DoD's $100.5M R&D contract with SIGMATECH INC sees incremental funding, extending to November 2025

Contract Overview

Contract Amount: $100,507,992 ($100.5M)

Contractor: Sigmatech Inc

Awarding Agency: Department of Defense

Start Date: 2020-01-16

End Date: 2025-11-15

Contract Duration: 2,130 days

Daily Burn Rate: $47.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: THE PURPOSE OF THIS MODIFICATION P00037 IS ADD INCREMENTAL FUNDING IN ACCORDANCE WITH FEDERAL ACQUISTION REGULATION (FAR) 52.232-22 " LIMITATION OF FUNDS."

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35805

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $100.5 million to SIGMATECH INC for work described as: THE PURPOSE OF THIS MODIFICATION P00037 IS ADD INCREMENTAL FUNDING IN ACCORDANCE WITH FEDERAL ACQUISTION REGULATION (FAR) 52.232-22 " LIMITATION OF FUNDS." Key points: 1. Contract value increased by $100.5M, indicating ongoing R&D investment. 2. The contract is a Delivery Order under a larger award, suggesting a phased approach to research. 3. SIGMATECH INC is the sole contractor, raising questions about competition and potential price efficiencies. 4. The contract spans over 5 years, from January 2020 to November 2025, indicating a long-term research objective. 5. Research and Development in Physical, Engineering, and Life Sciences (except Biotechnology) is the focus, a critical area for defense innovation. 6. The contract type is Cost Plus Fixed Fee, which can incentivize cost control but requires careful oversight. 7. The modification cites FAR 52.232-22 'Limitation of Funds,' suggesting a need for additional funding to continue work.

Value Assessment

Rating: fair

The total award amount of $100.5M for R&D services over approximately 5 years requires benchmarking against similar research contracts. Without specific deliverables or performance metrics, assessing value for money is challenging. The Cost Plus Fixed Fee structure necessitates close monitoring of costs to ensure they align with the fixed fee and the overall research objectives. The incremental funding suggests that the initial budget may have been insufficient or that the scope of work has expanded.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is a positive indicator for price discovery. However, the data provided indicates this is a Delivery Order (DO) with SIGMATECH INC, and the number of bidders for this specific DO is not detailed. If this DO was competed separately, the level of competition would be more transparent. If it's a sole-source DO under a previously competed IDIQ, the competition dynamics for this specific award might be limited.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to better pricing and innovative solutions. However, the specific competition for this delivery order needs further examination to confirm if it truly leveraged market forces effectively.

Public Impact

This contract supports advanced research and development in physical, engineering, and life sciences, potentially leading to technological advancements for the Department of Defense. The research is expected to benefit national security by enhancing defense capabilities. The contract is geographically located in Alabama, suggesting a concentration of R&D activities and potential workforce implications in that state. The specific impact on the broader scientific community or civilian applications is not detailed but could be significant depending on the research outcomes.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Incremental funding raises concerns about initial budget accuracy or scope creep.
Cost Plus Fixed Fee contracts require diligent oversight to prevent cost overruns.
Lack of detail on specific deliverables makes it hard to assess performance and value.
The sole contractor for this delivery order warrants scrutiny regarding competitive pricing.

Positive Signals

Awarded under full and open competition, suggesting a robust initial selection process.
Long-term contract duration indicates a sustained commitment to critical R&D.
Focus on advanced R&D aligns with strategic defense priorities.

Sector Analysis

The contract falls within the Research and Development sector, specifically NAICS code 541712, which covers R&D in physical, engineering, and life sciences (excluding biotechnology). This is a critical area for defense innovation, with significant government investment. Comparable spending benchmarks would involve analyzing other DoD R&D contracts in similar scientific domains and with similar contract types and durations.

Small Business Impact

The data indicates the contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside. However, the prime contractor, SIGMATECH INC, may engage small businesses as subcontractors, which would depend on their internal procurement practices and the nature of the R&D work.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and their representatives within the Department of the Army. The Cost Plus Fixed Fee structure necessitates rigorous financial oversight to ensure costs are reasonable and allocable to the contract. Transparency is enhanced through contract modifications and reporting requirements, but specific details on public access to research outcomes or detailed cost breakdowns are not provided.

Related Government Programs

Department of Defense Research and Development Programs
Army Science and Technology Investments
Advanced Materials Research Contracts
Engineering and Physical Sciences Research
Federal R&D Spending

Risk Flags

Potential for cost overruns due to CPFF contract type.
Lack of specific performance metrics makes objective assessment difficult.
Incremental funding suggests potential underestimation of initial costs or scope changes.
Limited visibility into the specific R&D activities and deliverables.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $100.5 million to SIGMATECH INC. THE PURPOSE OF THIS MODIFICATION P00037 IS ADD INCREMENTAL FUNDING IN ACCORDANCE WITH FEDERAL ACQUISTION REGULATION (FAR) 52.232-22 " LIMITATION OF FUNDS."

Who is the contractor on this award?

The obligated recipient is SIGMATECH INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $100.5 million.

What is the period of performance?

Start: 2020-01-16. End: 2025-11-15.

What is the specific nature of the research being conducted under this contract?

The contract's NAICS code (541712) indicates research and development in the physical, engineering, and life sciences, excluding biotechnology. While the broad category is defined, the specific research objectives, deliverables, and expected outcomes are not detailed in the provided data. This level of detail is crucial for understanding the contract's purpose, assessing its potential impact, and evaluating the value for money. Further inquiry into contract line item numbers (CLINs) or attached statements of work would be necessary to ascertain the precise research focus.

How does the $100.5M funding compare to typical R&D investments in this domain?

The $100.5M awarded over approximately five years for R&D in physical, engineering, and life sciences is a substantial investment. To benchmark this effectively, one would need to compare it against similar contracts awarded by the Department of Defense or other federal agencies for R&D in comparable scientific fields. Factors such as the novelty of the research, the stage of development (e.g., basic research vs. applied research), and the contractor's expertise would influence typical spending. Without more specific details on the research scope, a precise comparison is difficult, but it represents a significant allocation of resources.

What are the key performance indicators (KPIs) for this contract, and how is performance being measured?

The provided data does not explicitly list Key Performance Indicators (KPIs) or the methodology for performance measurement. For Cost Plus Fixed Fee contracts, performance is often tied to the achievement of specific research milestones, adherence to project timelines, and the effective management of costs within the agreed-upon fee structure. The contracting officer's representative (COR) would typically monitor progress against the statement of work and any defined technical objectives. The absence of explicit KPIs in the summary data makes it challenging to assess the contractor's performance objectively.

What is the track record of SIGMATECH INC in performing similar R&D contracts for the federal government?

Assessing SIGMATECH INC's track record would require examining their past performance on federal contracts, particularly those involving research and development in physical, engineering, and life sciences. This would involve reviewing contract databases for previous awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any history of contract disputes or terminations. A positive performance history on similar, complex R&D projects would increase confidence in their ability to execute this current contract successfully. Conversely, a history of underperformance or issues would raise concerns.

What are the potential risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this R&D effort?

The primary risk with a CPFF contract is that the contractor may have less incentive to control costs compared to fixed-price contracts, as costs are reimbursed. However, the 'fixed fee' portion provides a ceiling for the contractor's profit. The government bears the risk of cost overruns beyond the estimated cost, while the contractor risks not achieving the fixed fee if performance is subpar. Effective oversight is critical to ensure costs are reasonable, allocable, and allowable, and that the contractor is diligently pursuing the research objectives within the spirit of the agreement.

How does the incremental funding modification (P00037) impact the overall budget and timeline of the contract?

Modification P00037, citing FAR 52.232-22 'Limitation of Funds,' indicates that the government is adding incremental funding to the contract. This suggests that the previously allocated funds were nearing depletion or were insufficient to cover the anticipated costs through the contract's period of performance. This modification directly increases the total obligated amount and potentially extends the period of performance or allows for continued work within the existing timeline. It highlights the dynamic nature of R&D funding, where initial estimates may require adjustments based on research progress and evolving needs.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 7

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Sigmatech, Inc.

Address: 4901 CORPORATE DR NW STE C, HUNTSVILLE, AL, 35805

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $138,840,288

Exercised Options: $117,750,802

Current Obligation: $100,507,992

Actual Outlays: $483,949

Subaward Activity

Number of Subawards: 153

Total Subaward Amount: $21,496,410

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15P7T17D0133

IDV Type: IDC

Timeline