Navy's $30.7M Unmanned Maritime Systems contract with Penn State faces scrutiny over competition and value

Contract Overview

Contract Amount: $30,698,104 ($30.7M)

Contractor: THE Pennsylvania State University

Awarding Agency: Department of Defense

Start Date: 2021-12-02

End Date: 2026-09-30

Contract Duration: 1,763 days

Daily Burn Rate: $17.4K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: ARL/PSU - FY2018 - FY 2023 REQUIREMENT - PMS 406 UNMANNED MARITIME SYSTEMS DEVELOPMENT AND SYSTEMS ENGINEERING SUPPORT FY22-FY25

Place of Performance

Location: UNIVERSITY PARK, CENTRE County, PENNSYLVANIA, 16802

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $30.7 million to THE PENNSYLVANIA STATE UNIVERSITY for work described as: ARL/PSU - FY2018 - FY 2023 REQUIREMENT - PMS 406 UNMANNED MARITIME SYSTEMS DEVELOPMENT AND SYSTEMS ENGINEERING SUPPORT FY22-FY25 Key points: 1. The contract awarded to The Pennsylvania State University for $30.7M supports Unmanned Maritime Systems Development. 2. Lack of competition raises concerns about potential overpricing and limited innovation. 3. The 'Research and Development in the Physical, Engineering, and Life Sciences' sector is crucial for defense modernization. 4. Oversight is needed to ensure taxpayer funds are used efficiently for critical R&D.

Value Assessment

Rating: questionable

The contract's Cost Plus Fixed Fee structure, combined with a lack of competition, makes a definitive pricing assessment difficult. Without benchmarks from similar contracts or competitive bids, it's hard to determine if the $30.7M represents fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for the government as there is no market pressure to offer competitive pricing.

Taxpayer Impact: The lack of competition in this sole-source award may result in taxpayers paying a premium for research and development services, as alternative, potentially more cost-effective, providers were not considered.

Public Impact

Taxpayers may be overpaying for critical R&D due to the absence of competitive bidding. The Navy's reliance on a single source for unmanned maritime systems development could stifle innovation. The long-term implications for national security if this R&D is not cost-effectively executed are significant.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
Cost-plus contract type can incentivize higher spending.
Lack of clear performance metrics for R&D can obscure value.
Potential for cost overruns without competitive pressure.

Positive Signals

Supports critical defense technology development (unmanned maritime systems).
Long-term contract provides stability for research continuity.
Penn State is a reputable research institution.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on advanced physical and engineering sciences. Spending in this area is critical for maintaining technological superiority, but often involves complex, long-term projects where cost control and competition are challenging.

Small Business Impact

The contract data indicates no specific set-aside for small businesses. Given the sole-source nature and the focus on specialized R&D, it is unlikely that small businesses were significantly involved in this particular award, potentially missing opportunities for their participation.

Oversight & Accountability

The sole-source nature of this award warrants increased oversight to ensure the Department of the Navy is receiving fair value and that the research objectives are being met efficiently. Accountability for cost management and research outcomes is crucial.

Related Government Programs

Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and 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 on value for money
No small business participation noted

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.7 million to THE PENNSYLVANIA STATE UNIVERSITY. ARL/PSU - FY2018 - FY 2023 REQUIREMENT - PMS 406 UNMANNED MARITIME SYSTEMS DEVELOPMENT AND SYSTEMS ENGINEERING SUPPORT FY22-FY25

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 $30.7 million.

What is the period of performance?

Start: 2021-12-02. End: 2026-09-30.

What specific justification was provided for awarding this contract on a sole-source basis, and how does it align with federal procurement regulations for non-competitive awards?

The provided data does not include the specific justification for the sole-source award. Federal regulations typically require extensive documentation and justification for non-competitive procurements, often citing unique capabilities, urgent needs, or lack of market availability. A thorough review of the contract file would be necessary to ascertain the official rationale and its compliance.

How will the Department of the Navy ensure cost control and effective research outcomes under a Cost Plus Fixed Fee contract with a single provider, especially given the absence of competitive pressur

Effective oversight mechanisms, including rigorous monitoring of expenditures, regular progress reviews, and clearly defined milestones, are essential. The government should establish robust performance metrics and potentially utilize independent technical reviews to validate progress and ensure the fixed fee remains appropriate relative to the work performed and achieved outcomes.

What is the long-term strategy for developing unmanned maritime systems, and does this sole-source contract represent a sustainable approach to acquiring these critical capabilities?

This contract appears to address a specific R&D requirement. A comprehensive long-term strategy should involve periodic re-evaluation of the market and potential for competition as technologies mature and capabilities evolve. Relying solely on a single source for extended periods may not be sustainable and could limit future innovation and cost-effectiveness.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 201 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: $34,228,105

Exercised Options: $34,228,105

Current Obligation: $30,698,104

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002418D6401

IDV Type: IDC

Timeline