Navy's CRAW Program Awarded $31.8M to Penn State for R&D, Lacking Competition

Contract Overview

Contract Amount: $31,829,812 ($31.8M)

Contractor: THE Pennsylvania State University

Awarding Agency: Department of Defense

Start Date: 2024-09-09

End Date: 2027-09-08

Contract Duration: 1,094 days

Daily Burn Rate: $29.1K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: COMPACT RAPID ATTACK WEAPON (CRAW) PROGRAM OF RECORD (POR) FY25-FY27

Place of Performance

Location: UNIVERSITY PARK, CENTRE County, PENNSYLVANIA, 16802

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $31.8 million to THE PENNSYLVANIA STATE UNIVERSITY for work described as: COMPACT RAPID ATTACK WEAPON (CRAW) PROGRAM OF RECORD (POR) FY25-FY27 Key points: 1. The Pennsylvania State University secured a $31.8M contract for the CRAW Program of Record. 2. This award is for Research and Development in Physical, Engineering, and Life Sciences. 3. The contract was not competed, raising questions about price discovery and value. 4. The Department of the Navy is the awarding agency, with the contract spanning FY25-FY27.

Value Assessment

Rating: questionable

The contract is Cost Plus Fixed Fee, which can lead to cost overruns if not managed tightly. Without competitive bidding, it's difficult to benchmark pricing against similar R&D efforts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

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

Taxpayer Impact: The lack of competition may result in taxpayers paying more than necessary for the research and development services.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. The specific impact on national defense capabilities from this R&D is not detailed. Future contract awards for this program may continue to lack competition.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost-plus contract type
Limited transparency on R&D outcomes

Positive Signals

Award to a known research institution
Clear program of record identified

Sector Analysis

This contract falls under the Research and Development sector, specifically NAICS 541715. Spending in this area is crucial for technological advancement but requires careful oversight to ensure value for money, especially when not competed.

Small Business Impact

There is no indication that small businesses were involved in this sole-source award, suggesting a missed opportunity for small business participation.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure the fixed fee is reasonable and that the research objectives are met efficiently and effectively.

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

Sole-source award lacks competition.
Cost-plus contract type can lead to cost overruns.
Potential for taxpayer overpayment.
Limited transparency on R&D value.
No small business participation indicated.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.8 million to THE PENNSYLVANIA STATE UNIVERSITY. COMPACT RAPID ATTACK WEAPON (CRAW) PROGRAM OF RECORD (POR) FY25-FY27

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 $31.8 million.

What is the period of performance?

Start: 2024-09-09. End: 2027-09-08.

What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?

The justification for a sole-source award typically involves unique capabilities, critical need, or lack of available alternatives. Without a competitive process, the Department of the Navy must independently verify that Penn State's proposed costs are fair and reasonable through detailed audits and negotiations. This often involves reviewing their cost accounting practices and comparing them to industry benchmarks where possible.

How will the effectiveness and impact of the CRAW Program of Record be measured, given the lack of competitive benchmarks?

Effectiveness will be measured against pre-defined technical milestones and performance metrics outlined in the contract. The Navy will likely rely on program management reviews, technical assessments, and independent verification of deliverables. While competitive benchmarks are absent, the fixed fee component provides some incentive for the contractor to manage costs efficiently to maximize their profit margin.

What is the long-term strategy for the CRAW program, and will future phases involve competitive solicitations to ensure ongoing value?

The long-term strategy for the CRAW program should ideally include plans for future competition, especially if the technology matures or alternative solutions emerge. The Department of the Navy should assess the market periodically to identify potential competitors. If the program remains critical and unique to Penn State's capabilities, future sole-source justifications will need to be robustly documented and approved.

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: $87,015,475

Exercised Options: $87,015,475

Current Obligation: $31,829,812

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