NASA's $42.9M contract with California Institute of Technology for R&D services shows a long performance period
Contract Overview
Contract Amount: $42,919,860 ($42.9M)
Contractor: California Institute of Technology
Awarding Agency: National Aeronautics and Space Administration
Start Date: 2003-09-30
End Date: 2012-03-31
Contract Duration: 3,105 days
Daily Burn Rate: $13.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 51
Pricing Type: COST PLUS AWARD FEE
Sector: R&D
Official Description: MICHELSON SCIENCE CENTER
Place of Performance
Location: PASADENA, LOS ANGELES County, CALIFORNIA, 91125
Plain-Language Summary
National Aeronautics and Space Administration obligated $42.9 million to CALIFORNIA INSTITUTE OF TECHNOLOGY for work described as: MICHELSON SCIENCE CENTER Key points: 1. The contract's extended duration suggests a need for sustained research and development efforts. 2. A sole-source award may indicate unique capabilities or a long-standing relationship with the contractor. 3. The cost-plus award fee structure incentivizes performance but requires careful oversight to manage costs. 4. The contract's focus on physical, engineering, and life sciences research aligns with NASA's core mission. 5. Performance was concentrated in California, potentially benefiting the local economy and research ecosystem.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging due to its specific R&D nature and sole-source award. The cost-plus award fee (CPAF) structure, while common for complex R&D, can lead to cost overruns if not managed tightly. The total value of $42.9 million over nearly 8.5 years averages to approximately $5 million annually, which appears reasonable for specialized scientific research, but a direct comparison to similar sole-source R&D contracts would be necessary for a definitive value assessment.
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. This typically occurs when a specific entity possesses unique qualifications, capabilities, or intellectual property essential for the project. While this can ensure specialized expertise, it limits the opportunity for price discovery through competitive bidding and may result in higher costs for the government compared to a fully competed contract.
Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings that can arise from competitive bidding processes, potentially leading to less efficient use of public funds.
Public Impact
The primary beneficiary is NASA, which receives specialized research and development services crucial for its scientific and exploratory missions. The contract supports advanced research in physical, engineering, and life sciences, contributing to scientific knowledge and technological innovation. The geographic impact is concentrated in California, where the California Institute of Technology is located, potentially fostering local scientific talent and infrastructure. The contract likely supports a workforce of researchers, scientists, and technical staff, contributing to the high-skilled employment sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure, potentially increasing costs for taxpayers.
- Cost-plus award fee structure requires robust oversight to prevent cost escalation.
- Long contract duration increases the risk of scope creep or evolving requirements not being adequately addressed.
- Lack of competition makes it difficult to assess if the contractor's pricing is market-competitive.
Positive Signals
- Award to a reputable institution like Caltech suggests a high likelihood of quality research output.
- The extended performance period indicates a sustained need for the services, implying their importance to NASA's objectives.
- The CPAF structure, if managed well, can incentivize contractor performance and innovation.
- The contract supports critical R&D aligned with national scientific and technological advancement goals.
Sector Analysis
This contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences. This is a critical area for government agencies like NASA, driving innovation and technological advancement. The market for specialized scientific R&D is often characterized by a limited number of highly qualified institutions and firms. NASA's spending in this area is substantial, supporting a wide range of scientific inquiry and space exploration initiatives. Comparable spending benchmarks would typically involve analyzing other sole-source or competitively awarded R&D contracts within NASA or other federal agencies for similar scientific disciplines.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Given the sole-source nature and the likely specialized expertise required, it is improbable that significant subcontracting opportunities for small businesses would be mandated or readily available. The focus is on the primary contractor's direct capabilities rather than broader ecosystem engagement.
Oversight & Accountability
Oversight for this contract would primarily reside with the National Aeronautics and Space Administration (NASA). As a cost-plus award fee contract, NASA contracting officers and technical monitors would be responsible for overseeing expenditures, monitoring performance against defined criteria, and determining award fees. Transparency is generally facilitated through contract databases, but detailed performance metrics and fee determinations are typically internal to the agency. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- NASA Research Grants
- National Science Foundation (NSF) Research Contracts
- Department of Defense (DoD) Research and Development
- National Institutes of Health (NIH) Research Grants
Risk Flags
- Sole-source award limits competition.
- Cost-plus award fee structure requires strong oversight.
- Long contract duration may increase risk.
- Lack of transparency in performance metrics for award fee determination.
Tags
nasa, california-institute-of-technology, research-and-development, sole-source, cost-plus-award-fee, california, delivery-order, long-term-contract, science-and-technology, federal-contract
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $42.9 million to CALIFORNIA INSTITUTE OF TECHNOLOGY. MICHELSON SCIENCE CENTER
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 $42.9 million.
What is the period of performance?
Start: 2003-09-30. End: 2012-03-31.
What is the track record of the California Institute of Technology as a federal contractor, particularly with NASA?
The California Institute of Technology (Caltech) has a long and distinguished history of receiving federal funding, particularly from NASA, for its cutting-edge research. As a premier research institution, Caltech consistently secures grants and contracts for scientific and engineering endeavors. Its track record with NASA is extensive, encompassing numerous projects related to space exploration, astrophysics, planetary science, and aeronautics. While specific performance metrics for individual contracts are often not publicly detailed, Caltech's reputation and continued funding by agencies like NASA suggest a strong history of successful project execution and scientific contribution. Their ability to secure significant sole-source contracts further underscores their recognized expertise and value to the government's research objectives.
How does the value of this contract compare to similar R&D contracts awarded by NASA?
Comparing the $42.9 million value of this specific contract to similar NASA R&D contracts requires careful consideration of the research scope, duration, and type of award. Sole-source contracts, like this one, are inherently difficult to benchmark against competitively awarded ones. However, NASA awards numerous large R&D contracts, often in the tens to hundreds of millions of dollars, for complex projects in areas such as space systems development, scientific instrument design, and fundamental research. The annual average of approximately $5 million for this contract appears moderate within NASA's R&D portfolio, especially considering the specialized nature of research conducted by institutions like Caltech. A precise comparison would necessitate identifying contracts with similar scientific objectives, duration, and award types (e.g., sole-source CPAF for basic research).
What are the primary risks associated with a sole-source, cost-plus award fee contract for R&D?
Sole-source, cost-plus award fee (CPAF) contracts for Research and Development (R&D) present distinct risks. The primary risk of a sole-source award is the lack of competitive pressure, which can lead to inflated pricing and reduced incentive for the contractor to find cost efficiencies. For CPAF contracts, the risk lies in cost escalation; the government agrees to cover allowable costs plus a fee that is earned based on performance. If performance metrics are not clearly defined, objectively measured, or if oversight is weak, costs can increase significantly without a commensurate increase in value. Furthermore, R&D inherently involves uncertainty, and the CPAF structure might not always align perfectly with the unpredictable nature of scientific discovery, potentially leading to disputes over performance and fee determination. Robust government oversight and clear performance criteria are crucial to mitigate these risks.
How effective is the Cost-Plus Award Fee (CPAF) structure in incentivizing performance for long-term R&D projects?
The Cost-Plus Award Fee (CPAF) structure can be an effective tool for incentivizing performance in long-term R&D projects, provided it is implemented with clear objectives and rigorous oversight. The 'cost-plus' component ensures that the contractor is reimbursed for incurred costs, which is essential for R&D where expenses can be unpredictable. The 'award fee' component offers the potential for additional profit based on the government's assessment of the contractor's performance against pre-defined criteria. This incentivizes the contractor to go beyond minimum requirements and achieve superior results. For long-term projects, well-defined milestones and performance metrics are critical to ensure the fee structure remains relevant and motivating throughout the contract's life. However, the effectiveness hinges heavily on the government's ability to objectively evaluate performance and administer the award fee fairly and consistently.
What is the historical spending pattern for NASA with the California Institute of Technology in the R&D sector?
NASA's historical spending with the California Institute of Technology (Caltech) in the R&D sector is substantial and spans many years, reflecting Caltech's status as a leading research institution. While this specific contract ($42.9M, 2003-2012) represents a significant investment, it is part of a broader pattern of NASA funding Caltech for various research initiatives. Caltech has consistently been a recipient of NASA grants and contracts across diverse fields such as astrophysics, planetary science, earth science, and engineering. Analyzing total historical spending would require aggregating data from numerous individual awards over decades. However, the consistent flow of funding indicates a strong, long-term partnership and a recognized value proposition that Caltech offers to NASA's mission objectives, making them a frequent and significant awardee in the R&D space.
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: $43,873,900
Exercised Options: $43,873,900
Current Obligation: $42,919,860
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: NAS703001
IDV Type: IDC
Timeline
Start Date: 2003-09-30
Current End Date: 2012-03-31
Potential End Date: 2012-03-31 00:00:00
Last Modified: 2021-02-18
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