NASA's $21.9M NESC Support contract to Caltech, a sole-source award, spanned over a decade
Contract Overview
Contract Amount: $21,897,883 ($21.9M)
Contractor: California Institute of Technology
Awarding Agency: National Aeronautics and Space Administration
Start Date: 2003-12-16
End Date: 2015-09-30
Contract Duration: 4,306 days
Daily Burn Rate: $5.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 51
Pricing Type: COST PLUS AWARD FEE
Sector: R&D
Official Description: NESC SUPPORT
Place of Performance
Location: PASADENA, LOS ANGELES County, CALIFORNIA, 91125
Plain-Language Summary
National Aeronautics and Space Administration obligated $21.9 million to CALIFORNIA INSTITUTE OF TECHNOLOGY for work described as: NESC SUPPORT Key points: 1. The contract's long duration and sole-source nature raise questions about potential cost efficiencies and competitive pricing. 2. While Caltech is a reputable research institution, the lack of competition limits benchmarking against other potential providers. 3. Performance context is difficult to assess without clear metrics on the 'NESC Support' delivered. 4. The contract's focus on R&D in physical, engineering, and life sciences positions it within a critical but specialized sector. 5. Risk indicators include the extended period without re-competition and the cost-plus award fee structure, which can incentivize cost growth.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging due to its sole-source nature and the specialized 'NESC Support' services provided. The Cost Plus Award Fee (CPAF) structure, while allowing for flexibility, can sometimes lead to higher costs compared to fixed-price contracts if not managed rigorously. Without comparable contracts for similar R&D support services, assessing whether the $21.9 million expenditure over its 12-year period represented excellent value is difficult. The extended duration suggests a sustained need, but also a potential missed opportunity for competitive bidding to drive down costs.
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 approach is typically justified when only one source is capable of meeting the government's needs, often due to unique capabilities, specialized knowledge, or existing infrastructure. However, the lack of competition means there was no opportunity to solicit bids from multiple vendors, which could have potentially led to lower prices or more innovative solutions. The absence of a competitive process limits transparency in price discovery.
Taxpayer Impact: For taxpayers, a sole-source award means there's less assurance that the government secured the best possible price and value. Without competition, the potential for cost savings through market forces is forgone.
Public Impact
The primary beneficiary is NASA, which received specialized research and development support for its engineering and safety center. The services delivered likely contributed to NASA's mission by providing expertise in physical, engineering, and life sciences. The geographic impact is primarily centered around NASA facilities and the contractor's location in California. The contract supported a highly specialized workforce within the research and development sector, likely involving scientists and engineers.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potential value for money.
- Cost Plus Award Fee structure can incentivize cost overruns if not closely monitored.
- Extended contract duration without re-competition may indicate a lack of market exploration.
- Lack of detailed performance metrics makes assessing effectiveness difficult.
Positive Signals
- Awarded to a reputable research institution (Caltech) with demonstrated expertise.
- Long duration suggests a sustained and critical need for the services provided.
- Focus on R&D aligns with advancing scientific and technological capabilities.
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 innovation and technological advancement. Comparable spending in this sector can vary widely depending on the agency and the specific research focus. However, long-term, sole-source R&D contracts with academic institutions are not uncommon when unique expertise is required, though they often face scrutiny regarding value and competition.
Small Business Impact
There is no indication that this contract involved small business set-asides or significant subcontracting opportunities for small businesses. The award to a large academic institution like Caltech suggests the primary focus was on specialized research capabilities rather than broad market participation. This contract likely had minimal direct impact on the small business ecosystem.
Oversight & Accountability
Oversight for this contract would have been primarily managed by NASA's contracting officers and program managers. The Cost Plus Award Fee structure implies performance metrics and award criteria were established, allowing for oversight of contractor performance and costs. Transparency is limited by the sole-source nature and the proprietary nature of R&D work. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse.
Related Government Programs
- NASA Research and Development Contracts
- Engineering and Technical Services Contracts
- Cost Plus Award Fee Contracts
- Sole Source Research Contracts
- Aerospace Research and Development
Risk Flags
- Sole Source Justification
- Extended Contract Duration
- Cost Plus Award Fee Structure
- Lack of Competition
Tags
nasa, research-and-development, california, sole-source, cost-plus-award-fee, delivery-order, long-term, academic-institution, engineering-support, science-research
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $21.9 million to CALIFORNIA INSTITUTE OF TECHNOLOGY. NESC SUPPORT
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 $21.9 million.
What is the period of performance?
Start: 2003-12-16. End: 2015-09-30.
What specific services did the NESC Support contract entail for NASA?
The 'NESC Support' contract provided research and development services to NASA's Engineering and Safety Center (NESC). While the specific deliverables are not detailed in the provided data, NESC's mission is to provide independent technical expertise across NASA programs to ensure safety and mission success. This typically involves analysis, testing, and consultation on complex engineering challenges, anomaly resolution, and risk assessments for flight hardware and systems. The contract likely supported these core functions by leveraging Caltech's specialized knowledge and research capabilities in areas relevant to aerospace engineering and safety.
How does the Cost Plus Award Fee (CPAF) structure compare to other contract types in R&D settings?
The Cost Plus Award Fee (CPAF) contract type is common in R&D and complex service environments where defining precise outcomes and costs upfront is difficult. It reimburses the contractor for allowable costs incurred plus a fee that is composed of a fixed base amount and an award amount. The award amount is determined based on the contractor's performance against pre-defined criteria. Compared to fixed-price contracts, CPAF offers more flexibility for the government to adapt to evolving project needs but can potentially lead to higher costs if performance incentives are not well-structured or if oversight is lax. It differs from Cost Plus Incentive Fee (CPIF) by having a subjective award component determined by the government, rather than a formulaic sharing of cost variances.
What are the implications of a sole-source award for a contract of this duration and value?
A sole-source award for a contract valued at nearly $22 million and spanning over 12 years suggests that NASA determined only the California Institute of Technology (Caltech) possessed the unique capabilities required for the NESC Support services. While this can ensure continuity and access to specialized expertise, it bypasses the competitive bidding process. This lack of competition means taxpayers may not have benefited from potentially lower prices or innovative solutions that could have emerged from a competitive environment. It also raises questions about whether market research was adequately conducted to ensure no other sources could meet the need, or if the need evolved in a way that should have triggered re-competition.
What is the typical track record of the California Institute of Technology as a government contractor?
The California Institute of Technology (Caltech) has a long and distinguished history of performing research and development for various U.S. government agencies, particularly NASA and the Department of Defense. Caltech is renowned for its scientific and engineering prowess and often secures contracts for highly specialized, cutting-edge research. Its track record generally reflects successful execution of complex scientific endeavors and contributions to significant technological advancements. While specific performance details for individual contracts vary, Caltech's overall reputation as a leading research institution suggests a strong capability to fulfill demanding government R&D requirements.
How does the $21.9 million spending on NESC Support compare to NASA's overall R&D budget?
The $21.9 million spent over approximately 12 years on this NESC Support contract represents a relatively small fraction of NASA's overall Research and Development (R&D) budget. NASA's annual R&D budget typically runs into the billions of dollars. For example, in fiscal years around the period this contract was active (2003-2015), NASA's total budget often exceeded $15 billion, with a significant portion allocated to science, aeronautics, and exploration R&D. Therefore, while $21.9 million is a substantial sum, it is a modest investment within the broader context of NASA's extensive research and development activities, likely focused on a critical but niche support function.
What risks are associated with long-term, sole-source R&D contracts?
Long-term, sole-source R&D contracts carry several inherent risks. Firstly, the lack of competition can lead to reduced pressure on the contractor to control costs or innovate, potentially resulting in diminished value for money. Secondly, the government may become overly reliant on a single contractor, creating a 'lock-in' effect that makes switching providers difficult or costly, even if performance declines. Thirdly, without regular re-competition, the contract may not reflect current market prices or technological advancements. Finally, the extended duration can sometimes mask underlying issues with performance or cost management if oversight is not consistently rigorous throughout the contract's life.
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: $24,407,000
Exercised Options: $24,407,000
Current Obligation: $21,897,883
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: NAS703001
IDV Type: IDC
Timeline
Start Date: 2003-12-16
Current End Date: 2015-09-30
Potential End Date: 2015-09-30 00:00:00
Last Modified: 2021-02-18
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