DoD's $26.8M R&D contract with General Atomics shows strong competition and fair pricing
Contract Overview
Contract Amount: $26,798,299 ($26.8M)
Contractor: General Atomics
Awarding Agency: Department of Defense
Start Date: 2004-02-05
End Date: 2008-06-30
Contract Duration: 1,607 days
Daily Burn Rate: $16.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: COST PLUS INCENTIVE
Sector: R&D
Place of Performance
Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064
Plain-Language Summary
Department of Defense obligated $26.8 million to GENERAL ATOMICS for work described as: Key points: 1. The contract demonstrates a commitment to competitive sourcing for advanced research and development. 2. Pricing appears reasonable given the specialized nature of the research and development services. 3. The contractor, General Atomics, has a significant track record in defense contracting. 4. This contract falls within the broader category of physical, engineering, and life sciences R&D. 5. The duration of the contract suggests a substantial research effort. 6. The use of a cost-plus incentive fee contract type indicates a focus on performance and cost control.
Value Assessment
Rating: good
The contract's value of approximately $26.8 million over its period of performance appears reasonable for specialized R&D services. Benchmarking against similar contracts in the physical, engineering, and life sciences R&D sector would provide further context, but the competitive nature of the award suggests a fair market price was likely achieved. The cost-plus incentive fee structure incentivizes the contractor to manage costs effectively while meeting performance objectives.
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 offers. The presence of four bidders suggests a healthy level of competition for this R&D requirement. This competitive environment is generally beneficial for price discovery and ensures that the government receives proposals from multiple qualified entities.
Taxpayer Impact: Taxpayers benefit from full and open competition as it typically drives down prices and encourages innovation, leading to better value for public funds.
Public Impact
This contract supports advancements in physical, engineering, and life sciences, potentially leading to new technologies and capabilities for the Department of Defense. The primary beneficiaries are the Department of Defense and potentially the broader scientific and technological community through knowledge dissemination. The contract's geographic impact is centered in California, where General Atomics is located, likely supporting local high-tech employment. Workforce implications include specialized roles for scientists, engineers, and technicians involved in advanced research and development.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns inherent in cost-plus contract types if not rigorously managed.
- The specialized nature of R&D can make performance metrics difficult to define and measure objectively.
- Reliance on a single contractor for specific R&D outcomes can create program dependency.
Positive Signals
- Awarded through full and open competition, indicating a robust bidding process.
- The use of an incentive fee structure aligns contractor performance with government objectives.
- General Atomics is an established contractor with significant experience in defense-related R&D.
- The contract duration suggests a well-defined and substantial research scope.
Sector Analysis
This contract falls within the Research and Development in the Physical, Engineering, and Life Sciences sector, a critical area for technological advancement in defense. The market for such specialized R&D is often characterized by a few highly capable firms. Comparable spending benchmarks would typically be found within DoD's R&D budget allocations for similar scientific endeavors, often measured in the tens to hundreds of millions of dollars for complex projects.
Small Business Impact
This contract does not appear to have a small business set-aside. Analysis of subcontracting opportunities for small businesses would require further investigation into the contractor's subcontracting plan, if applicable. Without specific set-aside provisions, the direct impact on the small business ecosystem may be limited unless General Atomics actively engages small businesses as subcontractors.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and their representatives within the Department of the Army. Accountability measures are embedded in the cost-plus incentive fee structure, which links contractor payment to performance and cost targets. Transparency is facilitated through contract award databases, though detailed R&D progress reports are often considered sensitive.
Related Government Programs
- Department of Defense Research and Development Programs
- Advanced Technology Development Contracts
- Engineering and Scientific Services Contracts
- Cost-Plus Incentive Fee Contracts
Risk Flags
- Cost Overrun Risk
- Performance Uncertainty
- Incentive Structure Effectiveness
Tags
department-of-defense, department-of-the-army, research-and-development, general-atomics, cost-plus-incentive-fee, full-and-open-competition, california, large-contract, naics-541710, defense-sector
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $26.8 million to GENERAL ATOMICS. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is GENERAL ATOMICS.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $26.8 million.
What is the period of performance?
Start: 2004-02-05. End: 2008-06-30.
What is General Atomics' track record with cost-plus incentive fee contracts, particularly within the Department of Defense?
General Atomics has a substantial history of performing on Department of Defense contracts, including those utilizing cost-plus incentive fee (CPIF) structures. CPIF contracts are common for R&D and complex system development where final costs and performance are not fully predictable at the outset. This contract type incentivizes the contractor to control costs and meet performance targets by adjusting the fee based on achieved outcomes. While specific details on past CPIF performance metrics for General Atomics would require deeper analysis of historical contract data, their continued success in securing such awards suggests a generally positive track record in managing these complex agreements and delivering on objectives within the DoD.
How does the $26.8 million value compare to similar R&D contracts in physical, engineering, and life sciences?
The $26.8 million value for this R&D contract is within a common range for specialized research projects within the physical, engineering, and life sciences sector, particularly for a duration of approximately 4.5 years (1607 days). Larger, more complex R&D initiatives within the DoD can easily reach hundreds of millions or even billions of dollars. Conversely, smaller, more focused research tasks might be awarded for sums under $1 million. This contract's value suggests a significant but not exceptionally large-scale research effort, likely focused on developing specific technologies or scientific understanding relevant to defense applications. Benchmarking against contracts with similar North American Industry Classification System (NAICS) codes (like 541710) and similar agencies would provide more precise comparisons.
What are the primary risks associated with this specific Cost Plus Incentive Fee (CPIF) contract?
The primary risks associated with this CPIF contract revolve around the inherent uncertainties of research and development. Cost overruns are a significant risk, as the final cost is not fixed and depends on the contractor's efficiency and the project's technical challenges. If the incentive targets are poorly defined or unattainable, the contract may not effectively motivate the desired performance or cost savings. There's also a risk that the research outcomes may not meet the government's expectations or prove technically feasible, despite the contractor's best efforts. Effective oversight by the government is crucial to mitigate these risks by closely monitoring progress, costs, and adherence to the incentive structure.
How effective is the 'full and open competition' approach for R&D contracts of this nature?
Full and open competition is generally considered the most effective approach for R&D contracts when feasible, as it maximizes the pool of potential offerors, encourages innovation, and promotes competitive pricing. For R&D, this means the government can solicit proposals from a wide range of companies, research institutions, and universities, potentially uncovering novel solutions or more cost-effective approaches. The presence of four bidders in this case indicates that the requirement was attractive enough to elicit significant interest. However, the complexity and specialized nature of some R&D can sometimes limit the number of truly capable competitors, making 'full and open' less practical or leading to awards to a few established players.
What historical spending patterns exist for R&D contracts awarded to General Atomics by the Department of Defense?
General Atomics has been a significant recipient of Department of Defense contracts over many years, with a substantial portion allocated to research, development, testing, and evaluation (RDT&E). Their spending history with the DoD often includes work on advanced technologies, particularly in areas like unmanned aerial systems, propulsion, and advanced materials. Analyzing their historical spending patterns would reveal a trend of securing large, complex R&D contracts, often through competitive processes, reflecting their established position as a key defense contractor. Specific dollar amounts and trends would require access to detailed historical contract databases, but their consistent presence indicates a strong, ongoing relationship with the DoD for R&D requirements.
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 › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: BASIC RESEARCH
Offers Received: 4
Pricing Type: COST PLUS INCENTIVE (V)
Evaluated Preference: NONE
Contractor Details
Address: 3550 GENERAL ATOMICS COURT, SAN DIEGO, CA, 90
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2004-02-05
Current End Date: 2008-06-30
Potential End Date: 2017-05-26 00:00:00
Last Modified: 2014-09-25
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