DoD's $1.4B R&D Contract Awarded to 21st Century Systems, Inc. Lacked Competition
Contract Overview
Contract Amount: $14,192,519 ($14.2M)
Contractor: 21ST Century Systems, Inc.
Awarding Agency: Department of Defense
Start Date: 2005-06-17
End Date: 2009-09-30
Contract Duration: 1,566 days
Daily Burn Rate: $9.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Place of Performance
Location: OMAHA, DOUGLAS County, NEBRASKA, 68106
State: Nebraska Government Spending
Plain-Language Summary
Department of Defense obligated $14.2 million to 21ST CENTURY SYSTEMS, INC. for work described as: Key points: 1. The contract value of $1.4 billion represents a significant investment in R&D. 2. Lack of competition raises concerns about potential overpricing and limited innovation. 3. The 'Research and Development in the Physical, Engineering, and Life Sciences' sector is critical for national security. 4. The 'Cost Plus Fixed Fee' contract type can incentivize cost overruns.
Value Assessment
Rating: questionable
The contract's total award value is $1.4 billion. Without competitive bidding, it's difficult to assess if this price reflects fair market value for the R&D services provided. The 'Cost Plus Fixed Fee' structure, while common in R&D, can lead to higher costs than fixed-price contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially allows the contractor to set terms that may not be the most cost-effective for the government.
Taxpayer Impact: The absence of competition for a $1.4 billion contract means taxpayers may have paid a premium, as the government did not leverage market forces to secure the best possible price.
Public Impact
Taxpayers funded a substantial $1.4 billion research and development effort. The lack of competition may have stifled innovation by not exploring alternative solutions from other firms. The duration of the contract (over 4 years) suggests a long-term reliance on a single provider without re-evaluation.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- High contract value
Positive Signals
- Focus on critical R&D
Sector Analysis
This contract falls under the 'Research and Development in the Physical, Engineering, and Life Sciences' sector, a crucial area for technological advancement and national security. The $1.4 billion award is substantial within this sector, highlighting the importance of competitive practices to ensure value for such significant investments.
Small Business Impact
The data indicates this contract was not awarded to a small business (ss: false). Therefore, there is no direct benefit or analysis regarding small business participation in this specific award.
Oversight & Accountability
The 'NOT COMPETED' status suggests a potential lack of robust oversight in the initial procurement phase. Further review would be needed to understand the justification for the sole-source award and ensure accountability for the funds expended.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Potential for cost overruns (CPFF)
- Limited transparency in pricing
- No small business participation
Tags
research-and-development-in-the-physical, department-of-defense, ne, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $14.2 million to 21ST CENTURY SYSTEMS, INC.. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is 21ST CENTURY SYSTEMS, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $14.2 million.
What is the period of performance?
Start: 2005-06-17. End: 2009-09-30.
What was the specific justification for awarding this $1.4 billion R&D contract on a sole-source basis, and were alternative solutions explored?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of market availability. For a contract of this magnitude, a thorough review of the justification is essential to ensure it was indeed the only viable option. Without this information, it's impossible to definitively assess if the government acted in the best interest of taxpayers or if competitive alternatives were overlooked.
How did the 'Cost Plus Fixed Fee' structure impact the final cost compared to potential fixed-price bids?
Cost Plus Fixed Fee (CPFF) contracts reimburse the contractor for allowable costs plus a fixed fee representing profit. While offering flexibility for R&D, CPFF can lead to higher total costs if the contractor's actual expenses exceed initial estimates. Without competitive bids, it's challenging to benchmark if the fixed fee and reimbursed costs were reasonable compared to what a fixed-price contract might have yielded.
What were the key R&D outcomes achieved for the $1.4 billion investment, and were they aligned with the Department of Defense's strategic goals?
The effectiveness of this contract hinges on the tangible results of the R&D conducted. A $1.4 billion investment should yield significant advancements. Evaluating the contract's success requires assessing whether the delivered research and development met or exceeded expectations, contributed to technological superiority, and directly supported the DoD's mission objectives.
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: 12152 WINDSOR HALL WAY, HERNDON, VA, 20170
Business Categories: Category Business, Small Business, Woman Owned Business
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2005-06-17
Current End Date: 2009-09-30
Potential End Date: 2009-09-30 00:00:00
Last Modified: 2025-02-27
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