DoD's $6.3M R&D Contract with SAFE INC Faces Scrutiny Over Competition and Value
Contract Overview
Contract Amount: $6,341,088 ($6.3M)
Contractor: Safe Inc
Awarding Agency: Department of Defense
Start Date: 2020-06-19
End Date: 2026-02-22
Contract Duration: 2,074 days
Daily Burn Rate: $3.1K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: RESEARCH&DEVELOPMENT
Place of Performance
Location: TEMPE, MARICOPA County, ARIZONA, 85282
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $6.3 million to SAFE INC for work described as: RESEARCH&DEVELOPMENT Key points: 1. The contract value is $6.34 million, awarded to SAFE INC. 2. Competition was 'Full and Open Competition after Exclusion of Sources', raising questions about true market engagement. 3. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns. 4. The sector is Research and Development, specifically in Physical, Engineering, and Life Sciences.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee structure for this $6.34 million contract warrants close examination. Without clear benchmarks for similar R&D efforts, assessing the reasonableness of costs and the fixed fee is challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The 'Full and Open Competition after Exclusion of Sources' method suggests that while competition was sought, specific sources may have been excluded, potentially limiting the breadth of proposals and price discovery.
Taxpayer Impact: The limited competition could result in higher costs for taxpayers if more competitive bids were not fully explored or considered.
Public Impact
Taxpayers may be paying more than necessary due to limited competition. The R&D outcomes are crucial for the Department of the Navy's technological advancement. The contract's duration of over 2000 days indicates a long-term investment with potential for significant impact.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition method
- Cost Plus Fixed Fee contract type
- Lack of clear unit cost benchmarks
Positive Signals
- Awarded to SAFE INC for critical R&D
- Long contract duration suggests significant project scope
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. Spending in this area is vital for technological advancement but requires careful oversight due to inherent uncertainties and the potential for cost escalation.
Small Business Impact
There is no indication in the provided data whether small businesses were involved in this contract, either as prime contractors or subcontractors. Further investigation is needed to assess small business participation.
Oversight & Accountability
The 'Exclusion of Sources' clause in the competition method warrants specific oversight to ensure fairness and prevent potential impropriety. The Cost Plus Fixed Fee structure also requires diligent monitoring of costs and performance.
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
- Limited competition may inflate costs.
- Cost Plus Fixed Fee structure increases risk of overruns.
- Lack of clear unit cost benchmarks hinders value assessment.
- Potential for reduced innovation due to source exclusion.
Tags
research-and-development-in-the-physical, department-of-defense, az, definitive-contract, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $6.3 million to SAFE INC. RESEARCH&DEVELOPMENT
Who is the contractor on this award?
The obligated recipient is SAFE 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 $6.3 million.
What is the period of performance?
Start: 2020-06-19. End: 2026-02-22.
What specific criteria led to the exclusion of certain sources in the 'Full and Open Competition after Exclusion of Sources' process, and how did this impact the final price?
The exclusion of sources typically occurs when specific technical capabilities, security clearances, or proprietary knowledge are required, limiting the pool of eligible contractors. This limitation can reduce competitive pressure, potentially leading to higher prices than if a broader range of companies had competed. Understanding the justification for exclusion is key to assessing if the final price reflects fair market value under the circumstances.
How will the Department of the Navy ensure cost control and prevent overruns with a Cost Plus Fixed Fee contract for this R&D project?
Effective oversight of a Cost Plus Fixed Fee contract involves rigorous tracking of direct and indirect costs, regular audits, and clear performance metrics. The Navy should establish detailed reporting requirements for SAFE INC, conduct frequent reviews of expenditures against the fixed fee, and ensure that any scope changes are managed through a formal modification process to prevent uncontrolled cost escalation.
What are the expected deliverables and key performance indicators for this R&D contract, and how will their achievement be measured to ensure value for taxpayer money?
Measuring the value of R&D contracts hinges on defining clear, measurable deliverables and key performance indicators (KPIs) upfront. The Department of the Navy must establish specific technical milestones, research outcomes, or prototypes to be achieved. Regular progress reviews against these KPIs, independent technical assessments, and a clear understanding of how successful R&D translates into future operational capabilities are essential for validating taxpayer 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 Nanotechnology and Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 5032 S ASH AVE STE 101, TEMPE, AZ, 85282
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business
Financial Breakdown
Contract Ceiling: $6,341,088
Exercised Options: $6,341,088
Current Obligation: $6,341,088
Actual Outlays: $518,752
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2020-06-19
Current End Date: 2026-02-22
Potential End Date: 2026-02-22 00:00:00
Last Modified: 2026-02-19
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