Department of Defense awards $14.6M R&D contract to AREA-I, LLC for specialized research

Contract Overview

Contract Amount: $14,565,586 ($14.6M)

Contractor: Area-I, LLC

Awarding Agency: Department of Defense

Start Date: 2022-10-01

End Date: 2026-06-30

Contract Duration: 1,368 days

Daily Burn Rate: $10.6K/day

Competition Type: FOLLOW ON TO COMPETED ACTION

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: TASK ORDER 13 AREA I SBIR PHASE III

Place of Performance

Location: MOFFETT FIELD, SANTA CLARA County, CALIFORNIA, 94035

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $14.6 million to AREA-I, LLC for work described as: TASK ORDER 13 AREA I SBIR PHASE III Key points: 1. Contract awarded as a follow-on to a competed action, suggesting prior positive performance or market assessment. 2. The contract's cost-plus-fixed-fee structure allows for flexibility in research but requires careful cost monitoring. 3. Research and Development in Physical, Engineering, and Life Sciences is a critical area for defense innovation. 4. The contract duration of over three years indicates a significant, long-term research objective. 5. The small business status of the contractor is not specified, but the contract is not a small business set-aside. 6. Geographic location in California may indicate a concentration of specialized R&D capabilities.

Value Assessment

Rating: good

The contract value of $14.6 million for a three-year R&D effort appears reasonable within the context of specialized defense research. Benchmarking against similar SBIR Phase III contracts would provide a more precise value-for-money assessment. The cost-plus-fixed-fee (CPFF) pricing structure is common for R&D where scope may evolve, but it necessitates robust oversight to ensure costs remain aligned with objectives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract is a 'FOLLOW ON TO COMPETED ACTION,' which implies that the initial award was competed, but this specific task order may have had limited competition. Further details on the original competition and the rationale for this follow-on action are needed to fully assess the competitive landscape. Limited competition can sometimes lead to less favorable pricing for the government.

Taxpayer Impact: While the initial award was competed, the limited nature of this follow-on action warrants scrutiny to ensure taxpayers are receiving the best possible value and that the contractor is incentivized to control costs.

Public Impact

This contract directly supports the Department of the Army's research and development objectives in physical, engineering, and life sciences. The research is expected to advance technological capabilities relevant to national defense. The primary beneficiary is the Department of Defense, which will gain from the R&D outcomes. The contract is being performed in California, potentially leveraging the state's strong R&D ecosystem and workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Fixed Fee contracts for R&D.
Need for clear performance metrics to ensure research objectives are met within budget and timeline.
Limited competition on follow-on actions can impact price negotiation and value for money.

Positive Signals

Follow-on to a competed action suggests a degree of proven capability and potential for successful project completion.
The specific R&D area (NAICS 541712) is crucial for technological advancement in defense.
Long contract duration allows for in-depth research and development.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences (excluding biotechnology). This is a critical area for defense innovation, with significant government investment annually. Comparable spending benchmarks would involve looking at other SBIR Phase III contracts or R&D efforts within the Department of Defense and other agencies focused on similar scientific domains.

Small Business Impact

The data indicates this contract is not a small business set-aside (sb=false). While the primary contractor's size is not explicitly stated, the contract type and value suggest it could be awarded to either small or large businesses. Further investigation into AREA-I, LLC's size status would clarify its role and any potential subcontracting opportunities for small businesses.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army contracting and program management offices. Performance monitoring, financial reviews, and adherence to the contract terms will be key accountability measures. Transparency would be enhanced by public reporting of milestones and outcomes, though specific R&D details may be sensitive.

Related Government Programs

SBIR Program
Department of Defense Research and Development
Army Research Laboratory Contracts
Advanced Technology Development Contracts

Risk Flags

Cost Plus Fixed Fee contract type requires careful monitoring of expenditures.
Follow-on action to competed award may indicate limited competition for this specific task order.
Specific R&D outcomes and their impact are not detailed, requiring performance monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.6 million to AREA-I, LLC. TASK ORDER 13 AREA I SBIR PHASE III

Who is the contractor on this award?

The obligated recipient is AREA-I, 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 $14.6 million.

What is the period of performance?

Start: 2022-10-01. End: 2026-06-30.

What is the specific nature of the research AREA-I, LLC is conducting under this contract?

The contract falls under NAICS code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology).' While the specific project details are not provided in the summary data, SBIR Phase III contracts typically aim to commercialize technologies developed in earlier Small Business Innovation Research phases. Therefore, AREA-I, LLC is likely advancing a specific technology or product derived from prior R&D, with the goal of eventual transition into a defense program or commercial market. The 'AREA I' designation might refer to a specific research domain or program within the Department of the Army.

How does the $14.6 million value compare to similar R&D contracts for this type of research?

Benchmarking the $14.6 million value requires comparing it to other SBIR Phase III contracts or similar R&D efforts within the physical, engineering, and life sciences domain, particularly those awarded by the Department of Defense. SBIR Phase III contracts can vary significantly in value depending on the technology's maturity and commercialization potential. Without access to a broader dataset of comparable contracts, it's difficult to definitively state if this value is high or low. However, for a multi-year R&D effort with a goal of transition, $14.6 million is within a plausible range for specialized technological advancement.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract?

The primary risk with a CPFF contract, especially in R&D, is the potential for cost overruns. While the contractor receives a fixed fee, the government bears the risk of all allowable costs. If the research proves more complex or expensive than initially anticipated, the total cost to the government could exceed projections. Effective risk mitigation requires stringent oversight of expenditures, clear definition of research milestones, and robust communication channels to address challenges proactively. The contractor is incentivized to complete the work, but the government bears the financial risk of unforeseen R&D hurdles.

What does 'FOLLOW ON TO COMPETED ACTION' imply for competition and pricing?

'FOLLOW ON TO COMPETED ACTION' suggests that the initial contract or a preceding phase was awarded through a competitive process. This specific task order, however, might have been awarded on a sole-source or limited-competition basis, potentially leveraging the existing relationship and knowledge base. While the initial competition is positive, a follow-on action without renewed competition can limit price discovery and potentially lead to less favorable terms for the government compared to a fully competed scenario. The rationale for not re-competing needs to be clearly documented and justified.

What is the track record of AREA-I, LLC in performing government contracts, particularly R&D?

Information regarding AREA-I, LLC's specific track record is not provided in the summary data. To assess their performance, one would need to review their contract history, including past performance evaluations, any past disputes or terminations, and the successful completion of previous R&D projects, especially those that transitioned from SBIR phases. Their success in previous SBIR phases and the nature of this Phase III award (follow-on to competed action) suggest a potentially positive history, but a deeper dive into federal procurement databases and performance reviews is necessary for a comprehensive assessment.

How does this contract fit into the broader landscape of R&D spending within the Department of the Army?

This contract represents a small fraction of the Department of the Army's overall R&D budget, which typically runs into billions of dollars annually. It specifically targets a niche within physical, engineering, and life sciences R&D, likely supporting a particular technological advancement or program objective. The Army, like other military branches, invests heavily in R&D to maintain technological superiority. This contract, being an SBIR Phase III, signifies a focus on transitioning innovative technologies from small businesses into practical applications, aligning with the Army's strategic goals for modernization and capability enhancement.

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 › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FOLLOW ON TO COMPETED ACTION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1590 N ROBERTS RD NW STE 102, KENNESAW, GA, 30144

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

Financial Breakdown

Contract Ceiling: $22,043,679

Exercised Options: $14,565,586

Current Obligation: $14,565,586

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W911W617D0004

IDV Type: IDC

Timeline