DoD awards $26.4M cost-plus contract to Georgia Tech for R&D support, raising value-for-money questions

Contract Overview

Contract Amount: $26,355,033 ($26.4M)

Contractor: Georgia Tech Applied Research Corp

Awarding Agency: Department of Defense

Start Date: 2021-03-12

End Date: 2024-03-14

Contract Duration: 1,098 days

Daily Burn Rate: $24.0K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: THE PERFORMANCE WORK STATEMENT FOR THIS ACTION IS ENTITLED, "PEO DIGITAL/PEO MLB GEORGIA TECH RESEARCH INSTITUTE (GRTI) SUPPORT."

Place of Performance

Location: ATLANTA, FULTON County, GEORGIA, 30318

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $26.4 million to GEORGIA TECH APPLIED RESEARCH CORP for work described as: THE PERFORMANCE WORK STATEMENT FOR THIS ACTION IS ENTITLED, "PEO DIGITAL/PEO MLB GEORGIA TECH RESEARCH INSTITUTE (GRTI) SUPPORT." Key points: 1. Contract awarded on a sole-source basis, limiting competitive price discovery. 2. Cost-plus contract type may incentivize higher spending without strict cost controls. 3. Performance work statement focuses on research and development, a sector with inherent uncertainty. 4. Contract duration of nearly three years suggests a significant, ongoing need for services. 5. The awardee, Georgia Tech Applied Research Corp, is a non-profit research institute, potentially impacting profit motive considerations. 6. The specific NAICS code (541715) indicates a focus on physical, engineering, and life sciences R&D.

Value Assessment

Rating: questionable

The contract's cost-plus fixed fee structure, combined with a sole-source award, raises concerns about achieving optimal value for money. Without competitive bidding, it is difficult to benchmark pricing against market rates. The total award of $26.4 million over approximately three years necessitates close scrutiny of incurred costs and the efficiency of the research and development services provided. Comparisons to similar R&D support contracts are challenging due to the specialized nature of the work and the unique awardee.

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. This limits the number of potential bidders and the opportunity for market forces to drive down prices. While sole-source awards can be justified in specific circumstances, such as when only one entity possesses the required expertise, the lack of competition here means taxpayers may not be receiving the most cost-effective solution.

Taxpayer Impact: The absence of competition means taxpayers are potentially paying a premium, as there was no pressure from competing bids to ensure the lowest possible price for the research and development services.

Public Impact

The primary beneficiaries are the Department of Defense (specifically PEO Digital/PEO MLB) and potentially the advancement of physical, engineering, and life sciences research. Services delivered include research and development support, as outlined in the performance work statement. The geographic impact is primarily associated with the awardee's location in Georgia, though the research outcomes could have broader national implications. Workforce implications may include employment opportunities at Georgia Tech Applied Research Corp and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Cost-plus contract type can lead to cost overruns if not managed tightly.
Lack of detailed performance metrics in the provided data makes assessing efficiency difficult.
The broad R&D scope may present challenges in defining and measuring success.

Positive Signals

Awardee is a reputable research institution (Georgia Tech Applied Research Corp).
Contract supports critical Department of Defense research and development needs.
Fixed fee component provides some level of cost predictability.
Contract duration allows for sustained effort on complex R&D challenges.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. This sector is characterized by innovation, long development cycles, and often requires specialized expertise. The market size for R&D services for the federal government is substantial, with significant investment directed towards defense and technology advancement. This contract represents a portion of that investment, supporting specific technological development goals for the Department of the Army.

Small Business Impact

The provided data indicates that small business participation was not a stated requirement or focus for this contract (ss: false, sb: false). Therefore, there are no direct set-aside provisions for small businesses. The impact on the small business ecosystem is likely minimal unless Georgia Tech Applied Research Corp actively engages small businesses as subcontractors for specialized support, which is not detailed in the provided information.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the Department of the Army's contracting officers and program managers responsible for monitoring performance, costs, and adherence to the contract terms. Transparency is facilitated through contract databases like FPDS, but detailed operational oversight is internal to the agency. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Research and Development Contracts
Army Research Laboratory Contracts
PEO Digital Support Contracts
PEO MLB Support Contracts
University Research Partnerships with Government

Risk Flags

Sole-source award
Cost-plus contract type
Potential for cost overruns
Limited transparency on performance metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.4 million to GEORGIA TECH APPLIED RESEARCH CORP. THE PERFORMANCE WORK STATEMENT FOR THIS ACTION IS ENTITLED, "PEO DIGITAL/PEO MLB GEORGIA TECH RESEARCH INSTITUTE (GRTI) SUPPORT."

Who is the contractor on this award?

The obligated recipient is GEORGIA TECH APPLIED RESEARCH CORP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $26.4 million.

What is the period of performance?

Start: 2021-03-12. End: 2024-03-14.

What is the track record of Georgia Tech Applied Research Corp in performing similar R&D contracts for the Department of Defense?

Georgia Tech Applied Research Corp (GTARC) has a long-standing history of performing research and development for various government agencies, including the Department of Defense. As a component of the Georgia Institute of Technology, GTARC leverages extensive academic and research infrastructure. While specific performance metrics for this particular contract are not detailed in the provided data, GTARC's general reputation is that of a capable research institution. However, a deeper dive into past performance reviews, past performance questionnaires, and any documented issues on previous DoD contracts would be necessary for a comprehensive assessment of their track record on similar R&D efforts.

How does the $26.4 million contract value compare to similar R&D support contracts awarded by the Department of the Army?

Benchmarking the $26.4 million contract value requires comparing it to similar Research and Development (R&D) support contracts awarded by the Department of the Army, particularly those under NAICS code 541715 (Research and Development in the Physical, Engineering, and Life Sciences). Given the sole-source nature and cost-plus fixed fee structure, direct comparisons are challenging. However, looking at publicly available data for competed R&D contracts of similar scope and duration could provide a range. Contracts for specialized R&D support can vary widely in cost depending on the complexity, duration, and specific scientific or engineering disciplines involved. Without more specific details on the PWS and the competitive landscape, it's difficult to definitively state if $26.4 million is high or low, but the lack of competition suggests potential for higher costs than a competed award.

What are the primary risks associated with a sole-source, cost-plus fixed fee contract for R&D services?

The primary risks associated with a sole-source, cost-plus fixed fee (CPFF) contract for R&D services are twofold. Firstly, the sole-source nature eliminates competitive pressure, which can lead to higher prices than might be achieved in a competitive bidding process. There's less incentive for the contractor to be highly cost-efficient if they are guaranteed the work regardless of price. Secondly, the CPFF structure, while providing some cost certainty through the fixed fee, still allows the contractor to recover all allowable costs. This can create a moral hazard where the contractor may not be as diligent in controlling costs as they would be under a firm-fixed-price contract, potentially leading to cost overruns if not rigorously monitored by the government. For R&D, where outcomes can be uncertain, this structure is often used but requires robust oversight.

How effective is the Georgia Tech Research Institute in delivering the specified R&D support based on historical performance?

Assessing the effectiveness of Georgia Tech Applied Research Corp (GTARC) in delivering the specified R&D support requires access to detailed performance evaluations and historical data beyond the basic contract award information. GTARC, as part of Georgia Tech, is generally recognized for its research capabilities. However, effectiveness is context-dependent. For this specific contract, effectiveness would be measured against the objectives outlined in the Performance Work Statement (PWS) for PEO Digital/PEO MLB support. Without access to contractor performance assessment reports (CPARs), quality assurance reviews, or specific program outcome data, a definitive judgment on effectiveness cannot be made. The long duration (nearly three years) suggests a sustained need, but not necessarily a measure of success.

What are the historical spending patterns for R&D support services within the Department of the Army, and how does this contract fit?

The Department of the Army consistently allocates significant funding towards Research and Development (R&D) services across various scientific and engineering disciplines. Historical spending patterns show a substantial and ongoing investment in areas like advanced materials, C4ISR systems, simulation and training, and soldier modernization. This $26.4 million contract for PEO Digital/PEO MLB support, under NAICS code 541715, fits within the broader category of engineering and physical sciences R&D. It likely supports specific digital or mission systems development initiatives. While this single contract amount may seem large, it represents a fraction of the Army's total annual R&D budget, which can run into billions of dollars, reflecting the continuous need for technological advancement.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › General Science and Technology R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 505 10TH ST, ATLANTA, GA, 30318

Business Categories: Category Business, Corporate Entity Tax Exempt, Educational Institution, Higher Education, Nonprofit Organization, Not Designated a Small Business, Higher Education (Public)

Financial Breakdown

Contract Ceiling: $28,620,174

Exercised Options: $26,355,033

Current Obligation: $26,355,033

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $13,659,347

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W31P4Q18D0002

IDV Type: IDC

Timeline