DoD's $34M contract for plasma focus neutron effects system awarded to Verus Research, LLC

Contract Overview

Contract Amount: $34,057,932 ($34.1M)

Contractor: Verus Research, LLC

Awarding Agency: Department of Defense

Start Date: 2022-08-29

End Date: 2027-05-30

Contract Duration: 1,735 days

Daily Burn Rate: $19.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: DEUTERIUM-TRITIUM DENSE PLASMA FOCUS NEUTRON EFFECTS SYSTEM FOR TEST

Place of Performance

Location: WHITE SANDS MISSILE RANGE, DONA ANA County, NEW MEXICO, 88002

State: New Mexico Government Spending

Plain-Language Summary

Department of Defense obligated $34.1 million to VERUS RESEARCH, LLC for work described as: DEUTERIUM-TRITIUM DENSE PLASMA FOCUS NEUTRON EFFECTS SYSTEM FOR TEST Key points: 1. Contract value of $34 million over approximately five years. 2. Awarded to Verus Research, LLC, a single entity. 3. The contract is for a 'DEUTERIUM-TRITIUM DENSE PLASMA FOCUS NEUTRON EFFECTS SYSTEM'. 4. The contract type is Cost Plus Fixed Fee, indicating potential for cost overruns. 5. The period of performance spans from August 2022 to May 2027. 6. The contract was awarded under full and open competition. 7. The system is intended for testing purposes related to neutron effects.

Value Assessment

Rating: fair

The contract value of $34 million for a specialized testing system appears to be within a reasonable range for complex defense research and development. However, without specific benchmarks for similar plasma focus neutron effects systems, a precise value-for-money assessment is challenging. The Cost Plus Fixed Fee (CPFF) contract type introduces some risk, as actual costs could exceed initial estimates, though the fixed fee component provides some cost control for the contractor. Further analysis would require comparing this to other government or commercial contracts for similar advanced testing equipment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' suggesting that multiple bidders had the opportunity to submit proposals. The specific number of bidders is not provided, which limits a detailed assessment of the competitive landscape. However, the designation implies a robust bidding process that should theoretically lead to competitive pricing and selection of the best-value offer.

Taxpayer Impact: A full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and encourage innovation, leading to better value for public funds.

Public Impact

This contract supports the Department of Defense's research and development efforts, specifically in understanding neutron effects on materials and systems. The primary beneficiaries are likely defense research institutions and personnel who will utilize the plasma focus neutron effects system for testing and analysis. The system's development and deployment will contribute to advancing the military's technological capabilities and ensuring the resilience of its assets. The contract is geographically located in New Mexico, potentially creating or sustaining high-skilled jobs in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to costs exceeding initial estimates.
Lack of specific bidder count in competition details limits assessment of price discovery.
Specialized nature of the system may limit the pool of qualified contractors, potentially impacting future competition.
The 'Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing' NAICS code is broad and may not fully capture the specialized R&D nature of this contract.

Positive Signals

Awarded under 'full and open competition,' indicating a broad outreach for potential bidders.
The contract duration of nearly five years allows for sustained development and testing.
The system addresses a critical need for understanding neutron effects in defense applications.
Verus Research, LLC is the sole awardee, suggesting they were deemed the most capable or best value.

Sector Analysis

This contract falls within the broader defense sector, specifically focusing on advanced materials testing and research related to nuclear effects. The market for such specialized equipment is niche, likely dominated by a few highly technical firms. The spending of $34 million is significant for a single system but should be benchmarked against the overall R&D budget for defense materials science and testing infrastructure. Comparable spending might include other advanced simulation or testing facilities for extreme environments.

Small Business Impact

The data indicates that small business participation (sb) is false and there is no small business set-aside (ss) for this contract. This suggests the contract was not specifically targeted towards small businesses. There is no information provided on subcontracting plans, so the impact on the small business ecosystem is currently unknown but likely minimal for this specific prime contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. As a Cost Plus Fixed Fee contract, there will be a need for diligent financial oversight to monitor costs and ensure they align with the fixed fee. Transparency is generally maintained through contract reporting mechanisms, and while specific Inspector General (IG) jurisdiction isn't detailed, the DoD IG would have oversight authority over potential fraud, waste, or abuse.

Related Government Programs

Defense Research and Development
Materials Science Research
Nuclear Effects Testing
Guided Missile and Space Vehicle Components
Advanced Simulation and Testing Equipment

Risk Flags

Cost Plus Fixed Fee contract type carries inherent cost overrun risk.
Limited information on the number of bidders in the competition.
Specialized nature of the technology may limit future competition.
Sole awardee concentrates risk and reliance on one contractor.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.1 million to VERUS RESEARCH, LLC. DEUTERIUM-TRITIUM DENSE PLASMA FOCUS NEUTRON EFFECTS SYSTEM FOR TEST

Who is the contractor on this award?

The obligated recipient is VERUS RESEARCH, 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 $34.1 million.

What is the period of performance?

Start: 2022-08-29. End: 2027-05-30.

What is the specific technical capability of the 'DEUTERIUM-TRITIUM DENSE PLASMA FOCUS NEUTRON EFFECTS SYSTEM' and its intended use within the DoD?

The 'DEUTERIUM-TRITIUM DENSE PLASMA FOCUS NEUTRON EFFECTS SYSTEM' is a specialized piece of equipment designed to generate and control high-energy plasma reactions using deuterium and tritium isotopes. Its primary function is to simulate the effects of neutron radiation, which is crucial for testing the resilience and performance of materials, electronic components, and potentially weapon systems under conditions mimicking nuclear events or high-radiation environments. This allows the Department of Defense (DoD) to assess vulnerabilities, develop hardening strategies, and ensure the reliability of critical assets in radiation-intensive scenarios. The system's output is vital for research and development in areas such as nuclear survivability and advanced materials science for defense applications.

How does the Cost Plus Fixed Fee (CPFF) contract structure impact the overall cost and risk for the government compared to other contract types?

The Cost Plus Fixed Fee (CPFF) contract structure allows the contractor (Verus Research, LLC) to recover all allowable costs incurred during performance, plus a predetermined fixed fee representing profit. This structure is often used for research and development or complex projects where the scope and costs are not precisely definable at the outset. For the government, CPFF offers flexibility to adapt to evolving requirements and ensures that contractors are willing to undertake high-risk, innovative projects. However, it carries a higher risk of cost overruns compared to fixed-price contracts, as the government bears the brunt of unforeseen cost increases. Diligent oversight is crucial to manage allowable costs and ensure the fixed fee remains a fair profit for the work performed.

What is the significance of Verus Research, LLC being the sole awardee for this specialized system?

Verus Research, LLC being the sole awardee suggests that, following a full and open competition, they were determined to be the most qualified or offer the best value for this highly specialized system. This could be due to their unique technical expertise, proprietary technology, existing infrastructure, or a combination of factors that made their proposal stand out. While a single awardee might raise questions about the breadth of competition, it can also indicate a mature market where only a few entities possess the necessary capabilities. For the government, it means they have secured the services of a potentially leading expert in this niche field, though it also concentrates risk with a single provider.

What are the potential long-term implications of this contract for defense research and technological advancement?

This contract has significant long-term implications for defense research and technological advancement by providing a critical capability for understanding and mitigating the effects of neutron radiation. The data generated from this system will inform the design and development of more resilient military hardware, improve survivability of personnel and equipment in hostile environments, and potentially lead to breakthroughs in materials science and nuclear engineering. It supports the DoD's strategic goals of maintaining technological superiority and ensuring operational effectiveness in complex threat landscapes. The investment in such specialized infrastructure also fosters expertise within the defense industrial base.

How does the geographic location in New Mexico influence the contract's impact on the local economy and workforce?

The contract's performance in New Mexico suggests a direct economic impact on the state's high-tech and research sectors. Verus Research, LLC's operations there likely contribute to job creation, particularly for highly skilled scientists, engineers, and technicians. This can stimulate local economic growth through wages, procurement from local suppliers, and increased demand for related services. Furthermore, it reinforces New Mexico's position as a hub for specialized scientific research and defense contracting, potentially attracting further investment and talent to the region. The presence of such advanced facilities can also foster educational partnerships and workforce development initiatives.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 6100 UPTOWN BLVD NE STE 260, ALBUQUERQUE, NM, 87110

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

Financial Breakdown

Contract Ceiling: $38,457,484

Exercised Options: $38,457,484

Current Obligation: $34,057,932

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $735,107

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W900KK19D0007

IDV Type: IDC

Timeline