DoD's $20.3M R&D contract with Duke University shows mixed value and limited competition insights

Contract Overview

Contract Amount: $20,342,451 ($20.3M)

Contractor: Duke University

Awarding Agency: Department of Defense

Start Date: 2009-09-10

End Date: 2014-06-30

Contract Duration: 1,754 days

Daily Burn Rate: $11.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: SERVICES IAW ATTACHED SOW

Place of Performance

Location: DURHAM, DURHAM County, NORTH CAROLINA, 27708

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $20.3 million to DUKE UNIVERSITY for work described as: SERVICES IAW ATTACHED SOW Key points: 1. Contract awarded for research and development services, indicating a focus on innovation. 2. The contract's duration of 1754 days suggests a long-term commitment to the research area. 3. Awarded under full and open competition, but only two bids were received, raising questions about market engagement. 4. The cost-plus-fixed-fee pricing structure can incentivize cost overruns if not closely monitored. 5. The specific research area (NAICS 541712) is critical for national security and technological advancement. 6. Geographic location in North Carolina may offer local economic benefits and access to regional talent pools.

Value Assessment

Rating: fair

Benchmarking the value of this research and development contract is challenging without specific performance metrics and deliverables. The $20.3 million award over approximately 4.8 years averages around $4.2 million annually. While Duke University is a reputable research institution, the lack of detailed cost breakdowns and performance data makes a definitive value assessment difficult. The cost-plus-fixed-fee structure necessitates rigorous oversight to ensure costs remain reasonable and aligned with research objectives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting an intention to solicit bids from all interested parties. However, only two offers were received. This limited number of bidders, despite the broad solicitation, could indicate a niche research area, high barriers to entry for potential competitors, or insufficient outreach. The limited competition may have constrained price discovery and potentially led to a higher-than-optimal price for the government.

Taxpayer Impact: With only two bidders, taxpayers may not have benefited from the full spectrum of competitive pricing that a more robust bidding process could have yielded. This could translate to a less efficient use of taxpayer funds.

Public Impact

The primary beneficiary is the Department of Defense, which gains access to specialized research and development capabilities. The contract supports advancements in physical, engineering, and life sciences, potentially leading to new technologies or improved defense systems. Research activities conducted in North Carolina could foster local scientific talent and contribute to the regional innovation ecosystem. The contract may indirectly benefit the scientific community through knowledge dissemination, although specific publication rights are not detailed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) despite full and open solicitation may indicate potential market inefficiencies or high entry barriers.
Cost-plus-fixed-fee contract type requires diligent oversight to prevent potential cost overruns and ensure value for money.
Lack of detailed performance metrics in the provided data makes it difficult to assess the effectiveness and efficiency of the R&D services.
The specific research outcomes and their direct impact on defense capabilities are not detailed, limiting transparency on program success.

Positive Signals

Award to a reputable research institution (Duke University) suggests a high likelihood of technical expertise and quality research.
The contract falls under a critical R&D category (NAICS 541712), indicating investment in areas vital for national security and technological progress.
Full and open competition, even with limited bids, provides a framework for potential future competition and market engagement.
The contract duration suggests a sustained effort and commitment to achieving specific research goals.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically NAICS code 541712, which covers research in physical, engineering, and life sciences (excluding biotechnology). This sector is characterized by innovation, long development cycles, and often high upfront investment. Federal spending in R&D is crucial for maintaining technological superiority and addressing national challenges. Comparable spending benchmarks would typically involve analyzing other R&D contracts awarded to universities or research institutions for similar scientific domains.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside (SS: false, SB: false). As this is a research and development contract awarded to a large university, the primary focus is likely on the institution's research capabilities rather than subcontracting opportunities for small businesses. There is no explicit information regarding subcontracting plans or their impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy, a component of the Department of Defense. The effectiveness of oversight depends on the agency's established procedures for monitoring cost-plus-fixed-fee contracts, including regular reviews of progress reports, financial expenditures, and adherence to the Statement of Work (SOW). Transparency is facilitated through contract databases, but detailed programmatic oversight information is typically internal. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Research and Development Programs
University Research Grants
National Science Foundation (NSF) Research Funding
Advanced Technology Development Contracts

Risk Flags

Limited Competition
Cost-Plus Contract Type
Long Contract Duration
Lack of Specific Performance Metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.3 million to DUKE UNIVERSITY. SERVICES IAW ATTACHED SOW

Who is the contractor on this award?

The obligated recipient is DUKE 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 $20.3 million.

What is the period of performance?

Start: 2009-09-10. End: 2014-06-30.

What was the specific research area and its importance to the Department of Defense?

The contract (NAICS 541712) focused on 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)'. While the exact research topic isn't specified, this broad category encompasses critical areas for defense, such as materials science, advanced manufacturing, energy systems, sensor technology, and human performance optimization. Investments in these areas are vital for maintaining a technological edge, developing next-generation military capabilities, and addressing evolving security threats. The Department of Defense relies on cutting-edge research to ensure its forces are equipped with the most advanced tools and knowledge.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other R&D contract types, and what are its implications?

The Cost Plus Fixed Fee (CPFF) structure is common for R&D contracts where the scope of work is not precisely defined at the outset, making it difficult to estimate costs accurately. Under CPFF, the contractor (Duke University) is reimbursed for allowable costs plus a predetermined fixed fee representing profit. This structure incentivizes the contractor to control costs, as the fee remains constant regardless of the final cost. However, it also requires robust government oversight to ensure costs are reasonable and necessary. Compared to fixed-price contracts, CPFF offers more flexibility for evolving research but carries a higher risk of cost overruns if not managed diligently. It differs from cost-plus-incentive-fee (CPIF) contracts, where the fee can be adjusted based on performance against targets.

What is the significance of only two bids being received for a 'full and open' competition?

Receiving only two bids for a contract solicited under 'full and open' competition suggests potential challenges in the market for this specific R&D service. Possible reasons include a highly specialized or niche research area requiring unique expertise, high barriers to entry (e.g., specialized facilities, personnel, or intellectual property), or perhaps insufficient outreach or awareness among potential bidders. While 'full and open' competition is the preferred method, a low number of bids can limit price discovery and potentially lead to less competitive pricing. It raises questions about whether the solicitation effectively reached all qualified sources or if the market itself is constrained.

What is the typical annual spending for R&D contracts of this nature, and how does this contract compare?

Annual spending on R&D contracts can vary significantly based on the specific scientific domain, the complexity of the research, and the agency's priorities. For contracts awarded to major research institutions like Duke University, annual values can range from a few million to tens of millions of dollars. This $20.3 million contract, spanning approximately 4.8 years, averages around $4.2 million per year. This annual figure appears to be within a reasonable range for significant, multi-year research endeavors funded by agencies like the Department of Defense, particularly when compared to other large-scale university research grants or contracts in specialized scientific fields.

What are the potential risks associated with a long-duration R&D contract like this?

Long-duration R&D contracts, such as this 1754-day (approx. 4.8 years) award, carry several potential risks. Firstly, the scientific landscape can evolve rapidly; research objectives defined at the start may become outdated or less relevant by the contract's end. Secondly, cost estimation becomes more challenging over extended periods, increasing the risk of budget overruns, especially with CPFF structures. Thirdly, maintaining consistent oversight and engagement from the government contracting team over several years can be difficult due to personnel turnover. Finally, there's a risk that the research may not yield the desired breakthroughs or practical applications within the allocated timeframe and budget.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › N – Health R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 334 N BUILDING RESEARCH DR, DUKE UNIVERSITY, DURHAM, NC, 04

Business Categories: Category Business, Corporate Entity Tax Exempt, Educational Institution, Federally Funded Research and Development Corp, Higher Education, Nonprofit Organization, Not Designated a Small Business, Higher Education (Private), Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $21,060,177

Exercised Options: $21,060,177

Current Obligation: $20,342,451

Contract Characteristics

Cost or Pricing Data: NO

Timeline