 5. Geographic concentration in New Mexico may indicate regional specialization in R&D.

Value Assessment

Rating: fair

The contract value of $159 million for R&D services is substantial. Without specific deliverables or benchmarks, it is difficult to assess value for money. The 'Cost Plus Fixed Fee' (CPFF) contract type can sometimes lead to cost overruns if not managed tightly, but it also allows for flexibility in research environments. Benchmarking this against similar R&D contracts in the physical sciences would require more detailed scope information.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning Verus Research, LLC was the only vendor considered. This approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The lack of competition means that pricing and innovation were not tested against other market participants.

Taxpayer Impact: Sole-source awards limit opportunities for other businesses and may result in higher costs for taxpayers compared to a competitively bid contract.

Public Impact

Benefits Verus Research, LLC through a significant R&D funding award. Services delivered are in advanced research and development, potentially leading to new technologies. Geographic impact is concentrated in New Mexico, supporting the local R&D ecosystem. Workforce implications include potential job creation and skill development within Verus Research and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential for innovation from other firms.
CPFF contract type requires diligent oversight to manage costs effectively.
Lack of public detail on specific R&D objectives makes performance assessment challenging.

Positive Signals

Award to a single, specialized R&D firm can foster deep expertise and focused innovation.
Long-term contract (over 2 years) allows for sustained development and complex problem-solving.
Focus on advanced physical, engineering, and life sciences aligns with critical national security needs.

Sector Analysis

The contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. This is a critical area for defense innovation, often involving significant investment to maintain technological superiority. The market for such specialized R&D is typically characterized by a few highly capable firms, making sole-source awards more common when unique expertise is required. Comparable spending benchmarks are difficult without knowing the specific technological area.

Small Business Impact

This contract does not appear to have a small business set-aside component (ss=false, sb=false). As a sole-source award to Verus Research, LLC, the primary focus is on the capabilities of the prime contractor. Subcontracting opportunities for small businesses would depend on Verus Research's internal strategy and the nature of the R&D work, but there is no explicit requirement mandated by the contract structure itself.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a Cost Plus Fixed Fee contract, rigorous financial oversight is crucial to monitor expenditures and ensure the fixed fee is earned appropriately. Transparency is limited due to the sole-source nature and the proprietary aspects of R&D, but contract performance reviews and milestone tracking are standard accountability measures.

Related Government Programs

Department of Defense Research and Development Programs
Naval Research Laboratory Contracts
Advanced Technology Development Contracts
Physical Sciences Research Grants

Risk Flags

Sole-source award limits competition.
Cost Plus Fixed Fee contract requires diligent oversight.
R&D scope may be subject to change and cost escalation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.9 million to VERUS RESEARCH, LLC. LABOR/MATERIALS/ODCS

Who is the contractor on this award?

The obligated recipient is VERUS RESEARCH, 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 $15.9 million.

What is the period of performance?

Start: 2023-07-31. End: 2026-06-30.

What is Verus Research, LLC's track record with similar government R&D contracts?

Verus Research, LLC has a history of performing research and development services for the U.S. government, particularly within the Department of Defense. While specific details on past contract values and performance metrics for this exact R&D area are not publicly detailed in this summary, their designation as a sole-source awardee suggests a recognized capability in specialized scientific and engineering fields. Further analysis would involve reviewing their contract history for similar projects, past performance evaluations, and any documented successes or challenges in delivering on previous R&D objectives for federal agencies.

How does the $159 million value compare to similar R&D contracts in physical, engineering, and life sciences?

The $159 million award is a substantial sum for a single R&D contract. In the realm of advanced physical, engineering, and life sciences research, large-scale contracts are common, especially those involving cutting-edge technology development for defense applications. However, without knowing the specific sub-field of R&D (e.g., materials science, aerospace engineering, biotechnology), direct comparison is challenging. Contracts of this magnitude often span several years and involve complex, multi-disciplinary efforts. Benchmarking would require identifying contracts with similar technical scopes, durations, and agencies.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract?

The primary risks with a CPFF contract, especially in R&D, revolve around cost control and scope definition. While the fixed fee provides the contractor with a defined profit margin, the 'cost plus' element means the government reimburses allowable costs. If the research proves more complex or expensive than initially anticipated, costs can escalate significantly. There's also a risk that the contractor might not be sufficiently incentivized to control costs rigorously, as their profit is fixed regardless of the final cost. Effective government oversight is critical to mitigate these risks by scrutinizing expenditures and ensuring adherence to the defined scope.

How effective is a sole-source award likely to be for driving innovation in this R&D area?

Sole-source awards can be effective for driving innovation when the specific R&D requires highly specialized, unique expertise, proprietary technology, or continuity with prior work that only one contractor possesses. In such cases, it allows for deep focus and sustained effort without the overhead of a competitive bidding process. However, the lack of competition inherently removes the pressure to innovate aggressively to win a contract or to offer the most cost-effective solutions. The effectiveness hinges on the contractor's internal drive for innovation and the government's ability to clearly define challenging objectives and monitor progress.

What are the historical spending patterns for R&D in physical, engineering, and life sciences by the Department of the Navy?

The Department of the Navy consistently invests heavily in Research and Development across physical, engineering, and life sciences to maintain technological superiority. Historical spending data indicates a significant and often increasing allocation towards these areas, driven by evolving threats and the need for advanced capabilities in platforms, sensors, materials, and C4ISR systems. While specific figures fluctuate annually based on budget priorities and emerging needs, R&D constitutes a substantial portion of the Navy's overall research, development, test, and evaluation (RDT&E) budget. This contract aligns with that established pattern of prioritizing advanced scientific and technical development.

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 › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0017323RCM02

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 6100 UPTOWN BLVD NE, ALBUQUERQUE, NM, 87110

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

Financial Breakdown

Contract Ceiling: $15,938,404

Exercised Options: $15,938,404

Current Obligation: $15,938,404

Actual Outlays: $2,055,103

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline