Penn State University awarded $43.5M R&D contract for deployable nodes by the Navy

Contract Overview

Contract Amount: $43,507,577 ($43.5M)

Contractor: THE Pennsylvania State University

Awarding Agency: Department of Defense

Start Date: 2023-09-07

End Date: 2026-09-06

Contract Duration: 1,095 days

Daily Burn Rate: $39.7K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: DEPOTDOGS (SAN DIEOG-DEPOT), BUILDING 585 DEPLOYABLE NODES

Place of Performance

Location: UNIVERSITY PARK, CENTRE County, PENNSYLVANIA, 16802

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $43.5 million to THE PENNSYLVANIA STATE UNIVERSITY for work described as: DEPOTDOGS (SAN DIEOG-DEPOT), BUILDING 585 DEPLOYABLE NODES Key points: 1. Contract awarded for research and development in physical, engineering, and life sciences. 2. The contract is a Cost Plus Fixed Fee type, indicating potential for cost overruns. 3. A duration of 1095 days suggests a long-term research commitment. 4. The contract was not competed, raising questions about price discovery and value. 5. The Pennsylvania State University is the sole contractor for this effort. 6. The contract falls under the R&D sector, specifically focusing on deployable nodes.

Value Assessment

Rating: questionable

The contract's value of $43.5 million for research and development is substantial. However, without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar contracts. The Cost Plus Fixed Fee structure means the government pays the contractor's costs plus a fixed fee, which can incentivize higher spending if not closely monitored. Further analysis of the fixed fee percentage and the projected costs would be necessary to fully assess value for money.

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 among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities or when circumstances do not permit full and open competition. The lack of competition means there was no opportunity for price negotiation based on multiple bids, potentially leading to a higher price than if it had been competed.

Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced likelihood of achieving the lowest possible price for the research and development services. Oversight is critical to ensure the fixed fee and cost reimbursement are reasonable and justified.

Public Impact

The Department of the Navy benefits from specialized research and development in deployable nodes. This contract supports advancements in physical, engineering, and life sciences research. The geographic impact is centered in Pennsylvania, where The Pennsylvania State University is located. The contract likely involves a workforce of researchers, engineers, and technical staff at the university.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to suboptimal pricing.
Cost Plus Fixed Fee contracts can incentivize higher costs if not managed effectively.
The specific nature of 'deployable nodes' requires further definition to assess its criticality and potential risks.

Positive Signals

The Pennsylvania State University is a reputable research institution.
The contract is for research and development, potentially leading to technological advancements.
The fixed fee component provides some level of cost predictability for the government.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically under NAICS code 541715 (Research and Development in the Physical, Engineering, and Life Sciences). This sector is characterized by innovation and the pursuit of new knowledge and technologies. The contract's focus on 'deployable nodes' suggests a need for advanced, potentially mobile, technological solutions. Comparable spending in this R&D sub-sector can vary widely depending on the specific research area and agency.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. The prime contractor is a large university. There is no explicit information provided regarding subcontracting plans for small businesses. Without this information, the direct impact on the small business ecosystem is unclear, but it suggests that opportunities for small businesses may be limited unless they are sought out as subcontractors by the prime.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy, specifically the Department of Defense. As a Cost Plus Fixed Fee contract, rigorous financial oversight and auditing of incurred costs will be crucial. Transparency regarding the research progress and expenditures should be maintained through regular reporting. The Inspector General of the Department of Defense would have jurisdiction for investigating any potential fraud, waste, or abuse.

Related Government Programs

Department of Defense Research and Development Contracts
Navy Science and Technology Programs
University Research Partnerships
Advanced Technology Development

Risk Flags

Sole-source award lacks competitive pricing.
Cost Plus Fixed Fee structure requires diligent oversight.
Research and Development contracts carry inherent uncertainty.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $43.5 million to THE PENNSYLVANIA STATE UNIVERSITY. DEPOTDOGS (SAN DIEOG-DEPOT), BUILDING 585 DEPLOYABLE NODES

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 $43.5 million.

What is the period of performance?

Start: 2023-09-07. End: 2026-09-06.

What is the specific nature and intended application of the 'deployable nodes' being researched?

The provided data does not specify the exact nature or intended application of the 'deployable nodes.' This term could refer to a wide range of technologies, from portable communication systems and sensor networks to modular computing units or even physical infrastructure components that can be rapidly deployed. Understanding the specific function and operational environment for these nodes is critical for assessing the contract's technical objectives, potential risks, and the relevance of the research to the Department of the Navy's mission. Further details would likely be found in the contract's statement of work or technical exhibits.

What is the typical profit margin (fixed fee) for Cost Plus Fixed Fee R&D contracts of this size and nature within the Department of Defense?

The typical profit margin, or fixed fee, for Cost Plus Fixed Fee (CPFF) Research and Development (R&D) contracts within the Department of Defense can vary significantly based on factors such as contract complexity, risk, duration, and the specific agency. Historically, fixed fees for CPFF contracts have ranged from around 7% to 15% of the estimated cost. For complex R&D efforts, the fee might be on the higher end to compensate for the inherent uncertainties and specialized expertise required. Without the specific fee percentage negotiated for this $43.5 million contract with The Pennsylvania State University, it's impossible to provide a precise benchmark. However, a fee within the typical range would be expected, and any deviation significantly above or below this range would warrant further scrutiny.

Has The Pennsylvania State University previously been awarded similar sole-source R&D contracts by the Department of Defense, and what has been their performance record?

The provided data does not contain historical performance information for The Pennsylvania State University regarding previous sole-source R&D contracts with the Department of Defense. To assess their track record, one would need to consult contract databases (like SAM.gov or FPDS) for past awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any documented issues or successes. Universities are common recipients of federal R&D funding due to their research capabilities. A thorough review would involve examining the scope, value, and outcomes of prior relevant contracts to gauge their reliability and effectiveness as a contractor in similar research domains.

What are the key performance indicators (KPIs) or milestones defined in this contract to measure the success of the research and development effort?

The provided summary data does not include specific Key Performance Indicators (KPIs) or milestones for this contract. In a Cost Plus Fixed Fee R&D contract, success is typically measured against the achievement of defined research objectives, the delivery of prototypes or reports, adherence to project timelines, and the successful demonstration of capabilities. The specific KPIs would be detailed in the contract's Statement of Work (SOW) or associated technical exhibits. These would likely include technical performance metrics related to the 'deployable nodes,' progress reports, and potentially peer-reviewed publications or presentations. Regular reviews by the contracting officer's representative (COR) would track progress against these defined milestones.

How does the $43.5 million total contract value compare to historical Navy spending on similar R&D initiatives for deployable technologies?

The provided data does not offer historical spending figures for the Navy on similar R&D initiatives for deployable technologies, making a direct comparison difficult. The $43.5 million value is substantial and suggests a significant research undertaking. To contextualize this amount, one would need to analyze historical contract awards for R&D related to tactical hardware, communication systems, or other 'deployable' assets within the Navy or Department of Defense. Factors such as the technological maturity of the area, the number of research institutions involved in similar efforts, and the strategic importance of deployable technologies to naval operations would influence spending levels. Without comparative data, it's challenging to determine if this contract represents a typical, high, or low investment for such research.

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: $50,000,000

Exercised Options: $50,000,000

Current Obligation: $43,507,577

Actual Outlays: $3,886,664

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