Rand Corp. landed one of the biggest government contracts in its nearly 70-year history last week, a five-year deal worth as much as $495 million to set up a policy analysis center for the U.S. Department of Homeland Security.
The contract will fund the establishment of the Homeland Security Operational Analysis Center, which will do research and consult on topics such as terrorism, border security, immigration enforcement, and cybersecurity.
Rand reported $310 million in revenue last year, according to Rand spokesman Warren Robak. That means the DHS contract will add about one-third more on average to the Santa Monica think tank’s annual revenue and could add significantly to its 1,900-employee base.
It isn’t a surprise that Rand landed this large contract, said Tom Medvetz, an associate professor of sociology at UC San Diego and author of “Think Tanks in America.”
“This is what they do. They are in the business of doing these quasi government analyses,” he said, noting that the contract is good for them because it guarantees that the organization is relevant and well-funded for the next five years.
Rand is the largest think tank in the world ranked by both staffing and revenue, and has been establishing and running federally funded research and development centers (FFRDC) since its inception. It now operates four such centers, including Rand Arroyo Center, an Army think tank; and Rand Project Air Force, an Air Force think tank. Such centers have represented about half of the nonprofit’s revenue historically, Robak said.
In addition to its Santa Monica base, Rand has offices in Pittsburgh and Washington, D.C., and the work for the new Homeland Security center will be spread among its offices, he said.
The DHS contract is for a maximum of $495 million in services over five years, but could end up being worth less depending how often the department utilizes Rand’s services, said Scott Randels, DHS director of FFRDC program management office. He also acknowledged that many government agencies choose to continue their FFRDC research and consulting relationships for years beyond the initial contract.
Rand was formed in 1948 as a think-tank offshoot of the Douglas Aircraft Co. and funded by a unit of the Army. In fact, where Rand ends and the government begins is sometimes blurry, said Medvetz.
“Rand is made up of a lot of the people who worked in the government themselves: ex-bureaucrats, ex-Pentagon officials, ex-high-level cabinet officials,” he said, noting that close ties to various bureaucracies have helped it win contracts. “They don’t have to aggressively seek publicity; they don’t have to angle to win over the politicians; they don’t have to win the favor of the conservative movement or any other movement, because they have this built-in relevance that’s based on these contract relationships with the government.”