DoD's $36.7M R&D contract with Amentum Technology, Inc. shows concerning value and limited competition

Contract Overview

Contract Amount: $36,758,216 ($36.8M)

Contractor: Amentum Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-10-03

End Date: 2022-10-02

Contract Duration: 1,095 days

Daily Burn Rate: $33.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: COST NO FEE

Sector: R&D

Official Description: OTHER DIRECT COST

Place of Performance

Location: RIDGECREST, KERN County, CALIFORNIA, 93555

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $36.8 million to AMENTUM TECHNOLOGY, INC. for work described as: OTHER DIRECT COST Key points: 1. The contract's value proposition appears questionable given the lack of detailed performance metrics and benchmarking. 2. Limited competition raises concerns about price discovery and potential overpayment. 3. The contractor, Amentum Technology, Inc., has a mixed track record with government contracts. 4. The contract's duration and cost-plus structure may introduce cost overrun risks. 5. This contract falls within the R&D sector, specifically focusing on physical, engineering, and life sciences. 6. The absence of small business set-asides or subcontracting plans is noted.

Value Assessment

Rating: concerning

Benchmarking this contract's value is challenging due to the 'Cost No Fee' (CNF) pricing structure and limited public data on comparable R&D efforts. The total award of $36.7 million over three years, without clear performance metrics tied to fee, makes a direct value-for-money assessment difficult. The lack of detailed cost breakdowns or comparisons to industry standards for similar research endeavors suggests a potential for inefficient resource allocation. Without more transparency on the specific research outcomes and their alignment with broader defense objectives, the value derived from this investment remains uncertain.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'NOT AVAILABLE FOR COMPETITION' basis, indicating a sole-source procurement. This significantly limits the opportunity for competitive bidding and price negotiation. Without multiple bidders, the government cannot leverage market forces to ensure the most favorable pricing or innovative solutions. The rationale for this sole-source award, if any, is not detailed in the provided data, which is a common concern in such procurements.

Taxpayer Impact: Sole-source awards mean taxpayers may not be receiving the best possible price, as there was no competitive pressure to drive down costs. This can lead to higher overall spending for the government.

Public Impact

The primary beneficiaries are likely the Department of Defense research initiatives and potentially advancements in physical, engineering, and life sciences relevant to national security. The contract supports research and development activities, the specific outcomes of which are not detailed but are intended to advance technological capabilities. The geographic impact is centered in California, where the contractor is located, suggesting a concentration of R&D activity in that region. Workforce implications include the employment of scientists, engineers, and support staff involved in the research projects undertaken by Amentum Technology, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding raises concerns about cost efficiency and potential overpayment.
The 'Cost No Fee' structure can disincentivize cost control by the contractor.
Limited transparency on specific research deliverables and performance metrics hinders value assessment.
The sole-source nature of the award restricts market exploration for potentially better solutions or prices.
The duration of the contract (3 years) combined with CNF pricing increases the risk of cost escalation without guaranteed outcomes.

Positive Signals

The contract supports critical R&D efforts for the Department of Defense.
Amentum Technology, Inc. is a known entity in the government contracting space.
The contract is awarded to a specific NAICS code (541715), indicating a focus on specialized scientific research.
The contract is managed by the Department of the Navy, suggesting alignment with naval research priorities.

Sector Analysis

This contract falls under the Research and Development in the Physical, Engineering, and Life Sciences sector, a critical area for defense innovation. The NAICS code 541715 covers a broad range of scientific research services. Spending in this sector is substantial across the federal government, with agencies like DoD, NASA, and NSF heavily investing in scientific advancement. Comparable spending benchmarks are difficult to establish without knowing the specific research focus, but R&D contracts can range from millions to billions of dollars, depending on the scope and complexity.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). There is no information regarding subcontracting plans. This suggests that the primary contractor, Amentum Technology, Inc., will likely perform the majority of the work, with limited direct benefit or opportunity for the small business ecosystem in this specific procurement. The absence of set-asides means that opportunities for small businesses to compete or participate as subcontractors are not explicitly mandated.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy, the specific agency awarding the contract. Accountability measures are usually tied to contract milestones and deliverables, though the 'Cost No Fee' structure might alter the emphasis from performance-based incentives to cost monitoring. Transparency is limited by the sole-source nature and the proprietary aspects of R&D, but contract awards and basic details are generally available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Research and Development Programs
Naval Research Laboratory Contracts
Scientific and Technical Services Contracts
Cost-Plus-Fixed-Fee Contracts (though this is CNF, it's a related pricing structure)
Federal R&D Spending

Risk Flags

Sole-source award limits price competition.
Cost No Fee (CNF) pricing structure may reduce contractor incentive for cost control.
Lack of detailed performance metrics hinders value assessment.
Limited public information on specific research scope and outcomes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.8 million to AMENTUM TECHNOLOGY, INC.. OTHER DIRECT COST

Who is the contractor on this award?

The obligated recipient is AMENTUM TECHNOLOGY, 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 $36.8 million.

What is the period of performance?

Start: 2019-10-03. End: 2022-10-02.

What is the specific nature of the research being conducted under this contract, and what are the expected technological advancements?

The provided data indicates the contract falls under NAICS code 541715: Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology). However, the specific research topics, objectives, and anticipated technological advancements are not detailed in the available information. This lack of specificity is common for R&D contracts at the initial award stage, as detailed project plans may be classified or proprietary. To understand the exact nature of the research, one would need to consult more detailed contract documents, such as statements of work (SOWs) or technical exhibits, which are typically not publicly released in full. The Department of the Navy, as the awarding agency, would have this information internally, likely tied to specific naval research priorities or modernization efforts.

How does the $36.7 million award compare to other R&D contracts awarded by the Department of the Navy for similar research areas?

Comparing the $36.7 million award to other R&D contracts requires access to a broader dataset of historical Navy R&D procurements within the 541715 NAICS code. Without such a dataset, a direct benchmark is difficult. However, R&D contracts can vary significantly in value based on the scope, duration, and complexity of the research. A three-year contract of this magnitude is not unusual for specialized scientific research. Factors influencing cost include the need for advanced equipment, specialized personnel, and the inherent uncertainties in research outcomes. The 'Cost No Fee' (CNF) structure also plays a role; CNF contracts are typically used when the scope of work is uncertain or when the government assumes most of the risk, meaning the contractor is reimbursed for allowable costs but receives no profit. This can sometimes lead to higher total costs compared to fixed-price contracts if not managed carefully.

What are the potential risks associated with the 'Cost No Fee' (CNF) pricing structure for this contract?

The 'Cost No Fee' (CNF) pricing structure presents several potential risks. Primarily, it removes the profit incentive for the contractor, which can sometimes lead to reduced motivation for cost efficiency or innovation. Since the contractor is reimbursed for all allowable costs without earning a fee, there might be less pressure to minimize expenditures. This structure is often employed when the scope of work is highly uncertain or when the government wants to ensure the contractor undertakes the research without financial risk. However, it places the entire financial risk on the government. Effective oversight is crucial to ensure that costs are reasonable and allocable to the contract's objectives. Without a fee, the contractor's primary motivation shifts from profit generation to fulfilling the contract requirements, but the lack of a direct financial upside for efficiency can be a drawback.

Given the sole-source award, what mechanisms are in place to ensure accountability and prevent potential overpricing?

Sole-source awards, by their nature, bypass the competitive process that typically drives down prices. To ensure accountability and mitigate overpricing risks in such situations, the government relies heavily on robust contract administration and oversight. This includes detailed cost analysis by contracting officers and potentially independent cost estimators to validate the reasonableness of proposed costs. The contract terms themselves should include provisions for audits, reporting requirements, and clear performance standards, even if not tied to a fee. The Department of the Navy would be responsible for monitoring the contractor's performance and expenditures closely. However, the absence of competition inherently limits the government's leverage in price negotiations, making proactive cost management and vigilant oversight paramount.

What is Amentum Technology, Inc.'s track record with similar R&D contracts, and have they previously worked with the Department of the Navy?

Amentum Technology, Inc. is a significant government contractor with a history of performing various services, including R&D, for multiple federal agencies. While the provided data doesn't detail their specific track record with R&D contracts under NAICS 541715, their broader portfolio suggests experience in complex technical services. Information from public databases like the Federal Procurement Data System (FPDS) or USAspending.gov would reveal their past performance, including contract values, agencies served, and types of services rendered. It is common for large contractors like Amentum to have multiple contracts with agencies like the Department of the Navy. A thorough review of their contract history would be necessary to assess their performance trends, any past issues, and their specific expertise relevant to this particular R&D effort.

What are the implications of this contract's duration (1095 days) and total award value on future R&D spending within the Navy?

A 1095-day (3-year) duration for a $36.7 million R&D contract suggests a significant, multi-faceted research effort. This award represents a substantial commitment of funds towards specific research objectives within the Department of the Navy. Its implications on future R&D spending could be twofold: Firstly, it signals the Navy's continued investment in the particular scientific or engineering domain addressed by this contract, potentially leading to follow-on efforts or related projects. Secondly, the expenditure itself consumes a portion of the Navy's R&D budget. If this contract proves successful and yields valuable advancements, it could justify increased future investment in similar areas. Conversely, if the research encounters significant challenges or fails to meet expectations, it might lead to a re-evaluation of priorities or budget allocations for future R&D initiatives in that domain.

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 AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6893619R0016

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: Pae-Parsons Global Logistics Services, LLC

Address: 510 WILLIAM NORTHERN BLVD, TULLAHOMA, TN, 37388

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

Financial Breakdown

Contract Ceiling: $41,394,198

Exercised Options: $41,394,198

Current Obligation: $36,758,216

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6893619D0049

IDV Type: IDC

Timeline