NASA's $23.6M R&D contract with Caltech for ATPO shows a lack of competition and potential for cost overruns
Contract Overview
Contract Amount: $23,571,885 ($23.6M)
Contractor: California Institute of Technology
Awarding Agency: National Aeronautics and Space Administration
Start Date: 2008-07-25
End Date: 2012-09-30
Contract Duration: 1,528 days
Daily Burn Rate: $15.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 51
Pricing Type: COST PLUS AWARD FEE
Sector: R&D
Official Description: ASSURANCE TECHNOLOGY PROGRAM OFFICE (ATPO)
Place of Performance
Location: PASADENA, LOS ANGELES County, CALIFORNIA, 91125
Plain-Language Summary
National Aeronautics and Space Administration obligated $23.6 million to CALIFORNIA INSTITUTE OF TECHNOLOGY for work described as: ASSURANCE TECHNOLOGY PROGRAM OFFICE (ATPO) Key points: 1. The contract was awarded on a sole-source basis, raising concerns about price discovery and value for money. 2. A Cost Plus Award Fee (CPA) contract type can incentivize contractors but also carries inherent risks of cost escalation. 3. The contract duration of over 4 years (1528 days) for R&D suggests a complex and potentially evolving scope. 4. The absence of small business set-asides or subcontracting plans indicates limited direct benefit to the small business ecosystem. 5. The contract's performance period ended in 2012, making current value-for-money assessments challenging without updated benchmarks. 6. The North American Industry Classification System (NAICS) code 541710 points to significant R&D investment in physical sciences.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is difficult due to its sole-source nature and the specific R&D focus. The Cost Plus Award Fee (CPA) structure, while common for complex R&D, can lead to higher costs compared to fixed-price contracts if not managed rigorously. Without competitive bids, it's hard to ascertain if the pricing reflects fair market value. The significant duration also implies substantial resource allocation, making cost control a critical factor for assessing value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning there was no open competition. This typically occurs when a specific contractor possesses unique capabilities or intellectual property essential for the project. However, the lack of competition limits the government's ability to solicit multiple bids, potentially leading to higher prices and reduced incentive for cost efficiency.
Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to drive down costs. The sole-source award bypasses the standard process that ensures the government receives the best possible price through market forces.
Public Impact
The primary beneficiary is the California Institute of Technology (Caltech), which received significant funding for research and development. The contract supported research activities under NASA's Assurance Technology Program Office (ATPO). The geographic impact is primarily in California, where Caltech is located, though the research outcomes could have broader national implications. The contract likely supported a workforce of scientists, engineers, and research staff at Caltech.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing and value discovery.
- Cost Plus Award Fee (CPA) contract type can lead to cost overruns if not closely monitored.
- Long contract duration increases the potential for scope creep and cost escalation.
- Lack of transparency regarding the justification for sole-source award.
- Performance period ended in 2012, making current cost comparisons difficult.
Positive Signals
- Caltech is a highly reputable research institution, suggesting potential for high-quality R&D outcomes.
- The contract was for research and development, a critical area for technological advancement.
- NASA's ATPO likely had specific, critical needs that Caltech was uniquely positioned to fulfill.
- The award fee structure, if well-managed, can incentivize contractor performance.
Sector Analysis
This contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences (NAICS 541710). This sector is characterized by innovation, long development cycles, and often requires specialized expertise. NASA's R&D spending is crucial for advancing space exploration, aeronautics, and related technologies. Comparable spending benchmarks in this area are highly project-specific, but NASA consistently invests billions annually in R&D across various institutions.
Small Business Impact
This contract did not include any small business set-asides, nor is there an indication of subcontracting requirements for small businesses. The sole-source nature of the award to a large, established institution like Caltech means that opportunities for small businesses to participate in this specific contract were likely minimal. This contract does not appear to contribute to the government's small business contracting goals.
Oversight & Accountability
Oversight for this contract would have been managed by NASA's Assurance Technology Program Office (ATPO). As a Cost Plus Award Fee (CPA) contract, rigorous oversight of costs, performance, and achievement of award fee criteria would be essential. Transparency regarding the justification for the sole-source award and the performance metrics used for the award fee would be key indicators of accountability. Inspector General involvement would typically occur if specific allegations of fraud, waste, or abuse arose.
Related Government Programs
- NASA Research and Development Contracts
- Cost Plus Award Fee Contracts
- Sole Source Procurements
- Science and Technology Research
- University Research Partnerships
Risk Flags
- Sole-source award lacks competition.
- CPA contract type carries inherent cost escalation risk.
- Long contract duration increases risk exposure.
- Lack of small business participation.
Tags
research-and-development, nasa, california-institute-of-technology, assurance-technology-program-office, cost-plus-award-fee, sole-source, r-and-d, federal-contract, science-and-technology, aerospace, research-services
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $23.6 million to CALIFORNIA INSTITUTE OF TECHNOLOGY. ASSURANCE TECHNOLOGY PROGRAM OFFICE (ATPO)
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 $23.6 million.
What is the period of performance?
Start: 2008-07-25. End: 2012-09-30.
What was the specific justification for awarding this contract on a sole-source basis to the California Institute of Technology?
The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are awarded when only one responsible source is available or capable of providing the required goods or services. For a research institution like Caltech, this could be due to unique expertise, proprietary technology, or a specific research capability that no other entity possesses. NASA would have documented this justification in the contract file, often requiring approval from higher authorities due to the lack of competition. Without access to that documentation, the precise reason remains unknown, but it likely centers on Caltech's specialized scientific or technical capabilities relevant to the ATPO's mission.
How does the Cost Plus Award Fee (CPA) structure typically impact contractor performance and costs compared to other contract types for R&D?
The Cost Plus Award Fee (CPA) contract type is often used for research and development or complex services where the scope is not fully defined or performance outcomes are uncertain. It reimburses the contractor for allowable costs plus a base fee, with an additional award fee determined by the government based on performance against pre-defined criteria. This structure aims to incentivize high performance by offering potential for greater profit. However, it carries a risk of cost escalation because the contractor is reimbursed for costs incurred, and the award fee is subjective. Effective management and clear performance metrics are crucial to ensure the government receives good value and controls costs, unlike fixed-price contracts where the price is set upfront, shifting more risk to the contractor.
What were the key performance objectives or award criteria used to determine the award fee for this contract?
The specific award fee criteria or performance objectives for this contract are not detailed in the provided data. In a CPA contract, these criteria are typically established at the outset and relate to factors such as technical achievement, schedule adherence, cost control, and overall program management. NASA's ATPO would have evaluated Caltech's performance against these metrics throughout the contract period. The 'award fee' component represents the portion of the contractor's potential profit that is contingent upon meeting or exceeding these performance expectations. Without the contract's statement of work or award fee plan, the precise targets remain unknown.
Given the contract ended in 2012, what are the challenges in assessing its current value for money or relevance?
Assessing the current value for money of a contract that concluded over a decade ago presents several challenges. Firstly, economic conditions and market rates for R&D services have changed significantly since 2012, making direct cost comparisons unreliable. Secondly, the technological landscape evolves rapidly; the specific research objectives and outcomes of this contract may be outdated or superseded by newer advancements. Thirdly, without access to performance reports, final deliverables, and NASA's assessment of the research's impact, it's difficult to gauge the true value and return on investment. Benchmarking against contemporary R&D contracts would require identifying projects with highly similar technical scopes and objectives, which can be difficult.
What does the contract's duration of 1528 days (over 4 years) imply about the nature of the research conducted?
A contract duration of over four years for research and development (R&D) typically signifies a project involving complex, long-term scientific inquiry or technological development. Such extended periods are common in R&D because scientific breakthroughs and the development of new technologies often require iterative processes, experimentation, and validation over time. This duration suggests that the Assurance Technology Program Office (ATPO) likely had ambitious goals requiring sustained effort and potentially facing unforeseen challenges or evolving requirements. It implies a significant investment in a particular research area, aiming for substantial advancements rather than short-term deliverables.
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: $25,570,200
Exercised Options: $25,570,200
Current Obligation: $23,571,885
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: NAS703001
IDV Type: IDC
Timeline
Start Date: 2008-07-25
Current End Date: 2012-09-30
Potential End Date: 2012-09-30 00:00:00
Last Modified: 2021-02-17
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