DoD awards $68.9M for GEOINT software development, with ARA Inc. securing a multi-year contract

Contract Overview

Contract Amount: $68,903,858 ($68.9M)

Contractor: Applied Research Associates, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-09-30

End Date: 2024-01-25

Contract Duration: 1,212 days

Daily Burn Rate: $56.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: GEOSPATIAL INTELLIGENCE (GEOINT) SOFTWARE DEVELOPMENT AND SUPPORT SERVICES FOR UP TO THREE YEARS FOR ARMY RESEARCH LABORATORY AND NATIONAL GEOSPATIAL-INTELLIGENCE AGENCY

Place of Performance

Location: LAS CRUCES, DONA ANA County, NEW MEXICO, 88007

State: New Mexico Government Spending

Plain-Language Summary

Department of Defense obligated $68.9 million to APPLIED RESEARCH ASSOCIATES, INC. for work described as: GEOSPATIAL INTELLIGENCE (GEOINT) SOFTWARE DEVELOPMENT AND SUPPORT SERVICES FOR UP TO THREE YEARS FOR ARMY RESEARCH LABORATORY AND NATIONAL GEOSPATIAL-INTELLIGENCE AGENCY Key points: 1. Contract value of $68.9M over approximately 3 years suggests significant investment in geospatial intelligence capabilities. 2. Full and open competition indicates a broad market search, potentially leading to competitive pricing. 3. Research and Development (R&D) focus highlights the contract's role in advancing scientific and technical knowledge. 4. The contract's duration and scope point to a strategic need for ongoing support and development in a critical intelligence domain. 5. Cost Plus Fixed Fee (CPFF) pricing structure requires careful monitoring to ensure contractor efficiency and cost control. 6. The absence of small business set-asides means opportunities for smaller firms may be limited to subcontracting.

Value Assessment

Rating: good

The contract's total value of $68.9M over roughly 3.3 years averages to approximately $20.9M annually. Benchmarking this against similar R&D contracts in the defense sector requires detailed analysis of scope and complexity. However, the CPFF structure, while common for R&D, necessitates vigilance to ensure costs remain reasonable and aligned with the fixed fee. The contract's value appears commensurate with specialized software development and support services for advanced intelligence applications.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors were invited to bid. This approach typically fosters a competitive environment, potentially driving down costs and encouraging innovation. The number of bidders is not specified, but the open competition is a positive indicator for price discovery and value for taxpayers.

Taxpayer Impact: Full and open competition generally benefits taxpayers by ensuring that the government explores a wide range of potential solutions and pricing, leading to a more cost-effective outcome.

Public Impact

The Army Research Laboratory and the National Geospatial-Intelligence Agency are the primary beneficiaries, receiving advanced GEOINT software development and support. Services delivered include critical software development and ongoing support essential for national security and intelligence gathering. The contract's impact is primarily national, supporting federal intelligence and research capabilities. Workforce implications may include specialized roles for software engineers, geospatial analysts, and R&D scientists.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Fixed Fee (CPFF) contract type can incentivize contractors to incur costs that may not be strictly necessary to achieve the fixed fee, requiring robust oversight.
Lack of specific performance metrics or award fee structures in the provided data makes it difficult to assess performance incentives beyond the fixed fee.
The duration of the contract (over 3 years) necessitates ongoing monitoring to ensure continued alignment with evolving agency needs and technological advancements.

Positive Signals

Awarded under full and open competition, indicating a potentially competitive bidding process that could lead to better value.
The contract supports critical R&D functions for key intelligence agencies, aligning with national security priorities.
Applied Research Associates, Inc. has a track record in defense contracting, suggesting familiarity with the operational environment and requirements.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences, excluding biotechnology. The market for GEOINT software development is highly specialized, driven by government demand for advanced analytical and processing capabilities. Spending in this area is often characterized by long-term investments in technology and expertise, with significant barriers to entry due to the need for specialized knowledge and security clearances. Comparable spending benchmarks would typically be found within other large-scale R&D contracts for intelligence or defense agencies.

Small Business Impact

The contract data indicates that this was not a small business set-aside. Applied Research Associates, Inc. is not listed as a small business. This means that prime contracting opportunities were not specifically reserved for small businesses. However, there may be opportunities for small businesses to participate as subcontractors to Applied Research Associates, Inc., depending on the company's subcontracting plan and the nature of the work.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with contract terms and conditions. The Department of Defense's internal audit and oversight mechanisms, including the Inspector General, would also play a role in monitoring financial expenditures and program performance. Transparency is facilitated through contract databases, but detailed performance reports are typically not publicly available.

Related Government Programs

Geospatial Intelligence Support Services
Defense Research and Development Contracts
National Geospatial-Intelligence Agency Contracts
Army Research Laboratory Contracts
Software Development Services for Government

Risk Flags

Cost Plus Fixed Fee (CPFF) pricing structure requires diligent oversight to manage potential cost overruns.
Contract duration of over three years necessitates ongoing monitoring for relevance and efficiency.
Lack of specific performance metrics in the provided data makes it difficult to assess performance incentives.
The specialized nature of GEOINT R&D may present challenges in finding comparable benchmarks for value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $68.9 million to APPLIED RESEARCH ASSOCIATES, INC.. GEOSPATIAL INTELLIGENCE (GEOINT) SOFTWARE DEVELOPMENT AND SUPPORT SERVICES FOR UP TO THREE YEARS FOR ARMY RESEARCH LABORATORY AND NATIONAL GEOSPATIAL-INTELLIGENCE AGENCY

Who is the contractor on this award?

The obligated recipient is APPLIED RESEARCH ASSOCIATES, 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 $68.9 million.

What is the period of performance?

Start: 2020-09-30. End: 2024-01-25.

What is the historical spending pattern of the Department of Defense on similar GEOINT software development contracts?

Analyzing historical spending on similar GEOINT software development contracts by the Department of Defense (DoD) reveals a consistent and significant investment in this capability. Over the past decade, the DoD has allocated billions of dollars towards acquiring and developing advanced geospatial intelligence tools and services. This spending is driven by the increasing reliance on accurate and timely geospatial data for military operations, intelligence gathering, and strategic planning. Contracts often involve complex software engineering, data fusion, advanced analytics, and visualization platforms. Spending trends show a shift towards cloud-based solutions, artificial intelligence integration, and real-time data processing. While specific figures fluctuate annually based on budgetary priorities and emerging threats, the overall trajectory indicates sustained or increasing investment in GEOINT technologies to maintain a strategic advantage.

How does the pricing structure (Cost Plus Fixed Fee) compare to other contract types for R&D services in the defense sector?

The Cost Plus Fixed Fee (CPFF) contract type is commonly used for Research and Development (R&D) services in the defense sector, particularly when the scope of work is not fully defined or is expected to evolve. In a CPFF contract, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure differs from Fixed-Price contracts, where the price is set regardless of the actual costs incurred, and Cost-Plus-Incentive-Fee (CPIF) contracts, which include incentives for meeting or exceeding certain performance targets. While CPFF offers flexibility for R&D projects with inherent uncertainties, it carries a higher risk of cost overruns compared to fixed-price agreements. Effective oversight is crucial to manage costs and ensure the contractor remains efficient. Compared to CPIF, CPFF offers less direct incentive for cost savings beyond the initial cost estimation, making the fixed fee the primary profit driver.

What is Applied Research Associates, Inc.'s track record with government contracts, particularly in R&D and GEOINT?

Applied Research Associates, Inc. (ARA) has a substantial track record with government contracts, including significant work within the defense and R&D sectors. While specific details on their GEOINT-specific contract history require deeper database searches, ARA is known for its expertise in areas such as advanced materials, engineering services, simulation, and scientific research. They have been awarded numerous contracts across various government agencies, including the Department of Defense, Department of Energy, and others. Their involvement in R&D projects suggests a capability to handle complex technical challenges and deliver innovative solutions. The company's longevity and consistent contract awards indicate a level of reliability and competence in meeting government requirements. Further analysis would involve examining past performance evaluations and contract values to fully assess their performance in GEOINT-related areas.

What are the potential risks associated with a Cost Plus Fixed Fee contract for GEOINT software development?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract for GEOINT software development is the potential for cost overruns. Because the contractor is reimbursed for all allowable costs, there is less inherent incentive to control expenses compared to fixed-price contracts. This can lead to the government paying more than initially anticipated if costs escalate unexpectedly or if the contractor's cost management is inefficient. Another risk is scope creep, where the project's requirements expand beyond the initial agreement, leading to increased costs and potentially delays. Without robust oversight and clear definition of allowable costs, contractors might be less motivated to find the most cost-effective solutions. Additionally, the fixed fee, once negotiated, may not adequately reflect the actual effort or complexity if unforeseen challenges arise, potentially impacting contractor motivation or leading to disputes.

How does the geographic location of the contractor (New Mexico) impact the delivery of services for agencies like the Army Research Laboratory and NGA?

The geographic location of Applied Research Associates, Inc. in New Mexico has several implications for the delivery of GEOINT software development and support services to agencies like the Army Research Laboratory (ARL) and the National Geospatial-Intelligence Agency (NGA). While much of the software development and analysis can be performed remotely, the physical proximity to key research facilities or operational centers can be advantageous for collaboration, testing, and rapid deployment. ARL has facilities in Maryland, and NGA headquarters are in Virginia. If ARA's New Mexico operations require significant on-site presence or close collaboration with personnel at these locations, travel costs and time differences could become factors. However, with modern communication and collaboration tools, remote work is highly feasible. The key consideration is ensuring seamless communication, secure data transfer, and efficient project management regardless of the physical distance, which is standard practice in many large-scale government contracts.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: W911QX14R0020

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 4300 SAN MATEO BLVD NE STE A220, ALBUQUERQUE, NM, 87110

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

Financial Breakdown

Contract Ceiling: $74,999,844

Exercised Options: $74,999,844

Current Obligation: $68,903,858

Subaward Activity

Number of Subawards: 76

Total Subaward Amount: $41,053,510

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W911QX16D0015

IDV Type: IDC

Timeline