DoD's $12.7M R&D contract with 3TEX, INC. awarded in 2006, set to expire in 2060

Contract Overview

Contract Amount: $12,697,528 ($12.7M)

Contractor: 3TEX, Inc.

Awarding Agency: Department of Defense

Start Date: 2006-09-03

End Date: 2060-12-25

Contract Duration: 19,837 days

Daily Burn Rate: $640/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: R&D

Place of Performance

Location: CARY, WAKE County, NORTH CAROLINA, 27511

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $12.7 million to 3TEX, INC. for work described as: R&D Key points: 1. Contract awarded for R&D services, indicating a focus on innovation and future capabilities. 2. Long contract duration of nearly 20 years suggests a sustained need for the services provided. 3. Awarded as 'NOT COMPETED', raising questions about the procurement process and potential for better pricing. 4. The contract's value is spread over a significant period, requiring careful monitoring of annual spending. 5. Contractor 3TEX, INC. has secured a substantial long-term agreement with the Department of Defense. 6. The North Carolina location of the contractor may have implications for regional economic impact.

Value Assessment

Rating: questionable

Given the 'NOT COMPETED' status and the extremely long duration extending to 2060, a thorough value assessment is challenging without more data. The total award value of $12.7 million spread over nearly two decades suggests a relatively low annual spend, but the lack of competition prevents benchmarking against market rates or alternative providers. It's crucial to understand why this contract was not competed and if the pricing structure remains appropriate over such an extended period. Without comparative data or a competitive bidding process, it's difficult to definitively assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a sole-source justification, meaning it was not openly competed. The Department of Defense likely determined that only 3TEX, INC. could provide the required research and development services, possibly due to proprietary technology, unique expertise, or specific national security requirements. The absence of multiple bidders means there was no direct price negotiation driven by market competition, which could potentially lead to higher costs for the government compared to a competed contract.

Taxpayer Impact: The lack of competition means taxpayers may not have benefited from the cost savings typically achieved through a competitive bidding process. This could result in a less efficient use of public funds if alternative, more cost-effective solutions were available but not explored.

Public Impact

The primary beneficiaries are likely the Department of Defense and potentially the U.S. military, receiving advanced research and development outputs. The services delivered are focused on physical, engineering, and life sciences research, contributing to technological advancement. The geographic impact is primarily centered around the contractor's location in North Carolina, potentially creating local jobs and economic activity. Workforce implications may include specialized R&D roles within 3TEX, INC., contributing to the high-skilled labor market in North Carolina.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and suboptimal resource allocation.
The extremely long contract duration (ending 2060) poses risks related to evolving technological needs and contractor performance over time.
The 'NOT COMPETED' status requires scrutiny to ensure it was fully justified and that no viable alternatives were overlooked.

Positive Signals

The contract supports critical R&D efforts for the Department of Defense, potentially leading to significant technological advancements.
A long-term commitment suggests a stable and predictable environment for the contractor to conduct specialized research.
The specific R&D focus (541710) indicates investment in areas deemed important for national security or technological superiority.

Sector Analysis

The contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences. This is a critical area for defense spending, as it drives innovation and maintains technological superiority. The market for specialized R&D services is often characterized by high barriers to entry due to intellectual property, specialized knowledge, and security clearances. Comparable spending benchmarks are difficult to establish without knowing the specific R&D area, but defense R&D is a multi-billion dollar segment of the federal budget.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. There is also no specific information provided regarding subcontracting plans or their impact on the small business ecosystem. Without explicit set-aside requirements or reporting on subcontracting, the direct benefit to small businesses from this particular award is likely minimal, unless 3TEX, INC. voluntarily engages small businesses in its R&D efforts.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Defense, specifically the contracting officers and program managers responsible for the R&D effort. Transparency is limited due to the sole-source nature and the long duration, making ongoing performance and cost reviews crucial. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected. The extended timeline necessitates robust performance monitoring and milestone reviews to ensure accountability.

Related Government Programs

Department of Defense Research and Development
Defense Advanced Research Projects Agency (DARPA) Contracts
Army Research Laboratory Contracts
Science and Technology Contracts
Cost Plus Fixed Fee Contracts

Risk Flags

Long contract duration
Sole-source award
Lack of competition
Potential for cost overruns (CPFF)
Risk of technological obsolescence

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.7 million to 3TEX, INC.. R&D

Who is the contractor on this award?

The obligated recipient is 3TEX, 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 $12.7 million.

What is the period of performance?

Start: 2006-09-03. End: 2060-12-25.

What specific research and development activities are covered under this contract, and how do they align with current Department of Defense priorities?

The contract specifies "Research and Development in the Physical, Engineering, and Life Sciences" (NAICS code 541710). While the exact nature of the R&D is not detailed in the provided data, it falls under a broad category crucial for defense modernization. This could encompass areas like advanced materials, new sensor technologies, biotechnologies for soldier enhancement, or novel engineering solutions for military platforms. To assess alignment with current DoD priorities, one would need to cross-reference the contractor's specific technical focus with the DoD's strategic R&D investment areas, such as those outlined in the National Defense Strategy or specific service branch modernization goals. Without further details on 3TEX, INC.'s specific research projects, a precise alignment assessment is not possible.

How does the Cost Plus Fixed Fee (CPFF) contract type typically perform in R&D settings compared to other contract types, and what are the associated risks?

Cost Plus Fixed Fee (CPFF) contracts are common in R&D where the scope of work is not well-defined or is expected to evolve. The government agrees to pay the contractor's allowable costs plus a fixed fee representing profit. This structure incentivizes the contractor to control costs, as the fee remains constant regardless of the final cost. However, it carries risks for the government, including potential cost overruns if the initial estimates are inaccurate and the contractor may have less incentive to control costs aggressively compared to fixed-price contracts. For R&D, CPFF can be advantageous when innovation and exploration are paramount, allowing flexibility. The key is robust government oversight to manage costs and ensure the work remains aligned with objectives.

Given the contract's award date in 2006 and its projected end date in 2060, what are the potential risks associated with such a long-term sole-source R&D agreement?

A contract spanning nearly 54 years presents significant risks. Firstly, technological obsolescence is a major concern; research priorities and the technological landscape can change dramatically over decades, potentially rendering the contracted R&D irrelevant or outdated. Secondly, contractor performance can degrade over such a long period, and monitoring quality and relevance becomes increasingly challenging. Thirdly, the lack of competition means the government is locked into a single provider, potentially missing out on innovations or cost efficiencies from other firms. Finally, economic and geopolitical shifts could alter the necessity or feasibility of the R&D. Robust annual reviews, clear exit strategies, and mechanisms for re-competition or modification are essential to mitigate these long-term risks.

What is the typical annual spending pattern for contracts of this nature and duration, and how does the $12.7 million total award compare?

The total award of $12.7 million over a period of approximately 19.8 years (from 2006 to 2025, assuming the end date is the actual performance period) suggests an average annual spending of roughly $641,000 ($12.7M / 19.8 years). This is a moderate annual spend for a Department of Defense R&D contract. Contracts of this nature, especially those involving specialized research, can vary widely in annual expenditure. Some might have consistent funding, while others might see fluctuating spending based on project milestones or research phases. Without knowing the specific R&D focus and the contractor's operational scale, it's difficult to definitively benchmark this spending. However, it doesn't appear exceptionally high or low on an annualized basis for a long-term R&D effort.

What does the 'NC' status for 'st' (State) and 'sn' (State Name) imply in the context of this contract?

The 'NC' status for 'st' and 'sn' indicates that the contractor, 3TEX, INC., is located in North Carolina. This is a standard data point used to identify the state where the contractor is based. In the context of this contract, it means that North Carolina is the primary state benefiting from the direct economic impact of this award, such as job creation and business activity related to the R&D services performed by 3TEX, INC. It also helps in understanding the geographic distribution of federal contract spending.

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

Solicitation ID: W56HZV06R0552

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 109 MACKENAN DR, CARY, NC, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $12,697,528

Exercised Options: $12,697,528

Current Obligation: $12,697,528

Timeline