DoD awards $22.3M for advanced silicon carbide electronics, with limited competition

Contract Overview

Contract Amount: $22,331,438 ($22.3M)

Contractor: Wolfspeed, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-06-23

End Date: 2026-12-01

Contract Duration: 1,987 days

Daily Burn Rate: $11.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: SILICON CARBIDE POWER ELECTRONICS FOR MORE ELECTRIC AIRCRAFT

Place of Performance

Location: FAYETTEVILLE, WASHINGTON County, ARKANSAS, 72701

State: Arkansas Government Spending

Plain-Language Summary

Department of Defense obligated $22.3 million to WOLFSPEED, INC. for work described as: SILICON CARBIDE POWER ELECTRONICS FOR MORE ELECTRIC AIRCRAFT Key points: 1. Contract focuses on critical research and development for next-generation aircraft. 2. Sole-source award raises questions about price discovery and potential cost efficiencies. 3. Long contract duration suggests a significant, multi-year research effort. 4. The award is for research and development, indicating early-stage innovation. 5. The contractor, Wolfspeed, Inc., is a known entity in power electronics. 6. The contract value is substantial for a research and development initiative.

Value Assessment

Rating: fair

The contract value of $22.3 million for research and development in silicon carbide power electronics appears to be within a reasonable range for specialized R&D projects. However, without specific benchmarks for comparable 'more electric aircraft' research initiatives or detailed cost breakdowns, a definitive value-for-money assessment is challenging. The 'cost plus fixed fee' structure necessitates close oversight to ensure costs remain controlled and the fixed fee is justified by the scope of work. Benchmarking against similar R&D efforts in advanced materials and aerospace technologies would provide a clearer picture of pricing efficiency.

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, proprietary technology, or is the only source capable of meeting the requirement. While this can expedite the acquisition process for critical or specialized needs, it limits the potential for competitive bidding to drive down prices and encourage innovation from a broader market. The lack of competition means the government relies heavily on negotiation and oversight to ensure fair pricing and optimal value.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as the benefits of competitive pressure are absent. This necessitates robust negotiation and oversight to ensure the government is not overpaying for the goods or services.

Public Impact

The primary beneficiaries are the Department of the Air Force and the advancement of military aviation technology. The contract will deliver research and development services for advanced silicon carbide power electronics. The geographic impact is primarily within the contractor's facilities, with potential future deployment across Air Force platforms. Workforce implications include specialized engineering and research roles at the contractor's site.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs for taxpayers.
The 'cost plus fixed fee' structure requires diligent oversight to manage costs effectively.
Long contract duration increases the risk of scope creep or evolving requirements not being adequately addressed.

Positive Signals

Focus on advanced, potentially game-changing technology for military aviation.
Contract awarded to a known entity in the specialized field of power electronics.
Clear objective for research and development in a critical defense area.

Sector Analysis

The contract falls within the Research and Development sector, specifically focusing on advanced materials and engineering for aerospace applications. The market for silicon carbide (SiC) power electronics is a rapidly growing segment within the broader semiconductor industry, driven by demand for higher efficiency, power density, and thermal performance in various applications, including electric vehicles and renewable energy. For defense, SiC offers advantages in weight reduction and performance under extreme conditions, crucial for aircraft. Comparable spending benchmarks in this niche R&D area are difficult to establish due to the specialized nature of the technology and its application.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there information indicating significant subcontracting opportunities for small businesses. The award is made directly to Wolfspeed, Inc., a large corporation. The focus on specialized R&D in advanced materials may limit the direct involvement of small businesses unless they are niche suppliers or collaborators within the prime contractor's ecosystem. Further analysis would be needed to determine if any subcontracting plans exist that would benefit the small business sector.

Oversight & Accountability

Oversight for this 'cost plus fixed fee' contract will likely be managed by the contracting officer and program management office within the Department of the Air Force. Accountability measures will focus on tracking research progress, adherence to milestones, and managing incurred costs against the awarded amount. Transparency is generally limited for R&D contracts due to the proprietary nature of the research, but progress reports and final deliverables should be available to relevant government stakeholders. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Advanced Materials Research
Aerospace Power Systems
Next Generation Aircraft Technology
Semiconductor Research and Development
Department of Defense Research Initiatives

Risk Flags

Sole-source award
Cost-plus contract type
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.3 million to WOLFSPEED, INC.. SILICON CARBIDE POWER ELECTRONICS FOR MORE ELECTRIC AIRCRAFT

Who is the contractor on this award?

The obligated recipient is WOLFSPEED, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $22.3 million.

What is the period of performance?

Start: 2021-06-23. End: 2026-12-01.

What is the track record of Wolfspeed, Inc. in delivering on Department of Defense research and development contracts, particularly those involving advanced power electronics?

Wolfspeed, Inc. is a recognized leader in the development and manufacturing of silicon carbide (SiC) and gallium nitride (GaN) power semiconductors. While specific details on their past DoD R&D contract performance are not publicly itemized in this data, their established presence in the industry suggests a strong technical capability. The company has been involved in supplying components for various defense applications, including radar, electronic warfare, and power systems. However, a comprehensive review would require examining past performance evaluations, contract completion records, and any documented issues or successes on similar government R&D projects to fully assess their track record for this specific 'more electric aircraft' initiative.

How does the $22.3 million contract value compare to similar R&D investments in advanced power electronics for aerospace applications?

Benchmarking the $22.3 million contract value for 'SILICON CARBIDE POWER ELECTRONICS FOR MORE ELECTRIC AIRCRAFT' against similar R&D investments is challenging due to the specialized nature of the technology and its specific application within the 'more electric aircraft' concept. However, R&D contracts of this magnitude are not uncommon for developing cutting-edge technologies in the defense sector, especially those involving advanced materials like silicon carbide, which promise significant performance improvements. Comparable projects might include research into advanced battery systems, novel propulsion components, or next-generation avionics. Without access to a database of comparable DoD R&D awards specifically for SiC power electronics in aerospace, a precise comparison is difficult, but the figure suggests a substantial, multi-year research effort.

What are the primary risks associated with this sole-source 'cost plus fixed fee' contract, and what mitigation strategies are in place?

The primary risks associated with this sole-source 'cost plus fixed fee' (CPFF) contract are potential cost overruns and a lack of competitive pressure to ensure optimal value. Since the contractor is reimbursed for allowable costs plus a fixed fee, there's an inherent incentive to incur costs, and the absence of competition means the government cannot leverage market forces to drive down prices. Mitigation strategies typically involve rigorous government oversight of all incurred costs, detailed review of progress reports, adherence to defined milestones, and strong negotiation during the contract's lifecycle. The fixed fee component provides some incentive for efficiency, but the government must actively manage the 'cost' aspect to ensure the overall value is maximized. Defining clear deliverables and performance metrics is crucial.

What is the expected impact of this contract on the development timeline and capabilities of 'more electric aircraft' for the Air Force?

This contract is expected to significantly advance the development of 'more electric aircraft' (MEA) by focusing on a critical enabling technology: silicon carbide (SiC) power electronics. MEA concepts aim to replace traditional hydraulic and pneumatic systems with electrical ones, leading to benefits such as reduced weight, improved fuel efficiency, enhanced reliability, and greater design flexibility. SiC power electronics are key to achieving these goals due to their superior efficiency, higher operating temperatures, and smaller size compared to traditional silicon-based components. Successful research and development under this contract could accelerate the integration of these advanced power systems, potentially shortening the timeline for fielding next-generation aircraft with enhanced capabilities and reduced operational costs.

How has historical spending on silicon carbide power electronics R&D by the Department of Defense evolved, and does this contract represent a significant shift or continuation?

Historical spending by the Department of Defense (DoD) on silicon carbide (SiC) power electronics R&D has generally been increasing as the benefits of SiC technology for defense applications become more apparent. SiC offers advantages in harsh environments, high-power density, and efficiency, making it attractive for military platforms where weight, performance, and reliability are paramount. This $22.3 million contract for 'more electric aircraft' represents a substantial, focused investment in a specific application area of SiC technology. It aligns with a broader trend within the DoD to leverage advanced semiconductor materials to enhance platform capabilities. While not necessarily a radical departure, it signifies a continued and significant commitment to maturing and integrating SiC power electronics into future military systems, particularly in the context of electrification.

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

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

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: $22,331,438

Exercised Options: $22,331,438

Current Obligation: $22,331,438

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline