NASA's $14.7M contract with California Institute of Technology for R&D in physical sciences shows a high cost per unit
Contract Overview
Contract Amount: $14,772,850 ($14.8M)
Contractor: California Institute of Technology
Awarding Agency: National Aeronautics and Space Administration
Start Date: 2003-10-01
End Date: 2005-09-30
Contract Duration: 730 days
Daily Burn Rate: $20.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 51
Pricing Type: COST PLUS AWARD FEE
Sector: R&D
Official Description: MLS
Place of Performance
Location: PASADENA, LOS ANGELES County, CALIFORNIA, 91125
Plain-Language Summary
National Aeronautics and Space Administration obligated $14.8 million to CALIFORNIA INSTITUTE OF TECHNOLOGY for work described as: MLS Key points: 1. The contract value of $14.7 million over two years suggests a significant investment in specialized research. 2. The 'NOT COMPETED' award type indicates a lack of competitive bidding, potentially impacting price discovery. 3. The 'COST PLUS AWARD FEE' contract type allows for performance-based incentives, but can lead to cost overruns if not managed carefully. 4. The contract's duration of 730 days (2 years) is typical for research and development projects of this nature. 5. The North American Industry Classification System (NAICS) code 541710 points to a focus on research and development in physical, engineering, and life sciences. 6. The contract was awarded to a single entity, raising questions about the breadth of available expertise and potential alternatives.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging without specific details on the research scope and deliverables. However, the 'COST PLUS AWARD FEE' structure, while common for R&D, can sometimes lead to higher costs compared to fixed-price contracts if performance incentives are not tightly aligned with cost control. The lack of competition further complicates a direct value assessment against market alternatives.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed among multiple potential bidders. This typically occurs when a specific entity possesses unique capabilities, intellectual property, or is deemed essential for a particular research objective. The absence of competition means that taxpayers did not benefit from the price reductions that can arise from a competitive bidding process.
Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible price through market competition, potentially leading to higher costs for taxpayers.
Public Impact
The primary beneficiaries are likely researchers and institutions involved in advanced physical, engineering, and life sciences research. The services delivered are expected to advance scientific knowledge and technological capabilities within NASA's mission areas. The geographic impact is primarily centered in California, where the California Institute of Technology is located. The contract supports a highly specialized workforce of scientists, engineers, and research support staff.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may have led to a higher price than could have been achieved through a competitive process.
- The 'Cost Plus Award Fee' structure carries inherent risks of cost escalation if not rigorously managed.
- Limited transparency due to sole-source award makes it difficult to assess the full value proposition for taxpayers.
Positive Signals
- Award to a reputable research institution like Caltech suggests a high likelihood of quality research outcomes.
- The focus on R&D aligns with NASA's strategic goals for scientific and technological advancement.
- The contract duration allows for in-depth research and development activities.
Sector Analysis
This contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences. This sector is characterized by innovation, long development cycles, and often requires specialized expertise. Comparable spending in this area by government agencies is substantial, reflecting the critical role of R&D in national security, technological advancement, and scientific discovery. The market for R&D services is diverse, ranging from academic institutions to private research firms.
Small Business Impact
This contract does not appear to have a small business set-aside component, nor is there information suggesting significant subcontracting opportunities for small businesses. The award to a large research institution like Caltech typically means the primary work is performed in-house or by other large entities, with limited direct benefit to the small business ecosystem.
Oversight & Accountability
Oversight for this contract would typically be managed by the awarding agency, NASA, through contract officers and technical monitors. Accountability measures would be tied to the performance objectives and award fee criteria outlined in the 'Cost Plus Award Fee' contract. Transparency is limited due to the sole-source nature of the award, making public scrutiny of the selection and pricing process more difficult.
Related Government Programs
- NASA Research and Development Contracts
- Federal Research Grants
- Scientific Research Services
Risk Flags
- Sole-source award limits price competition.
- Cost-plus contract type carries inherent cost escalation risk.
- Lack of detailed performance metrics in summary data hinders value assessment.
Tags
research-and-development, nasa, california, sole-source, cost-plus-award-fee, physical-sciences, engineering-sciences, life-sciences, academic-institution, federal-contract
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $14.8 million to CALIFORNIA INSTITUTE OF TECHNOLOGY. MLS
Who is the contractor on this award?
The obligated recipient is CALIFORNIA INSTITUTE OF TECHNOLOGY.
Which agency awarded this contract?
Awarding agency: National Aeronautics and Space Administration (National Aeronautics and Space Administration).
What is the total obligated amount?
The obligated amount is $14.8 million.
What is the period of performance?
Start: 2003-10-01. End: 2005-09-30.
What specific research objectives were outlined in this contract, and how do they align with NASA's broader mission?
The provided data indicates the contract is for 'Research and Development in the Physical, Engineering, and Life Sciences' under NAICS code 541710. While the specific research objectives are not detailed in the summary data, such contracts typically support NASA's exploration, science, and aeronautics directorates. For example, research could pertain to materials science for spacecraft, advanced propulsion systems, life support in space, or fundamental physics relevant to space missions. The alignment would be assessed by reviewing the Statement of Work (SOW) and NASA's strategic plan for the period of performance (2003-2005).
How does the 'Cost Plus Award Fee' (CPAF) structure typically influence contractor performance and cost control compared to other contract types?
A CPAF contract provides for a base fee that is a percentage of the estimated cost, plus an award fee earned for meeting or exceeding performance objectives. This structure incentivizes contractors to perform well by offering additional compensation for exceptional performance. However, it can also lead to higher overall costs compared to fixed-price contracts because the government bears more of the cost risk. Effective management by the government is crucial to ensure that award fees are tied to meaningful performance improvements and that costs remain within reasonable bounds. Without clear and measurable performance metrics, CPAF can sometimes result in cost overruns.
Given the sole-source nature, what due diligence did NASA perform to ensure Caltech was the only viable option for this research?
Sole-source justifications typically require extensive documentation demonstrating why competition is not feasible. This often involves identifying unique capabilities, proprietary technology, or critical expertise possessed solely by the chosen contractor. NASA would have likely conducted market research to confirm the absence of other capable sources, reviewed existing partnerships, and documented the specific requirements that only Caltech could meet. The justification would need to be approved by appropriate procurement officials, ensuring that the decision was not arbitrary and served the government's best interests, even without competition.
What is the historical spending pattern for NASA with the California Institute of Technology for similar R&D services?
To assess historical spending patterns, one would need to query federal procurement databases for all contracts awarded by NASA to the California Institute of Technology (Caltech) under relevant NAICS codes (like 541710) over an extended period. This would reveal the volume, value, and types of contracts awarded. A trend analysis could show if spending has increased or decreased, if contract types have varied, and if Caltech has been a consistent partner for NASA's R&D needs. Without access to such a historical dataset, it's impossible to provide specific figures, but Caltech is a well-known and highly regarded research institution with a long history of receiving federal research funding.
What are the potential risks associated with a 'Cost Plus Award Fee' contract for specialized R&D, and how are they mitigated?
The primary risks with CPAF for specialized R&D include potential cost overruns if performance metrics are poorly defined or if the research proves more complex than anticipated. There's also a risk that the award fee structure might incentivize meeting minimum requirements rather than true innovation if not carefully structured. Mitigation strategies employed by NASA would include rigorous oversight, clearly defined and measurable performance objectives tied to the award fee, regular progress reviews, and strong contract management to ensure alignment between cost, schedule, and performance. Independent cost estimates and technical evaluations are also crucial.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences
Product/Service Code: RESEARCH AND DEVELOPMENT › Space R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 51
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 4800 OAK GROVE DR, PASADENA, CA, 91109
Business Categories: Category Business, Government, U.S. National Government, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $15,356,300
Exercised Options: $15,356,300
Current Obligation: $14,772,850
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: NAS703001
IDV Type: IDC
Timeline
Start Date: 2003-10-01
Current End Date: 2005-09-30
Potential End Date: 2005-09-30 00:00:00
Last Modified: 2017-04-18
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