DoD's $19.3M R&D contract for electronic power modules awarded to CREE FAYETTEVILLE, INC. shows mixed value

Contract Overview

Contract Amount: $19,346,324 ($19.3M)

Contractor: Cree Fayetteville, Inc.

Awarding Agency: Department of Defense

Start Date: 2010-09-30

End Date: 2019-04-30

Contract Duration: 3,134 days

Daily Burn Rate: $6.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: SIC ELECTRONIC POWER MODULES

Place of Performance

Location: FAYETTEVILLE, WASHINGTON County, ARKANSAS, 72701

State: Arkansas Government Spending

Plain-Language Summary

Department of Defense obligated $19.3 million to CREE FAYETTEVILLE, INC. for work described as: SIC ELECTRONIC POWER MODULES Key points: 1. Contract value of $19.3 million for research and development. 2. Awarded to CREE FAYETTEVILLE, INC. under a full and open competition. 3. Contract duration of over 8 years suggests a long-term R&D effort. 4. The 'Research and Development in the Physical, Engineering, and Life Sciences' category indicates a focus on innovation. 5. The contract type 'COST PLUS FIXED FEE' can sometimes lead to cost overruns if not managed tightly. 6. The absence of small business set-aside flags potential missed opportunities for smaller firms.

Value Assessment

Rating: fair

Benchmarking the value of this $19.3 million R&D contract is challenging without specific performance metrics or comparable project costs. The Cost Plus Fixed Fee (CPFF) structure, while common for R&D, carries inherent risks of cost escalation. The long duration of over 8 years suggests a significant investment, but the ultimate return on investment is not immediately apparent from the data provided. Further analysis would require understanding the specific technological advancements achieved and their market applicability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while the competition was initially broad, certain sources were later excluded. The number of bidders is not specified, but the 'full and open' nature suggests an attempt to solicit a wide range of proposals. This approach generally promotes price discovery and encourages competitive pricing, though the exclusion of sources could limit the breadth of that discovery.

Taxpayer Impact: A full and open competition, even with exclusions, is generally favorable for taxpayers as it aims to secure the best value through a competitive process, potentially leading to lower overall costs compared to sole-source awards.

Public Impact

The primary beneficiaries are likely the Department of Defense, which gains access to advanced electronic power module technology. The contract supports research and development activities, potentially leading to new or improved defense capabilities. The geographic impact is centered in Arkansas, where CREE FAYETTEVILLE, INC. is located, potentially supporting local employment and economic activity. The workforce implications include specialized R&D roles for engineers and scientists involved in the project.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize contractors to incur higher costs to achieve a fixed fee, potentially impacting overall expenditure.
The exclusion of sources in a 'full and open' competition raises questions about the completeness of the competitive landscape.
The long contract duration (over 8 years) increases the risk of scope creep or evolving technological requirements not being fully met.

Positive Signals

Awarded through a full and open competition, suggesting a structured procurement process aimed at achieving value.
The contract is for Research and Development, indicating investment in innovation and future capabilities.
The contractor, CREE FAYETTEVILLE, INC., is likely a specialized entity capable of undertaking complex R&D.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on electronic power modules. The SIC code 541712 points to R&D in physical sciences and engineering. The defense industry heavily relies on advancements in power electronics for various applications, from weapon systems to communication equipment. Comparable spending benchmarks would involve analyzing other DoD R&D contracts for similar technologies or components, which often represent significant investments due to the specialized nature and high performance requirements.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the procurement was likely aimed at larger, established firms with the capacity and expertise for advanced R&D in electronic power modules. There is no explicit information on subcontracting plans, but for a contract of this nature and size, it's possible that smaller specialized firms could be engaged as subcontractors, though this is not guaranteed by the contract terms provided.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. Accountability measures would be embedded within the Cost Plus Fixed Fee contract terms, requiring detailed reporting on costs and progress. Transparency is generally facilitated through contract award databases, but specific project details and performance reviews may be less publicly accessible due to the sensitive nature of defense R&D.

Related Government Programs

Department of Defense Research and Development Programs
Advanced Electronics Procurement
Power Systems Development Contracts
Defense Technology Innovation Initiatives

Risk Flags

Long contract duration increases risk.
CPFF contract type requires careful cost oversight.
Exclusion of sources in competition warrants review.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.3 million to CREE FAYETTEVILLE, INC.. SIC ELECTRONIC POWER MODULES

Who is the contractor on this award?

The obligated recipient is CREE FAYETTEVILLE, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $19.3 million.

What is the period of performance?

Start: 2010-09-30. End: 2019-04-30.

What specific advancements in electronic power modules was this contract intended to achieve?

The provided data does not specify the exact technological advancements sought. However, given the SIC code 541712 (Research and Development in the Physical, Engineering, and Life Sciences), the contract likely aimed at developing next-generation electronic power modules with improved efficiency, higher power density, enhanced reliability under extreme conditions, or novel functionalities relevant to defense applications. These could include modules for advanced radar systems, directed energy weapons, next-generation communication platforms, or improved power management for unmanned systems. The long duration suggests a focus on fundamental research or significant technological breakthroughs rather than incremental improvements.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other R&D contract types in terms of cost efficiency for the government?

The Cost Plus Fixed Fee (CPFF) contract type is common for R&D where the scope is not fully defined, allowing flexibility. The government pays the contractor's actual costs plus a fixed fee representing profit. While this provides flexibility, it can incentivize higher costs as the contractor is guaranteed their fee regardless of cost efficiency. Compared to Fixed Price contracts, CPFF offers less cost certainty for the government. However, compared to Cost Plus Incentive Fee (CPIF) or Cost Plus Award Fee (CPAF), which include performance incentives, CPFF offers less direct motivation for cost control beyond the initial fee negotiation. For R&D, it balances flexibility with a defined profit margin, but requires robust government oversight to manage costs effectively.

What is the typical performance track record of CREE FAYETTEVILLE, INC. for similar government contracts?

The provided data does not include information on CREE FAYETTEVILLE, INC.'s performance track record for government contracts. To assess this, one would need to consult databases like the Federal Procurement Data System (FPDS) or the Contractor Performance Assessment Reporting System (CPARS) for past performance reviews, contract awards, and any reported issues or successes. Without this external data, it's impossible to evaluate their historical reliability and effectiveness in fulfilling similar R&D obligations for the Department of Defense or other federal agencies.

What is the market size and significance of electronic power modules within the defense sector?

Electronic power modules are critical components across a vast array of defense systems, including radar, electronic warfare, communications, guidance systems, and power generation for platforms like aircraft, ships, and ground vehicles. The market for these specialized components within the defense sector is substantial, driven by the need for high reliability, efficiency, and performance under demanding operational conditions. Advancements in power electronics directly enable the development of more capable, compact, and energy-efficient defense technologies. The specific market size for R&D in this niche is difficult to quantify without detailed market research reports, but it represents a significant portion of the overall defense electronics procurement budget due to its foundational role in technological superiority.

Were there any significant cost underruns or overruns reported during the execution of this contract?

The provided summary data does not contain information regarding cost underruns or overruns for this specific contract. CPFF contracts inherently carry a risk of cost overruns if not managed diligently by the government. To determine if significant deviations occurred, one would need to access detailed contract financial reports, modification histories, and potentially Inspector General reports related to this award. Such information is typically not available in high-level procurement summaries but might be obtainable through specific data requests or deeper dives into contract management systems.

How does the $19.3 million spending on this contract compare to overall DoD R&D spending in physical and engineering sciences?

The $19.3 million awarded to CREE FAYETTEVILLE, INC. for R&D in electronic power modules represents a specific investment within the broader Department of Defense R&D portfolio. DoD's total R&D budget is typically in the tens of billions of dollars annually, covering a wide spectrum of scientific and engineering disciplines. Therefore, $19.3 million, while substantial for a single contract, is a relatively small fraction of the overall DoD R&D expenditure. Its significance lies in its targeted focus on a critical technology area (power modules) that underpins many advanced defense capabilities, rather than its sheer dollar amount relative to the entire R&D 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 › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: BASIC RESEARCH

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Wolfspeed Inc

Address: 535 W RESEARCH CENTER BLVD, STE 209, FAYETTEVILLE, AR, 72701

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $19,346,324

Exercised Options: $19,346,324

Current Obligation: $19,346,324

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline