DoD's $25.7M training contract awarded to Insitu, Inc. for R&D services

Contract Overview

Contract Amount: $25,764,660 ($25.8M)

Contractor: Insitu, Inc.

Awarding Agency: Department of Defense

Start Date: 2017-07-25

End Date: 2018-09-30

Contract Duration: 432 days

Daily Burn Rate: $59.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: R&D

Official Description: TRAINING

Plain-Language Summary

Department of Defense obligated $25.8 million to INSITU, INC. for work described as: TRAINING Key points: 1. Value for money appears fair given the specialized nature of the R&D services. 2. Competition was limited, raising potential concerns about price discovery. 3. Risk indicators are moderate, with a focus on performance and delivery timelines. 4. Performance context shows a short duration for a research and development effort. 5. Sector positioning is within the defense R&D landscape, focusing on specialized training solutions.

Value Assessment

Rating: fair

Benchmarking this contract's value is challenging due to the specific R&D nature and limited competition. The total award amount of approximately $25.7 million for a 15-month period suggests a significant investment in specialized training development. Without comparable R&D training contracts or detailed cost breakdowns, a precise value-for-money assessment is difficult. However, the firm-fixed-price structure implies that the contractor bears the risk of cost overruns, which can be a positive indicator if managed effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating that only one vendor, Insitu, Inc., was deemed capable of fulfilling the requirement. This lack of competition means that the government did not benefit from a competitive bidding process, which typically drives down prices and fosters innovation. The justification for a sole-source award would need to demonstrate unique capabilities or proprietary technology held by Insitu, Inc.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price. It also limits opportunities for other businesses to compete for government contracts.

Public Impact

The primary beneficiaries are the Department of the Navy personnel who will receive advanced training. Services delivered include research and development for specialized training systems. Geographic impact is likely concentrated within Navy training facilities or operational areas. Workforce implications may involve specialized technical personnel for developing and implementing the training.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition raises concerns about potential overpricing and lack of innovation.
Sole-source award restricts opportunities for other qualified vendors.
Short contract duration for R&D may indicate a narrowly defined scope or phased approach.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor.
Award to a single, potentially specialized vendor may indicate unique capabilities.
Focus on R&D suggests investment in advanced training solutions.

Sector Analysis

The defense sector heavily relies on advanced research and development to maintain technological superiority. Contracts for specialized training systems, particularly those involving R&D, are crucial for equipping military personnel with the skills needed for complex operations. This contract fits within the broader landscape of defense R&D spending, which often involves significant investments in innovation and technology. Comparable spending benchmarks are difficult to establish without more specific details on the training technology.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no information provided regarding subcontracting plans or their impact on the small business ecosystem. Given the sole-source nature and specialized R&D focus, it is less likely that small businesses would be significantly involved unless they are subcontractors to Insitu, Inc.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures would be tied to the firm-fixed-price contract terms, delivery schedules, and performance requirements. Transparency is limited due to the sole-source nature and the proprietary aspects often associated with R&D. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Training Systems
Research and Development Contracts
Naval Aviation Training
Simulation and Modeling

Risk Flags

Sole-source award limits competition.
Lack of detailed performance metrics in provided data.
R&D contracts inherently carry technical risks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.8 million to INSITU, INC.. TRAINING

Who is the contractor on this award?

The obligated recipient is INSITU, 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 $25.8 million.

What is the period of performance?

Start: 2017-07-25. End: 2018-09-30.

What specific R&D activities were undertaken for this training contract?

The provided data indicates the contract was for 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)' with a primary classification of 'TRAINING'. While the specific R&D activities are not detailed, it can be inferred that Insitu, Inc. was engaged in developing novel or advanced training methodologies, technologies, or systems for the Department of the Navy. This could encompass areas such as advanced simulation development, virtual or augmented reality training platforms, or specialized equipment design for realistic training scenarios. The '541712' NAICS code further supports that the core effort was R&D in physical and engineering sciences applied to training solutions.

How does the $25.7 million award compare to other R&D training contracts?

Direct comparison of this $25.7 million award to other R&D training contracts is challenging without access to a comprehensive database of similar sole-source R&D efforts. However, for specialized R&D projects within the defense sector, such an investment is not uncommon, especially if it involves cutting-edge technology or unique capabilities. The duration of the contract (approximately 15 months) suggests a focused R&D effort rather than a long-term development program. To provide a more accurate benchmark, one would need to analyze contracts with similar NAICS codes, contract types (firm-fixed-price), and agencies, while accounting for inflation and the specific technological advancements being pursued.

What are the primary risks associated with a sole-source award for R&D training?

The primary risks associated with a sole-source award for R&D training include a lack of competitive pricing, potentially leading to overpayment by the government. Without competition, there is less incentive for the contractor to innovate aggressively or deliver the most cost-effective solution. Furthermore, the government may become overly reliant on a single vendor, creating long-term dependency and limiting future flexibility. There's also a risk that the unique capabilities justifying the sole-source award might be overstated or that alternative solutions exist but were not explored due to the procurement method. Robust oversight and clear performance metrics are crucial to mitigate these risks.

What is the expected impact of this contract on Insitu, Inc.'s business and the defense training market?

For Insitu, Inc., this $25.7 million contract represents a significant revenue stream and a validation of their R&D capabilities in the defense training sector. It likely strengthens their position as a key provider of specialized training solutions to the Department of the Navy. In the broader defense training market, this contract signals continued investment in advanced R&D for military preparedness. It may also encourage other companies to develop similar specialized capabilities to compete for future R&D training opportunities, potentially driving innovation and competition in the long run, assuming future procurements are competed.

What oversight mechanisms are in place for this sole-source R&D contract?

Oversight for this sole-source R&D contract would primarily be managed by the Department of the Navy's contracting officers and program managers. Key oversight mechanisms would include monitoring contractor progress against defined milestones and deliverables, ensuring adherence to the firm-fixed-price budget, and verifying the technical quality of the R&D outcomes. Contract clauses would likely stipulate reporting requirements, allowing the government to track expenditures and progress. Performance reviews at key stages would be essential to ensure the R&D effort remains aligned with the Navy's training objectives and to identify any potential issues early on. The contract's duration and scope would dictate the intensity and frequency of oversight.

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: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Boeing Company (UEI: 009256819)

Address: 118 E COLUMBIA RIVER WAY, BINGEN, WA, 98605

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

Financial Breakdown

Contract Ceiling: $25,764,660

Exercised Options: $25,764,660

Current Obligation: $25,764,660

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $324,272

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N6833516G0046

IDV Type: BOA

Timeline