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NAICS Newsletter March 22, 2011

NAICS 541712

Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

Government Contract and Procurement Analysis Report

Report Summary

This report, offered by epipeline, contains a brief analysis of the Federal government's procurement practices with regards to purchasing Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology).


You will find information on the top federal government agencies that purchase these services, as well as their procurement strategy (i.e. full and open competition, set-asides and more). Finally, there is a review of the top companies that are awarded federal government contracts for Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology).


To get a more comprehensive analysis and learn more about how epipeline can help you identify current and future bid opportunities, register for a live Demo.

This report takes an in-depth look at the 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)' industry, NAICS 541712. epipeline's Contract History Plus* provides you with a broad context and several perspectives that enable you to develop the best positioning and strategy for your company to more effectively compete for government contracts. The following graph illustrates one such perspective: the top Government departments/agencies buying these services over the last four fiscal years.

Top 10 Federal Agencies by % of Total Market FY07 through FY11 for NAICS 541712

WHAT IS NAICS 541712?

NAICS 541712 encompasses establishments primarily engaged in conducting research and experimental development (except biotechnology research and experimental development) in the physical, engineering, and life sciences, such as agriculture, electronics, environmental, biology, botany, computers, chemistry, food, fisheries, forests, geology, health, mathematics, medicine, oceanography, pharmacy, physics, veterinary and other allied subjects.

The description of NAICS 541712 is further broken out to include these additional specific topics:

  • Agriculture research and development laboratories or services (except biotechnology research and development)
  • Bacteriological research and development laboratories or services (except biotechnology research and development)
  • Biology research and development laboratories or services (except biotechnology research and development)
  • Botany research and development laboratories or services (except biotechnology research and development)
  • Chemical research and development laboratories or services (except biotechnology research and development)
  • Computer and related hardware research and development laboratories or services
  • Dental research and development laboratories or services
  • Electronic research and development laboratories or services
  • Engineering research and development laboratories or services
  • Entomological research and development laboratories or services (except biotechnology research and development)
  • Environmental research and development laboratories or services (except biotechnology research and development)
  • Experimental farms
  • Fisheries research and development laboratories or services
  • Food research and development laboratories or services (except biotechnology research and development)
  • Forestry research and development laboratories or services
  • Genetics research and development laboratories or services (except biotechnology research and development)
  • Geological research and development laboratories or services
  • Guided missile and space vehicle engine research and development
  • Guided missile and space vehicle parts (except engines) research and development
  • Health research and development laboratories or services (except biotechnology research and development)
  • Industrial research and development laboratories or services (except biotechnology research and development)
  • Life sciences research and development laboratories or services (except biotechnology research and development)
  • Mathematics research and development laboratories or services
  • Medical research and development laboratories or services (except biotechnology research and development)
  • Observatories, research institutions
  • Oceanographic research and development laboratories or services
  • Physical science research and development laboratories or services (except biotechnology research and development)
  • Physics research and development laboratories or services
  • Veterinary research and development laboratories or services (except biotechnology research and development)

Please be aware that providing physical, chemical, or other analytical testing services (except medical or veterinary)--are classified in Industry 541380, Testing Laboratories; providing medical laboratory testing for humans--are classified in U.S. Industry 621511, Medical Laboratories; conducting research and experimental development in biothechnology--are classified in U.S. Industry 541711, Research and Development in Biotechnology; and providing veterinary testing services--are classified in Industry 541940, Veterinary Services.

The size standard associated with NAICS 541712 is 500 employees (effective November 5, 2010), which means that a company, including its affiliates, would be considered a "small business" if it does not exceed an average of 500 employees annually.

Total reported spending under NAICS 541712 for the period of Fiscal Year 2007 (FY07) through Fiscal Year 2011 (FY11) was over $22.2 billion. FY11 reported spending of more than $458 million for services under NAICS 541712. The chart below illustrates the reported** spending by year for FY07 through FY11.

Reported Contract Spending for NAICS 541712 FY07 through FY11

Source: epipeline's Contract History Plus*

** Note: it is possible that some Defense spending for the more recent fiscal years (FY06 to present) is not as widely reported as earlier years. These numbers will likely increase as more departments and agencies report their current and historic contract spending.

WHO ISSUES THE CONTRACTS?

The Department of the Army was the largest procurer for these services for the last five fiscal years (FY07 through FY11), with over $4 billion in contract spending, comprising over 18% of the market share for NAICS 541712. The Missile Defense Agency took the second spot, with over $3.9 billion in reported spending for this period. The Department of the Air Force and the Department of the Navy took third and fourth places, respectively, making up a combined market share of 30.1% for all spending in NAICS 541712.

The Department of Energy and NASA spent $1.8 and $1.7 billion respectively during this time period with the rest of the top ten reporting spending just under $2.97 billion for NAICS 541712.

Top 10 Federal Agencies by % of Total Market FY07 through FY11 for NAICS 541712

Source: epipeline's Contract History Plus*

WHO WINS THE CONTRACTS?

According to the Central Contractor Registry (CCR), there are 15,769 companies registered under NAICS 541712 (source: active registrants, www.ccr.gov as of 3/18/2011). Of this number, 11,922 qualify as small businesses, which includes the following breakout by socioeconomic categories (some companies may qualify under more than one category):

  • 725 SBA Certified 8(a) contractors;
  • 256 SBA Certified HUBZone contractors; and
  • 967 Service Disabled Veteran Owned Small Businesses (SDVOSB).

NOTE, the CCR website states, "As of the July 30, 2008 release (4.08.2), CCR-registered vendors may elect not to display their registration in the CCR/FedReg Public Search." This could mean that there are more active contractors registered with the CCR than the resulting totals above represent.

The two charts below identify the top 10 Companies, by market share, for the period of FY07 through FY11. The first chart represents the top 10 companies that were awarded their contracts under ANY type of competition, whether it was full and open, small business set-aside, sole-sourced, etc. This list primarily consists of large businesses. The second chart, however, lists the top 10 companies that won their contracts under RESTRICTED competition. Specifically, epipeline limited this to those contracts awarded under the acquisition strategies listed below. The contract dollars represented on this second chart may not include all contract dollars for the individual contractor.

  • 8(a) Competed
  • 8(a) Small Disadvantaged (SDB) set-aside
  • 8(a) sole-source
  • SDB set-aside
  • SDB, 8(a) with HUBZone
  • Combination HUBZone and 8(a)
  • HUBZone set-aside
  • HUBZone sole-source
  • Service Disabled Veteran-Owned Small Business (SDVOSB) set-aside
  • SDVOSB sole-source
  • Emerging Small Business set-aside
  • Very Small Business set-aside
  • Reserved for Small Businesses ($2501 to $100,000)
  • Total Small Business set-aside

Bechtel Marine Propulsion Corporation achieves the top spot on the unrestricted competition list, with close to $2.3 billion in contract dollars for FY07 to FY11 and nearly 14% of the market share. The Boeing Company landed $1.0 billion in contract dollars with TRW earning over $729 million. Raytheon Systems and Lockheed Martin Corporation round out the top five with $690.1 and $687.9 million, respectively. Four additional firms, Mcdonnell Douglas, Northrop Grumman Systems, Saic and Sherikon, each topped $200 million in contracting dollars for the same time period.

PLEASE NOTE: as this is a listing by Company name, rather than PARENT company, some companies may have more than one ranking, which may not be reflected in the chart below.

Top 10 NAICS 541712 Contractors by % of Total Market for FY07 through FY11 - All Acquisition Strategies

Source: epipeline's Contract History Plus*

The combined contract spending for contracts awarded under "restricted competition," as outlined above, totaled over $2.42 billion for FY07 through FY11. Intelligent Software Solutions Inc takes the top spot, with reported spending of over $138 million for this period, or 5.72% of market share. DMD LLC also secured over $134.6 million in contracting dollars for this time period. Two other firms in the top ten, Eoir Technologies Inc and Fibertek Inc, also exceeded $100 million in reported spending for NAICS 541712.

PLEASE NOTE: as this is a listing by Company name, rather than PARENT company, some companies may have more than one ranking, which may not reflected in the chart below.

Top 10 NAICS 541712 Contractors by % of Total Market for FY07 through FY11 - Restricted Competition

Source: epipeline's Contract History Plus*

HOW ARE THESE CONTRACTS PROCURED?

Over 82% of contract spending reported for the FY07 through FY11 timeframe under NAICS 541712 used full and open (unrestricted aka "N/A") competition. This equated to over $18 billion. Contracts that did not indicate their acquisition strategy (which means they could represent any acquisition strategy) reported contract spending of more than $30 million. Contracts that were small business set-aside reported spending of over $3.7 billion. The combined value of contracts representing all other acquisition strategies was nearly $211.6 million, or approximately .95% of the market.

Acquisition Breakout under NAICS 541712 for FY07 through FY11

Source: epipeline's Contract History Plus*

WHERE ARE THESE CONTRACTS PERFORMED?

These contracts are being performed across the continental United States and abroad. The 50 states plus Washington, DC have reported spending for the FY07 through FY11 period of $21.6 billion and contracts for locations outside the United States (or unlisted) totaled approximately $601 million.

The highest total of reported contract spending is reported for California, with $3.1 billion. Virginia ($2.9 billion) and Pennsylvania ($2.7 billion) took the second and third spots. Together, the top five states represent 56.32% of market under NAICS 541712. Besides those in the top ten, an additional 8 states reported at least $200 million for NAICS 541712 during this time period.

Contract Place of Performance under NAICS 541712 for FY07 through January 2011

Source: epipeline's Contract History Plus*

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