DOE Awards $1.1B for Multi-Program Physical Research, Including Rare Earths, to Iowa State University

Contract Overview

Contract Amount: $1,099,562,782 ($1.1B)

Contractor: Iowa State University of Science and Technology

Awarding Agency: Department of Energy

Start Date: 2006-12-04

End Date: 2026-12-31

Contract Duration: 7,332 days

Daily Burn Rate: $150.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: R&D

Official Description: MULTI-PROGRAM NATIONAL PHYSICAL RESEARCH INCLUDING RARE EARTHS AND USE OF AMES MPC.

Place of Performance

Location: AMES, STORY County, IOWA, 50011

State: Iowa Government Spending

Plain-Language Summary

Department of Energy obligated $1.10 billion to IOWA STATE UNIVERSITY OF SCIENCE AND TECHNOLOGY for work described as: MULTI-PROGRAM NATIONAL PHYSICAL RESEARCH INCLUDING RARE EARTHS AND USE OF AMES MPC. Key points: 1. Significant investment in physical research, with a focus on rare earths and materials science. 2. Iowa State University is the sole awardee, raising questions about broader competition. 3. Long contract duration (2006-2026) suggests a sustained, multi-year research effort. 4. The contract type (Cost Plus Award Fee) incentivizes performance but requires careful oversight.

Value Assessment

Rating: fair

The $1.1 billion award over 20 years is substantial. Benchmarking is difficult due to the multi-program nature and specific focus on rare earths and materials science, which may have unique cost structures.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting multiple entities had the opportunity to bid. However, the single awardee implies Iowa State University was deemed the most capable or advantageous offer.

Taxpayer Impact: The large investment aims to advance critical research areas, potentially leading to technological breakthroughs and economic benefits, but the cost-effectiveness will depend on research outcomes.

Public Impact

Advancement in physical sciences and materials research, potentially leading to new technologies. Focus on rare earth elements could impact supply chain security and domestic production. Support for a major research university, fostering scientific talent and innovation in Iowa.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

• Potential for cost overruns with Cost Plus Award Fee contract type.
• Long-term nature of the contract requires ongoing monitoring of performance and relevance.
• Sole awardee may limit broader institutional learning or alternative approaches.

Positive Signals

• Significant investment in critical R&D areas.
• Potential for groundbreaking discoveries in physical sciences and materials.
• Long-term commitment to a single institution can foster deep expertise.

Sector Analysis

This contract falls under Research and Development in the Physical, Engineering, and Life Sciences sector. Federal spending in this area is crucial for innovation, with significant investments often directed towards universities and national laboratories for fundamental and applied research.

Small Business Impact

The contract was awarded directly to Iowa State University, a large research institution. There is no explicit indication of small business subcontracting in the provided data, suggesting limited direct impact on small businesses through this prime award.

Oversight & Accountability

The Cost Plus Award Fee structure necessitates robust oversight from the Department of Energy to ensure performance objectives are met and costs are managed effectively. Regular reviews and audits will be critical throughout the contract's long duration.

Related Government Programs

• Research and Development in the Physical, Engineering, and Life Sciences
• Department of Energy Contracting
• Department of Energy Programs

Risk Flags

• Cost control challenges inherent in Cost Plus Award Fee contracts.
• Risk of research outcomes not meeting expectations or timelines over a long duration.
• Potential for limited innovation if competition is not fostered through follow-on efforts.
• Dependence on a single institution may concentrate risk and limit diverse perspectives.

Tags

research-and-development-in-the-physical, department-of-energy, ia, definitive-contract, billion-dollar

Frequently Asked Questions

What is this federal contract paying for?

Department of Energy awarded $1.10 billion to IOWA STATE UNIVERSITY OF SCIENCE AND TECHNOLOGY. MULTI-PROGRAM NATIONAL PHYSICAL RESEARCH INCLUDING RARE EARTHS AND USE OF AMES MPC.

Who is the contractor on this award?

The obligated recipient is IOWA STATE UNIVERSITY OF SCIENCE AND TECHNOLOGY.

Which agency awarded this contract?

Awarding agency: Department of Energy (Department of Energy).

What is the total obligated amount?

The obligated amount is $1.10 billion.

What is the period of performance?

Start: 2006-12-04. End: 2026-12-31.

How will the Department of Energy ensure the Cost Plus Award Fee structure effectively incentivizes groundbreaking research and prevents cost overruns over the 20-year period?

The DOE will likely establish clear, measurable performance metrics and award fee criteria tied to specific research milestones and scientific breakthroughs. Regular progress reviews, independent scientific evaluations, and stringent financial audits will be essential to monitor expenditures and ensure alignment with research goals, mitigating the risk of unchecked cost escalation.

What is the specific strategy for leveraging the research on rare earths to enhance domestic supply chain security and reduce reliance on foreign sources?

The strategy likely involves funding research into novel extraction, processing, and recycling techniques for rare earth elements, as well as exploring alternative materials. The university's findings will inform DOE's broader policy and investment decisions aimed at building a more resilient and secure domestic rare earth supply chain, potentially through pilot projects or technology transfer initiatives.

Beyond Iowa State University, how will the broader scientific community benefit from the knowledge and discoveries generated under this multi-program research initiative?

The university is expected to disseminate research findings through publications, conferences, and open-source data sharing, allowing other researchers to build upon the work. The DOE may also facilitate technology transfer and licensing opportunities, enabling commercialization and broader societal application of the discoveries, thereby maximizing the return on public investment.

Industry Classification

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

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: ALTERNATIVE SOURCES

Solicitation ID: DE-RP02-06CH11358

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 1350 BEARDSHEAR HALL, AMES, IA, 50011

Business Categories: Category Business, Educational Institution, Government, Higher Education, Not Designated a Small Business, U.S. Regional/State Government

Financial Breakdown

Contract Ceiling: $1,121,989,690

Exercised Options: $1,121,989,690

Current Obligation: $1,099,562,782

Actual Outlays: $383,808,860

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Timeline

Start Date: 2006-12-04

Current End Date: 2026-12-31

Potential End Date: 2026-12-31 00:00:00

Last Modified: 2026-03-30

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