Department of the Army's $5.3M RAND Corporation contract for professional services awarded without competition

Contract Overview

Contract Amount: $5,306,074 ($5.3M)

Contractor: THE Rand Corporation

Awarding Agency: Department of Defense

Start Date: 2020-06-30

End Date: 2022-06-29

Contract Duration: 729 days

Daily Burn Rate: $7.3K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: FY20 RAND ADD-ON PROJECTS # 2020-0580, 2020-0807,2020-0805-1,2020-0332,2020-0471-1,2020-0720,2020-0020,2020-0659,2020-0670 AND 2020-0807.

Place of Performance

Location: FORT BRAGG, CUMBERLAND County, NORTH CAROLINA, 28310

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $5.3 million to THE RAND CORPORATION for work described as: FY20 RAND ADD-ON PROJECTS # 2020-0580, 2020-0807,2020-0805-1,2020-0332,2020-0471-1,2020-0720,2020-0020,2020-0659,2020-0670 AND 2020-0807. Key points: 1. Contract awarded to a single, well-established research corporation, raising questions about competitive pricing. 2. The contract's duration of two years suggests ongoing research or support needs. 3. Awarded as a delivery order under a larger contract, indicating a specific task within a broader agreement. 4. The 'Cost Plus Fixed Fee' contract type can lead to cost overruns if not managed carefully. 5. The absence of small business participation is noted, with no set-aside or subcontracting requirements. 6. The contract falls under 'All Other Professional, Scientific, and Technical Services,' a broad category.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without specific deliverables or comparable contracts. The RAND Corporation is a known entity for research and analysis, but the 'Cost Plus Fixed Fee' structure, combined with a lack of competition, makes it difficult to assess if the government received the best possible price. The total award amount of $5.3 million over two years suggests a significant scope of work, but the absence of detailed performance metrics or pricing breakdowns hinders a definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, The RAND Corporation, was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. While sole-source awards can be justified for unique capabilities or urgent needs, they limit price discovery and potentially increase costs for the government.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings that can arise from a competitive bidding environment, potentially leading to higher overall expenditure for similar services.

Public Impact

The primary beneficiary is the Department of the Army, receiving professional, scientific, and technical services. The services delivered are broadly categorized as 'All Other Professional, Scientific, and Technical Services,' likely involving research, analysis, and advisory support. The geographic impact is primarily within the Department of Defense's operational sphere, with specific location of service delivery not detailed. Workforce implications are likely concentrated within The RAND Corporation's research staff, with no direct public workforce impact specified.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to suboptimal pricing.
Cost Plus Fixed Fee contract type carries inherent risk of cost escalation.
Broad service category makes it difficult to assess specific value delivered.
No small business participation noted, potentially limiting broader economic impact.

Positive Signals

Awarded to a reputable research institution (RAND Corporation) with a history of government support.
Contract duration suggests a need for sustained, specialized expertise.
Delivery order structure implies a defined scope within a larger framework.

Sector Analysis

This contract falls within the Professional, Scientific, and Technical Services sector, a broad industry encompassing a wide range of specialized expertise. The market for these services is highly competitive, with numerous firms offering research, analysis, and consulting. However, specific niches, such as those occupied by RAND Corporation, may have fewer direct competitors. Comparable spending benchmarks are difficult to establish due to the broad nature of the NAICS code (541990) and the specialized, non-competed nature of this award.

Small Business Impact

This contract did not include any small business set-aside provisions, nor does it appear to have requirements for small business subcontracting. The award to The RAND Corporation, a large research organization, suggests that the focus was on specialized expertise rather than small business engagement. This lack of small business involvement means potential opportunities for smaller firms in this specific procurement are absent, and the broader impact on the small business ecosystem for this particular contract is minimal.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. As a delivery order under a larger contract, existing oversight mechanisms for that parent contract would likely apply. Transparency is limited due to the sole-source nature and the broad description of services. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

RAND Corporation Research Contracts
Department of Defense Professional Services
Army Research and Development Support
Cost Plus Fixed Fee Contracts
Sole Source Procurements

Risk Flags

Sole-source award lacks competitive justification.
Cost Plus Fixed Fee contract type poses risk of cost overruns.
Broad service category hinders specific value assessment.
No small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $5.3 million to THE RAND CORPORATION. FY20 RAND ADD-ON PROJECTS # 2020-0580, 2020-0807,2020-0805-1,2020-0332,2020-0471-1,2020-0720,2020-0020,2020-0659,2020-0670 AND 2020-0807.

Who is the contractor on this award?

The obligated recipient is THE RAND CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $5.3 million.

What is the period of performance?

Start: 2020-06-30. End: 2022-06-29.

What is The RAND Corporation's track record with the Department of Defense?

The RAND Corporation has a long-standing relationship with the Department of Defense (DoD), serving as a federally funded research and development center (FFRDC). They have historically provided extensive research, analysis, and policy recommendations across various defense domains, including national security strategy, military operations, and technological advancements. Their work often involves complex, long-term studies requiring deep expertise. The DoD is a significant client, and RAND's involvement typically spans numerous contracts and task orders, reflecting a deep institutional knowledge and established trust. This specific contract, awarded without competition, suggests a continuation or expansion of previously established work or a recognized unique capability.

How does the 'Cost Plus Fixed Fee' (CPFF) contract type compare to other pricing arrangements for similar services?

The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is not precisely defined at the outset, or when innovation and flexibility are paramount, such as in research and development. Under CPFF, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This contrasts with fixed-price contracts, where the price is set regardless of actual costs, offering greater cost certainty to the buyer but potentially higher risk for the contractor. Compared to other cost-reimbursement types like Cost Plus Incentive Fee (CPIF), CPFF offers less incentive for the contractor to control costs beyond what's necessary to achieve the fixed fee. For taxpayers, CPFF can be less predictable in terms of final cost compared to fixed-price options, necessitating robust oversight to manage expenditures.

What are the primary risks associated with sole-source procurements like this one?

The primary risks associated with sole-source procurements are diminished price competition and potentially reduced innovation. Without multiple bidders vying for the contract, the government loses the opportunity to benefit from competitive pressures that typically drive down prices and encourage more efficient service delivery. This can lead to the government paying a premium for goods or services. Furthermore, a lack of competition can reduce the incentive for the awarded contractor to innovate or improve their offerings, as there is no immediate threat from competitors. For taxpayers, this translates to a higher likelihood of paying more than necessary and potentially receiving less value, underscoring the importance of stringent justification for sole-source awards and robust oversight.

What does the broad NAICS code '541990 - All Other Professional, Scientific, and Technical Services' imply about the contract's scope?

The NAICS code 541990, 'All Other Professional, Scientific, and Technical Services,' is a catch-all category for establishments primarily engaged in providing a wide range of professional, scientific, and technical services not elsewhere classified. This broadness implies that the contract's specific deliverables could encompass diverse activities, such as research, consulting, data analysis, testing, or specialized advisory roles. For this specific contract with The RAND Corporation, it suggests the work is highly specialized and does not fit neatly into more defined categories like engineering, computer systems design, or management consulting. The lack of specificity in the NAICS code, combined with the sole-source award, makes it challenging to benchmark against similar contracts or assess the precise nature and value of the services rendered without further detailed information on the contract's statement of work.

How does the contract duration of 729 days (approximately 2 years) impact the assessment of its value?

A contract duration of approximately two years suggests that the services required are not for a short-term, one-off task but rather for ongoing support, research, or a project with a substantial timeline. For a research and analysis organization like The RAND Corporation, this duration is typical for complex studies or sustained advisory roles. From a value perspective, a longer duration can allow for deeper engagement, more thorough analysis, and the development of more comprehensive solutions. However, it also increases the potential for cost escalation, especially under a Cost Plus Fixed Fee arrangement. The value assessment must consider whether the extended period is necessary to achieve the program's objectives and if the associated costs are justified by the expected outcomes and the contractor's unique capabilities.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

Product/Service Code: SPECIAL STUDIES/ANALYSIS, NOT R&D › SPECIAL STUDIES - NOT R and D

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1776 MAIN ST, SANTA MONICA, CA, 90401

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

Financial Breakdown

Contract Ceiling: $5,306,100

Exercised Options: $5,306,100

Current Obligation: $5,306,074

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $60,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W91CRB15D0022

IDV Type: IDC

Timeline