DoD's $48M NETFIRES R&D contract awarded sole-source to NETFIRES, LLC for 7 years

Contract Overview

Contract Amount: $48,169,498 ($48.2M)

Contractor: Netfires, LLC

Awarding Agency: Department of Defense

Start Date: 2004-07-02

End Date: 2011-09-30

Contract Duration: 2,646 days

Daily Burn Rate: $18.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Place of Performance

Location: GRAND PRAIRIE, TARRANT County, TEXAS, 75051, UNITED STATES OF AMERICA

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $48.2 million to NETFIRES, LLC for work described as: Key points: 1. Contract awarded on a sole-source basis, limiting potential cost savings from competition. 2. Research and Development focus suggests innovation but carries inherent performance risks. 3. Long duration of over 7 years indicates a sustained need for the services. 4. Cost Plus Fixed Fee contract type may incentivize cost overruns. 5. Awarded by the Department of the Army, indicating a specific defense-related need. 6. No small business set-aside, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and R&D focus. The Cost Plus Fixed Fee structure, while common for R&D, can lead to higher costs if not managed tightly. Without competitive bids, it's difficult to ascertain if the fixed fee represents a fair market value for the services rendered. The extended duration suggests a significant investment, but the lack of comparative data makes a definitive value assessment difficult.

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 approach is typically used when only one source is capable of meeting the requirement, often due to proprietary technology, unique expertise, or urgent needs. The absence of multiple bidders means that price discovery through competitive bidding was not utilized, potentially leading to a higher price than if multiple firms had competed.

Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competitive pressure to drive down costs. The government did not benefit from the potential efficiencies and innovations that competition often fosters.

Public Impact

The primary beneficiaries are the Department of Defense and potentially the warfighter, who will receive advanced research and development outputs. Services delivered include research and development in physical, engineering, and life sciences, likely related to defense technologies. The geographic impact is primarily within Texas, where the contractor is located. Workforce implications include employment for specialized researchers and engineers at NETFIRES, LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential value.
Cost Plus Fixed Fee contract type can lead to cost overruns.
Long contract duration increases exposure to potential performance issues over time.
Lack of transparency in the sole-source justification could hide inefficiencies.

Positive Signals

Contract addresses a specific R&D need for the Department of Defense.
NETFIRES, LLC is the sole provider, suggesting specialized capabilities.
The contract has a defined period of performance, allowing for reassessment.

Sector Analysis

This contract falls within the Research and Development sector, specifically under NAICS code 541710. This sector is characterized by innovation and the pursuit of new knowledge and applications. The Department of Defense is a major investor in R&D, often seeking advancements in areas like aerospace, materials science, and information technology. Comparable spending benchmarks in this specific R&D niche are difficult to establish due to the specialized nature of defense research.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This means that opportunities for small businesses to participate in this specific contract are likely limited unless they are direct suppliers or partners to the prime contractor. The overall impact on the small business ecosystem for this particular award is minimal.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Department of the Army. Accountability measures would be tied to the performance metrics outlined in the Cost Plus Fixed Fee agreement. Transparency is limited due to the sole-source nature of the award, making public scrutiny of the procurement process and pricing more challenging. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Research and Development Programs
Army Contracting Command
Advanced Technology Development Contracts
Cost Plus Fixed Fee Contracts

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Long contract duration
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.2 million to NETFIRES, LLC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is NETFIRES, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $48.2 million.

What is the period of performance?

Start: 2004-07-02. End: 2011-09-30.

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

The provided data indicates the contract falls under NAICS code 541710, 'Research and Development in the Physical, Engineering, and Life Sciences.' While the specific project details are not included, this suggests the work involves scientific inquiry and experimentation to create new knowledge or applications in these broad fields. Given the Department of the Army as the awarding agency, the R&D likely pertains to defense technologies, potentially including areas like advanced materials, sensor technology, communication systems, or weapon system enhancements. Further details would require access to the contract's statement of work or related documentation.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other R&D contract types in terms of cost efficiency?

The Cost Plus Fixed Fee (CPFF) contract type is common for research and development where the scope of work is not precisely defined at the outset, making it difficult to establish a firm fixed price. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. While it allows for flexibility in R&D, it can incentivize cost overruns as the contractor is guaranteed cost recovery and a fixed profit regardless of the final cost. Other R&D contract types, like Fixed Price Incentive (FPI) or Cost Plus Incentive Fee (CPIF), aim to better align contractor incentives with cost control. However, CPFF can be effective when the government needs to encourage innovation without stifling creativity through rigid cost constraints, provided robust oversight is in place.

What are the potential risks associated with a sole-source award for a long-duration R&D contract?

A sole-source award for a long-duration R&D contract carries several risks. Firstly, the absence of competition means the government may not achieve the best possible price, as there's no market pressure to reduce costs. Secondly, it can lead to complacency from the contractor, as they face no threat of losing the contract to a competitor. For R&D, this could mean slower innovation or less rigorous problem-solving. Thirdly, the long duration (over 7 years in this case) increases the risk of the technology becoming obsolete or the contractor's capabilities becoming misaligned with evolving government needs. Finally, sole-source awards can raise concerns about fairness and transparency in the procurement process.

What is the historical spending pattern for similar R&D contracts awarded by the Department of the Army?

Analyzing historical spending patterns for similar R&D contracts by the Department of the Army requires access to extensive contract databases. However, it is generally known that the Army invests billions annually in R&D across various domains, including but not limited to, advanced materials, C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance), soldier systems, and aviation technologies. Contracts can range from small, targeted research efforts to large, multi-year development programs. The average value and duration can vary significantly based on the specific technological area and the maturity of the research. Sole-source awards, while less common than competed contracts, are utilized for highly specialized or unique requirements.

How does the contractor's track record influence the assessment of this contract's risk?

The provided data does not include information on NETFIRES, LLC's track record. A contractor's past performance is a critical factor in assessing the risk of a new contract. A history of successful project completion, on-time delivery, adherence to budget, and positive client feedback would indicate lower risk. Conversely, a track record of cost overruns, missed deadlines, poor quality, or unresolved disputes would signal higher risk. Without this information, the assessment of risk for this specific contract relies more heavily on the contract type, competition level, and inherent uncertainties of R&D.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 2400 W MARSHALL DR, GRAND PRAIRIE, TX, 75051

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline