NASA's $107M telescope contract to Caltech shows R&D focus, but limited competition raises value questions
Contract Overview
Contract Amount: $106,724,732 ($106.7M)
Contractor: California Institute of Technology
Awarding Agency: National Aeronautics and Space Administration
Start Date: 2003-09-30
End Date: 2007-09-24
Contract Duration: 1,455 days
Daily Burn Rate: $73.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: R&D
Official Description: ACTIVE MIRROR TELESCOPE
Place of Performance
Location: PASADENA, LOS ANGELES County, CALIFORNIA, 91125
Plain-Language Summary
National Aeronautics and Space Administration obligated $106.7 million to CALIFORNIA INSTITUTE OF TECHNOLOGY for work described as: ACTIVE MIRROR TELESCOPE Key points: 1. Contract awarded to a single research institution, indicating a specialized need or limited market. 2. Focus on research and development suggests innovation and scientific advancement as primary goals. 3. The cost-plus award fee structure incentivizes performance but can lead to cost overruns if not managed tightly. 4. Long duration of the contract (over 4 years) implies a complex, multi-stage project. 5. The absence of a small business set-aside suggests the scope or nature of the work is not conducive to smaller contractors. 6. Geographic concentration in California for this significant federal investment.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging due to its specialized R&D nature and the lack of direct comparable contracts. The cost-plus award fee (CPAF) pricing structure, while common for complex R&D, inherently carries higher risk for cost control compared to fixed-price contracts. Without detailed performance metrics and final cost data, a definitive value assessment is difficult, but the significant investment warrants close scrutiny of outcomes against initial objectives.
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 vendors. This typically occurs when a specific entity possesses unique capabilities, intellectual property, or is the only responsible source. While potentially efficient for highly specialized R&D, it bypasses the price discovery benefits of a competitive process, potentially leading to higher costs for the government.
Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from competitive bidding, which could have driven down costs. The government relies on negotiation and oversight to ensure fair pricing.
Public Impact
The primary beneficiary is the scientific community and the public, through advancements in astronomical observation and understanding. The contract supports the development and deployment of a sophisticated scientific instrument (Active Mirror Telescope). The geographic impact is concentrated in California, where the contractor is located and likely where much of the work is performed. Workforce implications include highly skilled scientists, engineers, and technicians involved in advanced research and development.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure on pricing.
- Cost-plus award fee contracts can incentivize spending if not rigorously overseen.
- Long contract duration increases exposure to potential scope creep and cost escalation.
- Lack of transparency inherent in sole-source R&D can obscure true value for money.
Positive Signals
- Award to a reputable institution (Caltech) suggests strong technical capability.
- Focus on R&D supports national scientific and technological advancement.
- The specific nature of the telescope likely addresses a unique scientific requirement.
Sector Analysis
This contract falls within the Research and Development (R&D) sector, specifically focusing on physical sciences and engineering. The market for highly specialized astronomical instrumentation is niche, often dominated by academic institutions or specialized aerospace contractors. NASA's spending in this area is critical for maintaining its scientific leadership and pursuing ambitious space exploration goals. Comparable spending benchmarks are difficult to establish due to the unique nature of such scientific instruments.
Small Business Impact
The contract was not competed and did not include a small business set-aside. The nature of developing advanced scientific instruments like telescopes typically requires specialized expertise and resources often found in larger institutions or established aerospace firms, making it less suitable for small business participation unless through subcontracting. There is no explicit indication of subcontracting plans for small businesses within the provided data.
Oversight & Accountability
Oversight for this contract would primarily fall under NASA's program management and contracting officers. As a Cost Plus Award Fee (CPAF) contract, performance incentives and cost controls are key areas of oversight. The agency's internal audit and Inspector General functions would be responsible for ensuring accountability and investigating any potential fraud, waste, or abuse. Transparency is generally limited for sole-source R&D contracts compared to competitively awarded ones.
Related Government Programs
- NASA Space Science Missions
- Advanced Telescope Development Programs
- Federal Research and Development Funding
- University Research Contracts
Risk Flags
- Sole-source award
- Cost-plus contract type
- Long contract duration
Tags
research-and-development, nasa, california, sole-source, cost-plus-award-fee, telescope, astronomy, large-contract, science, aerospace
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $106.7 million to CALIFORNIA INSTITUTE OF TECHNOLOGY. ACTIVE MIRROR TELESCOPE
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 $106.7 million.
What is the period of performance?
Start: 2003-09-30. End: 2007-09-24.
What specific scientific objectives does the Active Mirror Telescope aim to achieve, and how does this contract contribute to those goals?
The Active Mirror Telescope (AMT) project, funded under this contract, likely aims to advance astronomical observation capabilities by developing a novel telescope design. Active optics systems, which the 'Active Mirror' designation suggests, allow for real-time correction of optical aberrations caused by environmental factors or mirror imperfections. This technology can lead to sharper images and improved data quality for astronomical research. The contract's contribution is the design, fabrication, testing, and potentially deployment of this advanced instrument, enabling scientists to pursue research objectives such as studying distant galaxies, exoplanets, or cosmic phenomena with unprecedented clarity and detail. The specific scientific goals would be detailed in NASA's mission requirements and the contractor's technical proposals.
How does the Cost Plus Award Fee (CPAF) structure influence contractor behavior and cost management for this R&D project?
The Cost Plus Award Fee (CPAF) structure is designed for R&D or services where cost and performance outcomes are uncertain. It reimburses the contractor for allowable costs incurred plus a base fee (a percentage of estimated costs) and an additional award fee. This award fee is determined by the government based on subjective performance assessments against pre-defined criteria. This incentivizes the contractor to exceed minimum performance requirements to earn the maximum award fee. However, it also requires robust government oversight to define clear criteria and evaluate performance objectively. For cost management, CPAF provides less certainty than fixed-price contracts, as the final cost depends on incurred expenses and the awarded fee. Effective management requires diligent monitoring of costs and performance to ensure value for money.
What are the potential risks associated with a sole-source award for a complex R&D project like this telescope?
A sole-source award for a complex R&D project like the Active Mirror Telescope carries several risks. Primarily, the lack of competition means the government does not benefit from price discovery through bidding, potentially leading to a higher contract price than if multiple vendors had competed. There's also a risk of complacency from the contractor, as there is no immediate competitive threat. Furthermore, if the chosen contractor encounters unforeseen technical difficulties or cost overruns, the government has limited alternatives without significant delays and costs associated with re-soliciting. Ensuring fair pricing and robust performance monitoring becomes even more critical in sole-source situations.
Can we compare the per-unit cost or cost-effectiveness of this telescope development to other similar astronomical instruments funded by NASA or other agencies?
Direct per-unit cost comparisons for specialized R&D projects like the Active Mirror Telescope are difficult due to the unique nature of each instrument and its scientific objectives. Unlike mass-produced items, advanced scientific instruments are often one-of-a-kind or built in very small quantities. Factors such as technological innovation, specific scientific requirements (e.g., aperture size, wavelength sensitivity, resolution), and the chosen development approach (e.g., CPAF vs. fixed-price) significantly influence cost. While NASA likely benchmarks development costs against internal historical data and industry knowledge for similar complex projects, publicly available, directly comparable 'per-unit' cost data for such bespoke R&D endeavors is typically not disclosed or easily aggregated.
What is the track record of the California Institute of Technology (Caltech) in managing large-scale federal R&D contracts, particularly in aerospace and astronomy?
The California Institute of Technology (Caltech) has a long and distinguished track record in managing large-scale federal research and development contracts, particularly within the fields of aerospace and astronomy. As a leading research university, Caltech is deeply involved in numerous NASA and other federal agency projects, often operating major research facilities like the Jet Propulsion Laboratory (JPL) for NASA. Their history includes significant contributions to space exploration, telescope development, and fundamental scientific research. While specific contract performance details are proprietary, Caltech's consistent selection for and successful execution of complex, high-value R&D programs indicate a strong capability in project management, scientific execution, and financial stewardship necessary for such endeavors.
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: 1
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: $109,834,000
Exercised Options: $109,834,000
Current Obligation: $106,724,732
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: 2007-09-24
Potential End Date: 2007-09-24 00:00:00
Last Modified: 2020-01-27
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