DoD's $12M R&D Contract with Zivko Aeronautics: A Deep Dive into Value and Competition
Contract Overview
Contract Amount: $12,031,414 ($12.0M)
Contractor: Zivko Aeronautics Inc
Awarding Agency: Department of Defense
Start Date: 2015-09-23
End Date: 2021-03-22
Contract Duration: 2,007 days
Daily Burn Rate: $6.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: AIRCRAFT&OPERATIONS IGF::OT::IGF
Place of Performance
Location: GUTHRIE, LOGAN County, OKLAHOMA, 73044
State: Oklahoma Government Spending
Plain-Language Summary
Department of Defense obligated $12.0 million to ZIVKO AERONAUTICS INC for work described as: AIRCRAFT&OPERATIONS IGF::OT::IGF Key points: 1. The contract awarded to Zivko Aeronautics Inc. for $12,031,414.01 focuses on Research and Development in Physical, Engineering, and Life Sciences. 2. The 'NOT COMPETED' award raises questions about potential price discovery and market competition. 3. The contract duration of 2007 days (approx. 5.5 years) suggests a significant, long-term project. 4. The sector is R&D, specifically within the physical and engineering sciences, which can have high innovation potential but also inherent risks.
Value Assessment
Rating: questionable
Without competitive bidding, it's difficult to assess if the $12M price represents fair market value. The Cost Plus Fixed Fee (CPFF) structure can incentivize cost overruns if not closely monitored.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This limits price discovery and may result in higher costs compared to a competitive process.
Taxpayer Impact: The lack of competition could lead to taxpayers potentially overpaying for the research and development services provided.
Public Impact
Taxpayers may be paying a premium due to the absence of competitive bidding. The long-term nature of the contract suggests a substantial investment in a specific technological area. The specific R&D outcomes and their eventual public benefit are not detailed, making direct impact assessment challenging. The Department of Defense's reliance on a single source for this R&D could impact future innovation if alternatives exist.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- Long contract duration
- Unclear public benefit
Positive Signals
- Focus on R&D
- Award to a specialized company
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on physical and engineering sciences. Spending in this area is crucial for technological advancement but often involves higher risk and less predictable outcomes compared to procurement of established goods or services.
Small Business Impact
The awardee, Zivko Aeronautics Inc., is not identified as a small business. The contract's sole-source nature also means no opportunities were created for small businesses to participate through subcontracting or direct competition.
Oversight & Accountability
The 'NOT COMPETED' status warrants close oversight to ensure the contractor is meeting milestones and that costs remain justified. The CPFF structure requires diligent monitoring by the Department of Defense to prevent unnecessary expenditures.
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 cost overruns (CPFF)
- Limited transparency on R&D objectives
- Unclear taxpayer value
- No small business participation
Tags
research-and-development-in-the-physical, department-of-defense, ok, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $12.0 million to ZIVKO AERONAUTICS INC. AIRCRAFT&OPERATIONS IGF::OT::IGF
Who is the contractor on this award?
The obligated recipient is ZIVKO AERONAUTICS 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 $12.0 million.
What is the period of performance?
Start: 2015-09-23. End: 2021-03-22.
What specific R&D objectives were pursued under this contract, and how do they align with DoD's strategic goals?
The contract specifies 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)'. While the exact objectives are not detailed, such R&D typically aims to advance technological capabilities relevant to defense applications. Alignment with strategic goals would require examining the specific research areas funded and their projected contribution to national security or operational effectiveness.
What justification was provided for awarding this contract on a sole-source basis, and were alternatives considered?
The data indicates the contract was 'NOT COMPETED'. Government contracts are typically sole-sourced when only one responsible source can provide the required supplies or services. Justification would likely involve unique capabilities, proprietary technology, or urgent needs. Without further documentation, it's unknown if alternatives were thoroughly considered or if the justification was robust.
How will the effectiveness and value of the R&D outcomes be measured and assessed post-contract completion?
Measuring R&D effectiveness is inherently challenging. Value assessment would likely involve evaluating the technological advancements achieved, their potential for future application, and whether they met the initial research objectives. The CPFF structure suggests milestones may be tied to progress, but a comprehensive post-contract review would be necessary to determine the true return on investment.
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 › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0042115R0025
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 502 AIRPORT RD HANGAR 6, GUTHRIE, OK, 73044
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business
Financial Breakdown
Contract Ceiling: $29,995,598
Exercised Options: $29,995,598
Current Obligation: $12,031,414
Actual Outlays: $790,314
Subaward Activity
Number of Subawards: 21
Total Subaward Amount: $2,106,006
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2015-09-23
Current End Date: 2021-03-22
Potential End Date: 2021-03-22 00:00:00
Last Modified: 2025-10-21
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