DoD awards PSU $35.9M for MK 54 ALWT system engineering and testing through 2025

Contract Overview

Contract Amount: $35,880,194 ($35.9M)

Contractor: THE Pennsylvania State University

Awarding Agency: Department of Defense

Start Date: 2022-06-01

End Date: 2025-05-31

Contract Duration: 1,095 days

Daily Burn Rate: $32.8K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: MK 54 MOD 2 ADVANCED LIGHTWEIGHT TOREPO (ALWT) SYSTEM ENGINEERING AND TESTING (FY22-FY25)

Place of Performance

Location: UNIVERSITY PARK, CENTRE County, PENNSYLVANIA, 16802

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $35.9 million to THE PENNSYLVANIA STATE UNIVERSITY for work described as: MK 54 MOD 2 ADVANCED LIGHTWEIGHT TOREPO (ALWT) SYSTEM ENGINEERING AND TESTING (FY22-FY25) Key points: 1. Contract awarded to a single research institution, raising questions about competition. 2. Focus on system engineering and testing suggests a critical phase for the weapon system. 3. The contract duration of three years indicates a sustained need for these services. 4. Research and Development in physical, engineering, and life sciences is a key sector for innovation. 5. The Pennsylvania State University's role highlights academic-industrial partnerships in defense. 6. Cost-plus-fixed-fee contract type may incentivize cost overruns if not closely monitored.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable system engineering contracts. The cost-plus-fixed-fee structure requires careful oversight to ensure costs remain reasonable. Given the specialized nature of advanced lightweight torpedo systems, the pricing may reflect unique expertise and development costs. However, the lack of competition limits the ability to assess if the price represents the best value achievable in a competitive market.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of the Navy did not solicit bids from multiple offerors. This approach is typically used when a specific entity possesses unique capabilities or when urgency dictates. The absence of competition means there was no direct price comparison or negotiation against other potential providers, which could lead to a less favorable price for the government.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competitive pressures to secure the lowest possible price, potentially resulting in higher costs for taxpayers.

Public Impact

The Department of the Navy benefits from specialized engineering and testing services for a critical defense asset. The contract supports the development and refinement of the MK 54 Advanced Lightweight Torpedo (ALWT) system. The geographic impact is primarily centered in Pennsylvania, where The Pennsylvania State University is located. The contract likely supports a workforce of researchers, engineers, and technicians at the university.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings.
Cost-plus-fixed-fee contract type can lead to cost overruns if not managed stringently.
Lack of transparency in the justification for sole-source award.

Positive Signals

Award to a reputable research institution with established expertise.
Focus on critical defense system development and testing.
Long-term contract provides stability for research and development efforts.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The defense industry heavily relies on R&D to maintain technological superiority. The market for specialized defense system engineering and testing is often characterized by a limited number of highly qualified contractors, particularly for advanced weapon systems like torpedoes. Comparable spending in this niche R&D area can vary significantly based on the complexity and maturity of the technology.

Small Business Impact

This contract does not appear to involve small business set-asides. The award is made directly to a large research institution. There is no explicit information regarding subcontracting opportunities for small businesses within this award, which could limit their participation in this specific defense R&D effort.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Navy. As a cost-plus-fixed-fee contract, rigorous financial oversight and auditing will be crucial to ensure costs are reasonable and allocable. Transparency regarding the justification for the sole-source award and ongoing performance reporting will be key accountability measures. The Inspector General's office for the Department of Defense may conduct audits or investigations as deemed necessary.

Related Government Programs

MK 54 Torpedo Program
Naval Air Systems Command (NAVAIR) Contracts
Department of Defense Research and Development Funding
University Research Partnerships

Risk Flags

Sole-source award may limit competition and potentially increase costs.
Cost-plus-fixed-fee contract requires robust oversight to manage costs effectively.
Lack of detailed performance metrics in the provided data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.9 million to THE PENNSYLVANIA STATE UNIVERSITY. MK 54 MOD 2 ADVANCED LIGHTWEIGHT TOREPO (ALWT) SYSTEM ENGINEERING AND TESTING (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 $35.9 million.

What is the period of performance?

Start: 2022-06-01. End: 2025-05-31.

What is the specific justification for awarding this contract on a sole-source basis to The Pennsylvania State University?

The provided data does not explicitly state the justification for the sole-source award. Typically, sole-source contracts are awarded when only one responsible source is available or capable of meeting the agency's needs. This could be due to unique technical expertise, proprietary technology, or urgent requirements where competition is not feasible. A detailed justification document, often required by federal acquisition regulations, would outline the specific reasons. Without this document, it's difficult to definitively assess the necessity of the sole-source approach and its potential impact on value for money.

How does the cost-plus-fixed-fee (CPFF) structure influence cost control and contractor incentives for this contract?

The Cost-Plus-Fixed-Fee (CPFF) contract type means the contractor (The Pennsylvania State University) is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used for research and development where the scope of work may evolve or is not precisely defined at the outset. While the fixed fee provides a ceiling on profit, it can incentivize contractors to incur higher costs to justify the fee, potentially leading to cost overruns if not rigorously monitored. Effective oversight by the Department of the Navy is critical to scrutinize allowable costs and ensure the project remains within budget expectations.

What is the historical spending pattern for similar MK 54 ALWT system engineering and testing services, and how does this award compare?

Historical spending data for this specific system engineering and testing task for the MK 54 ALWT is not provided. However, the current award of approximately $35.9 million over three years (FY22-FY25) suggests a significant investment in the system's development and validation. To compare, one would need to examine past contracts for similar phases of the MK 54 program or comparable advanced lightweight torpedo development projects. Factors such as contract type, duration, scope of work, and the number of bidders in historical procurements would be essential for a meaningful comparison of value and pricing.

What are the key performance indicators (KPIs) or milestones associated with this contract, and how will performance be measured?

The provided data does not specify the key performance indicators (KPIs) or milestones for this contract. For system engineering and testing contracts, typical KPIs might include successful completion of design reviews, achievement of specific performance parameters for the torpedo system, timely delivery of test reports, and adherence to testing protocols. Performance measurement would likely involve regular progress reports from The Pennsylvania State University, technical reviews by the Department of the Navy, and evaluation against defined contract deliverables and objectives. The effectiveness of the oversight will depend on the clarity and measurability of these performance criteria.

What is the track record of The Pennsylvania State University in performing similar defense research and development contracts, particularly for weapon systems?

The Pennsylvania State University has a well-established reputation and extensive experience in conducting research and development for various government agencies, including the Department of Defense. They operate numerous research centers and institutes, many of which focus on engineering, materials science, and defense-related technologies. While specific details on their past performance on the MK 54 ALWT program are not in the provided data, their broad expertise in engineering disciplines and their history of securing and executing large-scale government R&D contracts suggest a strong capability to undertake this work. A deeper dive into their contract performance history with the DoD would provide more granular insights.

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: $35,880,195

Exercised Options: $35,880,195

Current Obligation: $35,880,194

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