DoD's $88M Torpedo Development Contract with Penn State Faces Scrutiny for Lack of Competition
Contract Overview
Contract Amount: $88,238,384 ($88.2M)
Contractor: THE Pennsylvania State University
Awarding Agency: Department of Defense
Start Date: 2013-01-31
End Date: 2017-03-31
Contract Duration: 1,520 days
Daily Burn Rate: $58.1K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: COMMON VERY LIGHT WEIGHT TORPEDO EDM 2 DEVELOPMENT FOR FY13 AND FY 14
Place of Performance
Location: STATE COLLEGE, CENTRE County, PENNSYLVANIA, 16804
Plain-Language Summary
Department of Defense obligated $88.2 million to THE PENNSYLVANIA STATE UNIVERSITY for work described as: COMMON VERY LIGHT WEIGHT TORPEDO EDM 2 DEVELOPMENT FOR FY13 AND FY 14 Key points: 1. Significant investment in advanced torpedo technology development. 2. Sole-source award to Penn State raises questions about competitive pricing. 3. Potential for higher costs due to limited market engagement. 4. R&D sector spending benchmark analysis needed for fair comparison.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee structure, combined with a lack of competition, makes a direct pricing assessment difficult. Without competitive bids, it's hard to determine if $88.2M represents fair market value for the research and development services provided.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded on a sole-source basis, indicating no other vendors were considered. This significantly limits price discovery and potentially leads to inflated costs as there is no competitive pressure to offer the best value.
Taxpayer Impact: Taxpayers may be overpaying due to the absence of a competitive bidding process, as the government did not explore alternative, potentially more cost-effective, solutions.
Public Impact
Advanced defense technology development funded by taxpayers. Potential for cost overruns impacting future defense budgets. Lack of transparency in the procurement process.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of competition
- Long contract duration
Positive Signals
- Development of critical defense technology
- Award to a research institution
Sector Analysis
This contract falls under Research and Development in Physical, Engineering, and Life Sciences. Spending in this sector is often characterized by high innovation but also significant cost variability and the need for specialized expertise, making competitive benchmarking challenging.
Small Business Impact
The data does not indicate any specific provisions or awards made to small businesses under this contract. The sole-source nature of the award further suggests limited opportunities for small business participation.
Oversight & Accountability
The sole-source award and cost-plus contract type warrant close oversight to ensure funds are used efficiently and effectively. Robust monitoring is crucial to validate costs and deliverables throughout the contract's lifecycle.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- Cost-plus contract type
- Potential for cost overruns
- Limited transparency
- Long contract duration
Tags
research-and-development-in-the-physical, department-of-defense, pa, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $88.2 million to THE PENNSYLVANIA STATE UNIVERSITY. COMMON VERY LIGHT WEIGHT TORPEDO EDM 2 DEVELOPMENT FOR FY13 AND FY 14
Who is the contractor on this award?
The obligated recipient is THE PENNSYLVANIA STATE UNIVERSITY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $88.2 million.
What is the period of performance?
Start: 2013-01-31. End: 2017-03-31.
What is the justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?
The justification for a sole-source award typically involves unique capabilities, critical needs, or lack of viable alternatives. Without further documentation, it's unclear if other qualified entities were assessed or if specific circumstances necessitated bypassing the standard competitive procurement process. This lack of competition raises concerns about potential cost inefficiencies.
How does the cost-plus fixed fee structure ensure cost control and value for money in this R&D context?
Cost-plus fixed fee contracts aim to incentivize efficiency by allowing the contractor to retain a portion of any cost savings below the target. However, in R&D, defining 'cost' and 'efficiency' can be complex. Close monitoring of expenditures and deliverables is essential to ensure the fixed fee remains reasonable and the overall cost represents value.
What are the key performance indicators and milestones for this torpedo development, and how will their achievement be measured?
Effective oversight requires clearly defined milestones and measurable performance indicators for the torpedo's development. The government should have a robust system for tracking progress against these benchmarks, ensuring that the research yields the intended technological advancements and meets the specified requirements within the allocated budget.
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 › DEFENSE (OTHER) R&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: 408 OLD MAIN, UNIVERSITY PARK, PA, 16802
Business Categories: Category Business, Corporate Entity Tax Exempt, Educational Institution, Higher Education, Nonprofit Organization, Not Designated a Small Business, Higher Education (Public), Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $93,217,933
Exercised Options: $88,238,384
Current Obligation: $88,238,384
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0002412D6404
IDV Type: IDC
Timeline
Start Date: 2013-01-31
Current End Date: 2017-03-31
Potential End Date: 2017-03-31 00:00:00
Last Modified: 2023-01-25
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