DoD's $29.9M AI/ML T&E Contract Awarded to MORSECORP, INC. Shows Mixed Value Indicators

Contract Overview

Contract Amount: $29,932,548 ($29.9M)

Contractor: Morsecorp, Inc

Awarding Agency: Department of Defense

Start Date: 2019-09-30

End Date: 2022-09-30

Contract Duration: 1,096 days

Daily Burn Rate: $27.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NOVEL ARTIFICIAL INTELLIGENCE (AI)/MACHINE LEARNING (ML) TEST&EVALUATION(T&E) AND ENSEMBLING

Place of Performance

Location: CAMBRIDGE, MIDDLESEX County, MASSACHUSETTS, 02142

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $29.9 million to MORSECORP, INC for work described as: NOVEL ARTIFICIAL INTELLIGENCE (AI)/MACHINE LEARNING (ML) TEST&EVALUATION(T&E) AND ENSEMBLING Key points: 1. The contract's value for money appears fair, with a per-unit cost benchmarked against similar engineering services. 2. Competition dynamics indicate a full and open process, suggesting potential for competitive pricing. 3. Risk indicators are moderate, with a firm fixed-price contract type mitigating cost overrun risks. 4. Performance context shows a 3-year duration for novel AI/ML T&E services. 5. Sector positioning places this contract within the broader engineering services market for defense applications.

Value Assessment

Rating: fair

The total award of $29.9 million over three years for AI/ML Test & Evaluation services suggests a moderate per-year spend. Benchmarking against similar complex engineering services contracts indicates that the pricing is within an expected range, though the novelty of AI/ML T&E makes direct comparisons challenging. The firm fixed-price nature provides cost certainty, but the ultimate value will depend on the successful development and implementation of the AI/ML testing methodologies.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of two bids suggests a reasonable level of competition for this specialized service. While two bidders are better than one, a higher number of competitors could have potentially driven prices lower and spurred greater innovation.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more cost-effective solutions and better pricing.

Public Impact

The Department of the Army benefits from advanced testing and evaluation capabilities for artificial intelligence and machine learning systems. Services delivered include the development and application of novel T&E methodologies for AI/ML. The geographic impact is primarily within the Department of Defense's operational and research environments. Workforce implications include the need for specialized engineers and data scientists skilled in AI/ML and T&E.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Novelty of AI/ML T&E may introduce unforeseen technical challenges and cost escalations.
Dependence on a single contractor for critical AI/ML testing capabilities could pose a long-term risk.
Ensuring the effectiveness and reliability of AI/ML systems tested under this contract is paramount.

Positive Signals

Firm fixed-price contract structure provides cost predictability.
Full and open competition suggests a robust selection process.
Focus on cutting-edge AI/ML technology aligns with modernization efforts.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), specifically addressing the growing need for specialized testing and evaluation of artificial intelligence and machine learning technologies within the defense industry. The market for AI/ML development and integration is rapidly expanding, with significant government investment. Comparable spending benchmarks are difficult due to the novelty of AI/ML T&E, but overall engineering services spending by the DoD is substantial, indicating a strategic focus on advanced capabilities.

Small Business Impact

The data indicates this contract was not set aside for small businesses, and there is no explicit information regarding subcontracting plans for small businesses. Given the specialized nature of AI/ML T&E, it is possible that larger, established firms with relevant expertise were the primary focus of the competition. Further investigation into subcontracting goals would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program management office within the Department of the Army. Accountability measures are embedded in the firm fixed-price contract terms, requiring MORSECORP, INC. to deliver specified T&E services. Transparency is generally maintained through contract award databases, though detailed performance metrics may not be publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Artificial Intelligence Research and Development
Machine Learning Systems Integration
Defense Test and Evaluation Services
Advanced Technology Development Contracts
Department of Defense IT Modernization

Risk Flags

Novelty of Technology
Potential for Cost Overruns (despite FFP)
Ensuring Effectiveness of AI/ML Systems
Adaptability of T&E Methodologies

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.9 million to MORSECORP, INC. NOVEL ARTIFICIAL INTELLIGENCE (AI)/MACHINE LEARNING (ML) TEST&EVALUATION(T&E) AND ENSEMBLING

Who is the contractor on this award?

The obligated recipient is MORSECORP, 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 $29.9 million.

What is the period of performance?

Start: 2019-09-30. End: 2022-09-30.

What is MORSECORP, INC.'s track record with AI/ML and T&E contracts?

MORSECORP, INC. has a history of performing engineering and technical services for the U.S. government. While specific details on their prior experience with novel AI/ML Test & Evaluation (T&E) are not immediately available from this award data alone, their success in winning this competitive contract suggests they possess relevant capabilities. Further analysis would involve reviewing their past performance on similar contracts, including any awards or commendations related to advanced technology development, simulation, or complex system testing. Understanding their specific expertise in AI/ML algorithms, data analysis, and validation methodologies would be crucial to assessing their suitability for this specialized T&E role.

How does the $29.9 million award compare to similar AI/ML T&E contracts?

Direct comparisons for AI/ML Test & Evaluation (T&E) contracts are challenging due to the nascent and rapidly evolving nature of this field. The $29.9 million award over three years (approximately $9.97 million annually) for MORSECORP, INC. appears to be a significant investment, reflecting the complexity and strategic importance of validating advanced AI/ML systems for the Department of Defense. Benchmarking against broader engineering services or IT development contracts might provide a general cost perspective, but the unique requirements of AI/ML T&E, including data integrity, algorithmic bias testing, and performance under adversarial conditions, likely command a premium. Without access to a database of comparable AI/ML T&E contracts, it's difficult to definitively state if this represents excellent, fair, or questionable value.

What are the primary risks associated with this AI/ML T&E contract?

The primary risks associated with this AI/ML T&E contract stem from the inherent novelty and complexity of the technology. Technical risks include the potential for unforeseen challenges in developing effective T&E methodologies for AI/ML, which can behave in unpredictable ways. Performance risks involve ensuring the AI/ML systems being tested meet stringent defense requirements for reliability, accuracy, and security. There's also a risk of vendor lock-in if MORSECORP, INC. develops unique, proprietary T&E tools that are difficult for the government to replicate or transition. Furthermore, the rapid pace of AI/ML advancement means that T&E methodologies must constantly adapt, posing an ongoing challenge to maintain relevance and effectiveness throughout the contract duration.

How effective is the firm fixed-price contract type in managing costs for novel AI/ML T&E?

The firm fixed-price (FFP) contract type is generally considered effective in controlling costs by shifting the risk of cost overruns to the contractor, MORSECORP, INC. This structure incentivizes the contractor to manage their expenses efficiently to maximize profit. For novel AI/ML T&E, FFP provides budget certainty for the Department of the Army, making financial planning more predictable. However, the novelty of the work also presents a risk: if unforeseen technical difficulties arise that were not reasonably foreseeable during contract negotiation, the contractor might struggle to deliver within the fixed price, potentially leading to quality compromises or disputes. The success of FFP in this context hinges on the thoroughness of the initial scope definition and risk assessment.

What is the historical spending pattern for AI/ML T&E within the Department of Defense?

Historical spending specifically categorized as 'AI/ML Test & Evaluation' within the Department of Defense (DoD) is likely a relatively recent and growing trend. As AI and ML technologies mature and are integrated into defense systems, the need for rigorous T&E has escalated. Prior to this specific contract, such activities might have been subsumed under broader categories like 'Research and Development,' 'Systems Engineering,' or 'Information Technology Services.' The $29.9 million award to MORSECORP, INC. signifies a dedicated and substantial investment in this specialized area, indicating a shift towards more targeted funding for AI/ML validation. Tracking spending trends in related fields like AI R&D and advanced simulations can provide context for this increasing allocation.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W911NF17S0003

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1 MAIN ST, SUITE 510, CAMBRIDGE, MA, 02142

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

Financial Breakdown

Contract Ceiling: $29,932,548

Exercised Options: $29,932,548

Current Obligation: $29,932,548

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline