NASA's $12M MLCD PRJT FORMULATION contract awarded to California Institute of Technology for R&D
Contract Overview
Contract Amount: $12,039,964 ($12.0M)
Contractor: California Institute of Technology
Awarding Agency: National Aeronautics and Space Administration
Start Date: 2004-03-09
End Date: 2005-12-25
Contract Duration: 656 days
Daily Burn Rate: $18.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 51
Pricing Type: COST PLUS AWARD FEE
Sector: R&D
Official Description: MLCD PRJT FORMULATION
Place of Performance
Location: PASADENA, LOS ANGELES County, CALIFORNIA, 91125
Plain-Language Summary
National Aeronautics and Space Administration obligated $12.0 million to CALIFORNIA INSTITUTE OF TECHNOLOGY for work described as: MLCD PRJT FORMULATION Key points: 1. Contract awarded on a cost-plus-award-fee basis, allowing for flexibility but requiring careful oversight of costs. 2. The contract was not competed, raising questions about potential price discovery and value for money. 3. A long performance period of 656 days suggests a complex or lengthy research and development process. 4. The award was made to a single entity, indicating a potential lack of broader market engagement. 5. The contract's focus on research and development aligns with NASA's mission to advance scientific knowledge. 6. The geographic location of the contractor in California may have implications for local economic impact.
Value Assessment
Rating: questionable
Benchmarking the value of this specific contract is challenging due to its unique R&D nature and lack of competition. The cost-plus-award-fee structure means the final cost is not fixed upfront and depends on performance outcomes. Without comparable non-competed R&D contracts from NASA or other agencies for similar projects, it's difficult to definitively assess if the $12 million expenditure represents excellent value. The absence of competitive bids means there was no market pressure to drive down costs, making a direct price comparison to market rates impossible.
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 vendors. This approach is typically used when a specific entity possesses unique capabilities, expertise, or intellectual property essential for the project. The lack of competition means that NASA did not benefit from the price discovery mechanisms that typically occur in a competitive bidding process, potentially leading to higher costs than might have been achieved otherwise.
Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced likelihood of achieving the lowest possible price for the goods or services procured. It necessitates a higher degree of trust in the awarded contractor's pricing and performance, and places greater emphasis on robust oversight to ensure fair pricing and effective execution.
Public Impact
The primary beneficiary of this contract is the National Aeronautics and Space Administration (NASA), which will receive the results of the MLCD PRJT FORMULATION research. The services delivered are focused on research and development in physical, engineering, and life sciences, contributing to scientific advancement. The geographic impact is primarily centered in California, where the contractor, California Institute of Technology, is located. The contract supports scientific and research personnel at the California Institute of Technology, potentially involving faculty, researchers, and students.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition limits price transparency and potential for cost savings.
- Cost-plus-award-fee structure requires diligent monitoring to prevent cost overruns.
- Sole-source nature raises questions about whether alternative solutions or contractors were adequately considered.
- The long duration of the contract (656 days) increases the risk of scope creep or evolving requirements.
Positive Signals
- Award to a reputable research institution like Caltech suggests a high likelihood of technical expertise.
- Research and Development contracts are crucial for NASA's mission and long-term innovation.
- The award fee component incentivizes contractor performance, potentially leading to better outcomes.
- The contract is for formulation, a critical early stage in project development.
Sector Analysis
The contract falls under the Research and Development (R&D) sector, specifically within the physical, engineering, and life sciences. This sector is characterized by innovation, intellectual property generation, and often long development cycles. NASA is a significant spender in R&D, particularly for space exploration, aeronautics, and related scientific endeavors. Comparable spending benchmarks in this niche R&D area are difficult to establish due to the specialized nature of the work and the typical use of sole-source or limited competition awards for cutting-edge research.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor is a large research institution. There is no explicit information provided regarding subcontracting plans or implications for the small business ecosystem. Given the sole-source nature and the specialized R&D focus, it is less likely that small businesses would be significantly involved as prime contractors, though they might participate as subcontractors if their specialized services were required.
Oversight & Accountability
Oversight for this contract would primarily fall under NASA's program management and contracting officers. The cost-plus-award-fee structure necessitates rigorous monitoring of expenditures and performance against defined award criteria to ensure accountability. Transparency is limited due to the sole-source nature and the proprietary aspects often associated with R&D. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- NASA Research and Development Programs
- Space Exploration Initiatives
- Advanced Technology Development Contracts
- Scientific Research Grants
Risk Flags
- Sole-source award
- Lack of competition
- Cost-plus contract type
- Long contract duration
Tags
research-and-development, nasa, california, cost-plus-award-fee, sole-source, large-contract, physical-sciences, engineering, life-sciences, project-formulation
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $12.0 million to CALIFORNIA INSTITUTE OF TECHNOLOGY. MLCD PRJT FORMULATION
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 $12.0 million.
What is the period of performance?
Start: 2004-03-09. End: 2005-12-25.
What is the specific nature of the 'MLCD PRJT FORMULATION' and why was it deemed suitable for a sole-source award?
The provided data does not detail the specific nature of the 'MLCD PRJT FORMULATION'. However, sole-source awards are typically justified when a particular contractor possesses unique capabilities, proprietary technology, or essential expertise that cannot be replicated by other sources. For NASA, this could involve highly specialized scientific research, development of novel technologies, or continuation of work where the original contractor holds critical intellectual property. The justification for this sole-source award would be documented within NASA's procurement records, likely citing factors such as the contractor's unique qualifications, the need for continuity of research, or the absence of adequate competition for the specific requirements.
How does the 'cost-plus-award-fee' (CPAF) contract type typically function, and what are its implications for cost control?
A Cost-Plus-Award-Fee (CPAF) contract reimburses the contractor for allowable costs incurred plus a fee that has a fixed component and an award component. The award fee is earned based on the contractor's performance against pre-determined criteria, evaluated by the government. This structure incentivizes the contractor to perform well while providing flexibility for research and development projects where outcomes can be uncertain. For cost control, the government must establish clear, objective performance metrics and diligently evaluate performance to ensure the award fee is justified. Without strong oversight, the 'cost-plus' aspect can lead to higher expenditures than fixed-price contracts, and the award fee can be subjective if not managed carefully.
What is the significance of the contract duration (656 days) in the context of R&D projects?
A contract duration of 656 days (approximately 22 months) for an R&D project like 'MLCD PRJT FORMULATION' suggests a substantial undertaking. R&D projects often involve iterative processes, experimentation, data analysis, and potential setbacks, which naturally require extended timelines. This duration indicates that the project is likely complex, requiring significant research effort, development of new methodologies, or extensive testing and validation. Longer durations in R&D can also increase risks related to scope creep, technological obsolescence, or shifts in research priorities. Effective project management and clear milestones are crucial to ensure progress and control costs over such an extended period.
Given the sole-source nature, how can NASA ensure it is receiving fair and reasonable pricing?
Ensuring fair and reasonable pricing on a sole-source contract requires robust government oversight and negotiation. NASA would typically conduct a thorough price analysis, which might involve reviewing the contractor's cost proposals, historical pricing for similar work, and market research on labor rates and material costs. They may also use techniques like should-cost analysis or parametric estimating. The 'award fee' component of the CPAF structure also plays a role; NASA's evaluation of performance against award criteria directly impacts the fee the contractor receives, indirectly influencing the overall cost. Independent cost estimates and negotiation expertise are critical tools for the government in sole-source situations.
What are the potential risks associated with awarding a large R&D contract to a single entity without competition?
The primary risk of awarding a large R&D contract without competition is the potential for inflated costs due to the lack of market pressure. Without competing bids, there's less incentive for the contractor to offer the lowest possible price. Additionally, a sole-source award might mean NASA misses out on innovative approaches or alternative solutions that other capable organizations could have offered. There's also a risk of complacency or reduced efficiency from the contractor, as the threat of losing future business to competitors is absent. Ensuring rigorous oversight, performance management, and fair pricing becomes paramount to mitigate these risks.
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, 28
Business Categories: Category Business, Government, U.S. National Government, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $12,086,000
Exercised Options: $12,086,000
Current Obligation: $12,039,964
Parent Contract
Parent Award PIID: NAS703001
IDV Type: IDC
Timeline
Start Date: 2004-03-09
Current End Date: 2005-12-25
Potential End Date: 2005-12-25 00:00:00
Last Modified: 2012-03-12
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