NASA's $17M R&D contract with SAIC saw 2 bids, raising questions about value and competition
Contract Overview
Contract Amount: $16,985,807 ($17.0M)
Contractor: Science Applications International Corporation
Awarding Agency: National Aeronautics and Space Administration
Start Date: 2006-01-31
End Date: 2012-01-31
Contract Duration: 2,191 days
Daily Burn Rate: $7.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS AWARD FEE
Sector: R&D
Official Description: SOUNDER RESEARCH TEAM / DATA IMPACT AND MODELING TEAM SERVICES
Place of Performance
Location: GREENBELT, PRINCE GEORGES County, MARYLAND, 20771
State: Maryland Government Spending
Plain-Language Summary
National Aeronautics and Space Administration obligated $17.0 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: SOUNDER RESEARCH TEAM / DATA IMPACT AND MODELING TEAM SERVICES Key points: 1. The contract's duration of over 6 years suggests a long-term need for specialized R&D services. 2. The cost-plus award fee structure incentivizes performance but requires careful oversight to manage costs. 3. With only two bids received, the level of competition may have limited price discovery. 4. The contract's focus on physical, engineering, and life sciences R&D aligns with NASA's core mission. 5. The absence of small business set-asides means opportunities for smaller firms were not explicitly prioritized. 6. The contract's value, while significant, needs to be benchmarked against similar R&D efforts to assess value for money.
Value Assessment
Rating: fair
Benchmarking this $16.99 million contract against similar R&D services is challenging without more granular data on the specific research areas and deliverables. However, the cost-plus award fee (CPAF) structure, while common for complex R&D, can lead to higher costs if not managed tightly. The limited competition (2 bidders) also suggests potential for suboptimal pricing compared to a more robustly competed contract. Without specific performance metrics and cost breakdowns, a definitive value assessment is difficult, but the limited competition warrants a 'fair' rating.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. However, only two bids were received. This limited number of bidders suggests that either the market for these specific R&D services is concentrated, or the requirements were highly specialized, potentially deterring a broader range of competitors. The limited competition could impact price negotiation and potentially lead to higher costs for the government.
Taxpayer Impact: The limited number of bidders means taxpayers may not have benefited from the most competitive pricing achievable through a wider bidding process. This could translate to a higher overall cost for the research and development services procured.
Public Impact
The primary beneficiaries are NASA's research initiatives, advancing scientific and technological capabilities. The contract supports research and development in physical, engineering, and life sciences, contributing to scientific advancement. The geographic impact is likely concentrated around NASA facilities and the contractor's operational centers. The contract supports a specialized workforce in R&D, contributing to the scientific and engineering talent pool.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition may have resulted in higher costs for taxpayers.
- The cost-plus award fee structure requires robust oversight to prevent cost overruns.
- Lack of small business participation may limit broader economic impact.
Positive Signals
- Full and open competition was utilized, allowing for broad market access.
- The contract supports critical R&D for NASA's mission.
- The award fee structure incentivizes contractor performance.
Sector Analysis
This contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences. This sector is characterized by innovation, long development cycles, and often requires specialized expertise. NASA is a significant spender in this area, driving advancements that can have both scientific and commercial applications. Comparable spending benchmarks would involve analyzing other large-scale R&D contracts awarded by government agencies or major private sector entities in similar scientific fields.
Small Business Impact
This contract did not include specific small business set-asides, nor is there an indication of subcontracting requirements for small businesses. This means that opportunities for small businesses to participate in this specific contract were not explicitly prioritized through set-aside provisions. The impact on the small business ecosystem is neutral to potentially negative, as larger prime contractors may not be incentivized to subcontract with smaller firms unless it aligns with their own strategic sourcing or if specific subcontracting goals are mandated elsewhere.
Oversight & Accountability
Oversight for this Cost Plus Award Fee (CPAF) contract would typically involve rigorous monitoring of costs, performance against milestones, and adherence to research objectives by NASA contracting officers and technical representatives. The award fee mechanism itself serves as an incentive for the contractor to meet or exceed performance expectations. Transparency would be enhanced through regular reporting requirements from the contractor. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract.
Related Government Programs
- NASA Research and Development Contracts
- Science Applications International Corporation Contracts
- Cost Plus Award Fee Contracts
- Federal R&D Spending
Risk Flags
- Limited competition
- Cost-plus contract type
- Long contract duration
Tags
research-and-development, nasa, science-applications-international-corporation, definitive-contract, full-and-open-competition, cost-plus-award-fee, maryland, physical-engineering-life-sciences, large-contract
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $17.0 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. SOUNDER RESEARCH TEAM / DATA IMPACT AND MODELING TEAM SERVICES
Who is the contractor on this award?
The obligated recipient is SCIENCE APPLICATIONS INTERNATIONAL CORPORATION.
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 $17.0 million.
What is the period of performance?
Start: 2006-01-31. End: 2012-01-31.
What was the specific nature of the R&D performed under this contract?
The contract, awarded to Science Applications International Corporation (SAIC), focused on 'Research and Development in the Physical, Engineering, and Life Sciences' (NAICS code 541710). While the broad category is defined, the specific projects and deliverables would have been detailed in task orders issued under the definitive contract. These likely encompassed a range of scientific investigations, engineering solutions, and life science research pertinent to NASA's mission objectives, potentially including areas like aerospace engineering, materials science, space biology, or advanced propulsion systems. The exact scope would have evolved over the contract's duration from January 2006 to January 2012.
How does the $16.99 million value compare to similar NASA R&D contracts?
Comparing the $16.99 million value requires context regarding the specific R&D domain and contract duration. NASA awards numerous R&D contracts, varying significantly in value. For a contract spanning over six years (2006-2012), this value averages approximately $2.8 million per year. This figure is moderate within NASA's R&D portfolio, which includes much larger, multi-billion dollar programs. However, for specialized research in niche areas, this amount could represent a substantial investment. Benchmarking would necessitate identifying contracts with similar technical scopes and durations within NASA's historical spending data.
What are the key risks associated with a Cost Plus Award Fee (CPAF) contract structure?
The primary risk with CPAF contracts is the potential for cost escalation, as the contractor is reimbursed for allowable costs plus a fee that includes a base amount and an award amount tied to performance. While the award fee incentivizes good performance, it can also lead to contractors focusing on achieving subjective performance metrics rather than strict cost control. Effective oversight is crucial to ensure that costs are reasonable and allocable, and that the award fee criteria are objective and rigorously applied. Without strong government oversight, there's a risk of paying a premium for performance that might have been achieved at a lower cost.
What does the limited competition (2 bidders) imply for the effectiveness of the procurement process?
The fact that only two bids were received under a 'full and open competition' raises concerns about the effectiveness of the procurement process in stimulating robust competition. This could stem from several factors: the highly specialized nature of the R&D required, potentially limiting the number of qualified bidders; stringent pre-qualification requirements that screened out potential competitors; or perhaps the contract's structure or anticipated profitability did not attract a wider pool. Limited competition can lead to higher prices for the government, reduced innovation from a lack of competitive pressure, and potentially fewer choices for fulfilling the requirement. It suggests that the market may be concentrated or that the solicitation could be improved to attract more bidders.
What is the historical spending trend for SAIC with NASA in similar R&D categories?
Analyzing Science Applications International Corporation's (SAIC) historical spending with NASA in R&D requires access to detailed contract databases. SAIC is a large government contractor with a significant presence across various agencies, including NASA, often securing contracts in IT, engineering, and scientific support services. Without specific data on SAIC's past awards in the 541710 NAICS code (R&D in Physical, Engineering, and Life Sciences) with NASA, it's difficult to establish a trend. However, their consistent award of contracts suggests a strong existing relationship and capability that NASA values. Further analysis would involve examining contract vehicles, award values, and performance history over multiple fiscal years.
How does the contract's performance period (over 6 years) impact risk and value assessment?
A long performance period, such as the 2191 days (over 6 years) for this contract, introduces specific risks and considerations for value assessment. On the one hand, it provides stability and allows for the development of deep expertise and long-term research projects, which can be beneficial for complex R&D. However, it also increases the risk of cost growth over time due to inflation, changing technological landscapes, or unforeseen project challenges. For value assessment, it necessitates evaluating whether the long-term benefits and scientific advancements justify the sustained investment and potential cost fluctuations. Robust contract management and periodic reviews are essential to ensure continued value realization throughout the extended period.
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: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 2
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 1710 SAIC DR, MCLEAN, VA, 22102
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $19,000,000
Exercised Options: $19,000,000
Current Obligation: $16,985,807
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Timeline
Start Date: 2006-01-31
Current End Date: 2012-01-31
Potential End Date: 2012-01-31 00:00:00
Last Modified: 2018-09-12
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