DoD's $54.3M R&D contract with Penn State University awarded without competition

Contract Overview

Contract Amount: $54,297,000 ($54.3M)

Contractor: THE Pennsylvania State University

Awarding Agency: Department of Defense

Start Date: 2003-01-03

End Date: 2006-03-13

Contract Duration: 1,165 days

Daily Burn Rate: $46.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Place of Performance

Location: STATE COLLEGE, CENTRE County, PENNSYLVANIA, 16804

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $54.3 million to THE PENNSYLVANIA STATE UNIVERSITY for work described as: Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, indicating potential for cost overruns. 2. Lack of competition raises concerns about price discovery and potential for inflated costs. 3. The contract duration of over 3 years suggests a significant, long-term research effort. 4. Research and Development in Physical, Engineering, and Life Sciences is a critical but often complex area to benchmark. 5. The contract was awarded to a single entity, limiting opportunities for broader contractor engagement. 6. The fixed fee component may not fully incentivize cost efficiency in a research environment.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its R&D nature and lack of competition. The cost-plus-fixed-fee structure, while common for research, can lead to higher final costs compared to fixed-price contracts. Without competitive bids, it's difficult to ascertain if the fixed fee represents a fair market rate for the services rendered. The total award amount of $54.3 million over approximately three years suggests a substantial investment, but its true value-for-money is obscured by the absence of comparative pricing data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. The Department of the Navy likely determined that The Pennsylvania State University was the only entity capable of performing the required research and development. This lack of competition means there were no other bidders to compare against, and the government did not benefit from a competitive bidding process to drive down prices or encourage innovation among multiple potential contractors.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without competing offers, the government lacks assurance that the negotiated price reflects the best possible value.

Public Impact

The primary beneficiary is The Pennsylvania State University, which receives funding for advanced research. The contract supports research and development in physical, engineering, and life sciences, potentially leading to technological advancements. The geographic impact is concentrated in Pennsylvania, where the university is located. The contract likely involves highly skilled researchers and technical staff, contributing to the specialized workforce in these scientific fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Cost-plus-fixed-fee contracts can incentivize spending without strict cost controls.
The sole-source nature limits opportunities for other research institutions and businesses.
R&D contracts can be prone to scope creep and cost overruns.

Positive Signals

Awarded to a reputable research institution with established expertise.
Supports critical research and development in important scientific fields.
The fixed fee provides some level of cost certainty for the contractor's effort.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. This is a broad category encompassing fundamental and applied research. The market for such services is often specialized, with a limited number of institutions possessing the necessary expertise and facilities. Government spending in this area is crucial for driving innovation and maintaining technological superiority, but it also presents challenges in terms of oversight and value assessment due to the inherent uncertainties in research outcomes.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there information suggesting significant subcontracting opportunities for small businesses. The award to a large university suggests the primary focus is on specialized research capabilities rather than broad market engagement. This contract is unlikely to have a direct positive impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and technical representatives within the Department of the Navy. Given the R&D nature and sole-source award, oversight would focus on monitoring research progress, adherence to the statement of work, and managing the cost-plus-fixed-fee budget. Transparency may be limited due to the proprietary nature of research findings and the lack of competitive disclosures. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Research and Development Programs
National Science Foundation Grants
University Research Partnerships
Advanced Technology Development Contracts

Risk Flags

Sole-source award lacks competitive pricing.
Cost-plus-fixed-fee structure may reduce cost control incentives.
R&D contracts carry inherent uncertainty of outcome.
Long contract duration increases risk exposure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $54.3 million to THE PENNSYLVANIA STATE UNIVERSITY. See the official description on USAspending.

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 $54.3 million.

What is the period of performance?

Start: 2003-01-03. End: 2006-03-13.

What specific research objectives were outlined in this contract?

The provided data does not detail the specific research objectives. However, the North American Industry Classification System (NAICS) code 541710 indicates 'Research and Development in the Physical, Engineering, and Life Sciences.' This broad category suggests the research could span areas such as materials science, aerospace engineering, biotechnology, or advanced computing, depending on the specific needs of the Department of the Navy at the time of the award. Further details would typically be found in the contract's statement of work, which is not publicly available in this dataset.

How does the $54.3 million cost compare to similar R&D contracts awarded by the Navy?

Direct comparison is difficult without knowing the specific research area and duration. However, $54.3 million over approximately three years for R&D is a substantial sum. The Navy awards numerous R&D contracts, ranging from small, targeted projects to large, multi-year initiatives. Given this contract's sole-source nature and its focus on physical, engineering, and life sciences, it likely represents a significant investment in a particular technological advancement or scientific understanding deemed critical by the Navy. Benchmarking would require identifying contracts with similar scope, complexity, and duration, which is challenging with the limited data provided.

What are the risks associated with a sole-source, cost-plus-fixed-fee R&D contract?

Sole-source contracts eliminate competitive pressure, potentially leading to higher prices than if multiple bids were solicited. Cost-plus-fixed-fee (CPFF) contracts, while common for R&D where exact costs are uncertain, carry the risk that the contractor may not be strongly incentivized to control costs, as the government agrees to cover all allowable costs plus a fixed fee. This structure can lead to cost overruns if not meticulously managed and overseen. For R&D, there's also the inherent risk that the research may not yield the desired outcomes, regardless of cost.

What is The Pennsylvania State University's track record with federal R&D contracts?

The Pennsylvania State University (Penn State) has a long and extensive history of securing federal research grants and contracts across various agencies, including the Department of Defense, NASA, and the National Science Foundation. It is consistently ranked among the top universities for federal R&D expenditures. Its track record generally indicates strong capabilities in numerous scientific and engineering disciplines, making it a frequent recipient of large, complex research awards. This specific contract aligns with its established strengths in physical, engineering, and life sciences research.

How does the duration of this contract (1165 days) impact its overall value assessment?

A duration of 1165 days (approximately 3.2 years) for a $54.3 million R&D contract suggests a significant, long-term research undertaking. Longer durations can allow for deeper exploration of complex scientific problems and the development of more sophisticated technologies. However, they also increase the potential for cost escalation and the risk that research objectives may need to adapt to evolving scientific landscapes or strategic priorities. For taxpayers, a longer duration necessitates sustained oversight to ensure continued alignment with government goals and efficient use of funds throughout the project lifecycle.

What does the 'Research and Development in the Physical, Engineering, and Life Sciences' category entail in terms of potential outcomes?

This broad category encompasses a wide array of potential outcomes. In physical sciences, it could involve advancements in materials, energy, or fundamental physics. Engineering R&D might lead to new designs, processes, or systems for defense applications, infrastructure, or technology. Life sciences R&D could focus on medical countermeasures, biological understanding for defense purposes, or environmental science. The specific outcomes are dictated by the contract's statement of work, but generally aim to push the boundaries of scientific knowledge and technological capability relevant to national security or other government missions.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 408 OLD MAIN, UNIVERSITY PARK, PA, 16802

Business Categories: Category Business, Educational Institution, Higher Education, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: N0002402D6604

IDV Type: IDC

Timeline