DoD's $65.5M R&D contract with Carnegie Mellon University SEI FFRDC shows limited competition

Contract Overview

Contract Amount: $65,525,708 ($65.5M)

Contractor: Carnegie Mellon University

Awarding Agency: Department of Defense

Start Date: 2017-04-26

End Date: 2023-06-30

Contract Duration: 2,256 days

Daily Burn Rate: $29.0K/day

Competition Type: NOT COMPETED

Pricing Type: COST NO FEE

Sector: R&D

Official Description: IGF::OT::IGF CARNEGIE MELLON UNIVERSITY SOFTWARE ENGINEERING INSTITUTE FEDERALLY FUNDED RESEARCH&DEVELOPMENT CENTER

Place of Performance

Location: PITTSBURGH, ALLEGHENY County, PENNSYLVANIA, 15213

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $65.5 million to CARNEGIE MELLON UNIVERSITY for work described as: IGF::OT::IGF CARNEGIE MELLON UNIVERSITY SOFTWARE ENGINEERING INSTITUTE FEDERALLY FUNDED RESEARCH&DEVELOPMENT CENTER Key points: 1. Contract awarded to a Federally Funded Research and Development Center (FFRDC) implies specialized capabilities. 2. The 'Research and Development in the Physical, Engineering, and Life Sciences' NAICS code suggests a focus on advanced scientific inquiry. 3. A 'NOT COMPETED' award indicates a lack of broader market engagement for this specific contract. 4. The contract duration of 2256 days (over 6 years) suggests a long-term, potentially complex research effort. 5. The 'COST NO FEE' contract type may indicate a focus on cost recovery rather than profit for the contractor. 6. The absence of small business set-asides suggests this contract was not structured to specifically benefit smaller enterprises.

Value Assessment

Rating: fair

The contract's value of $65.5 million over approximately six years for R&D services is substantial. However, without specific deliverables or performance metrics, a direct value-for-money assessment is challenging. As a sole-source award to an FFRDC, direct price comparisons to commercial entities are not applicable. The 'COST NO FEE' structure suggests the government aims to cover the contractor's expenses without additional profit, which can be a cost-control mechanism, but also requires careful oversight to prevent cost overruns.

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 entity, such as an FFRDC, possesses unique capabilities or expertise essential for the requirement. The lack of competition means there was no opportunity for price discovery through a bidding process, and the government relied on the established relationship and unique qualifications of Carnegie Mellon University's Software Engineering Institute.

Taxpayer Impact: Sole-source awards limit opportunities for taxpayers to benefit from competitive pricing. While justified by specialized needs, it means the government did not leverage market forces to potentially secure a lower price.

Public Impact

The Department of Defense benefits from specialized research and development capabilities provided by the Carnegie Mellon University Software Engineering Institute. This contract supports advancements in physical, engineering, and life sciences R&D, potentially leading to new technologies and improved defense capabilities. The geographic impact is primarily centered in Pennsylvania, where the contractor is located, but the research outcomes can have national defense implications. The contract supports a highly specialized workforce within the FFRDC, contributing to the nation's pool of scientific and engineering talent.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition limits price discovery and potential cost savings for taxpayers.
Sole-source awards to FFRDCs, while often necessary, require robust oversight to ensure continued value and prevent complacency.
The 'COST NO FEE' structure necessitates diligent monitoring of expenditures to ensure costs remain reasonable and justified.

Positive Signals

Award to an FFRDC ensures access to highly specialized, objective research capabilities critical for national security.
The long contract duration suggests a stable, long-term partnership focused on critical research objectives.
The specific NAICS code indicates a focus on advanced scientific and engineering domains, aligning with strategic R&D needs.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The market for such specialized R&D is often dominated by a limited number of FFRDCs and highly specialized private firms due to the need for deep expertise, security clearances, and established government trust. Comparable spending benchmarks are difficult to establish due to the unique nature of FFRDC work and the specific R&D focus, but government investment in advanced R&D is a significant portion of the overall federal budget.

Small Business Impact

This contract does not appear to include any specific small business set-asides. As a sole-source award to an FFRDC, the primary focus is on leveraging the unique capabilities of that entity rather than distributing work through subcontracting to small businesses. There is no indication of subcontracting requirements for small businesses within the provided data.

Oversight & Accountability

Oversight for this contract would likely be managed by the Department of the Air Force, under the Department of Defense. As a sole-source award, particularly to an FFRDC, oversight would focus on ensuring the contractor meets the research objectives, manages costs effectively under the 'COST NO FEE' structure, and maintains the integrity and objectivity of its research. Transparency is typically managed through regular reporting requirements and potentially through the FFRDC's own governance structures. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federally Funded Research and Development Centers (FFRDCs)
Department of Defense Research and Development Programs
Advanced Technology Development Contracts
Scientific Research Services Contracts

Risk Flags

Sole-source award limits competition.
Lack of performance metrics makes value assessment difficult.
Cost-reimbursement nature requires diligent oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $65.5 million to CARNEGIE MELLON UNIVERSITY. IGF::OT::IGF CARNEGIE MELLON UNIVERSITY SOFTWARE ENGINEERING INSTITUTE FEDERALLY FUNDED RESEARCH&DEVELOPMENT CENTER

Who is the contractor on this award?

The obligated recipient is CARNEGIE MELLON UNIVERSITY.

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 $65.5 million.

What is the period of performance?

Start: 2017-04-26. End: 2023-06-30.

What is the specific nature of the research and development being conducted under this contract?

The contract falls under the NAICS code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology).' While the provided data does not detail the specific projects, it indicates a broad scope within these scientific domains. Given the award to the Carnegie Mellon University Software Engineering Institute (SEI) FFRDC, the research likely pertains to areas critical for national defense, such as cybersecurity, software engineering best practices, systems engineering, artificial intelligence applications for defense, and advanced computing technologies. SEI FFRDCs are established to provide objective advice and conduct research that requires a long-term, government-trusted relationship.

How does the 'COST NO FEE' contract type impact the government's financial risk and oversight requirements?

The 'COST NO FEE' (CNF) contract type means the contractor is reimbursed for allowable costs incurred in performing the contract but receives no fee or profit. This structure is often used for R&D efforts, especially with FFRDCs, where the scope may be uncertain or evolve. For the government, the primary financial risk is the potential for cost overruns if the contractor's expenses exceed projections. This necessitates robust government oversight to scrutinize incurred costs, ensure they are reasonable, allocable, and allowable according to contract terms and federal acquisition regulations. The government must actively manage the contractor's spending to control the overall contract value.

What are the implications of awarding this contract on a sole-source basis to an FFRDC?

Awarding this contract on a sole-source basis to the Carnegie Mellon University SEI FFRDC signifies that the Department of Defense deemed the SEI as the only entity capable of fulfilling the specific, complex R&D requirements. FFRDCs are established to provide unique, long-term research and development capabilities that are in the public interest and are often difficult for the private sector to provide consistently or objectively. While this ensures access to specialized expertise, it bypasses the competitive bidding process. This means the government does not benefit from potential price reductions or innovative solutions that might arise from a competitive environment. Consequently, the government relies heavily on the FFRDC's established reputation, objectivity, and the government's own oversight to ensure value.

What is the historical spending pattern for this specific contract or similar FFRDC services by the Department of Defense?

The provided data shows a single award of $65.5 million with a start date of April 26, 2017, and an end date of June 30, 2023, spanning approximately 2256 days. This represents the total obligated amount for this specific contract. To assess historical spending patterns, one would need to examine prior contracts awarded to the Carnegie Mellon University SEI FFRDC, or other DoD R&D FFRDCs, for similar services. Without access to broader contract databases or historical data specific to this FFRDC's engagement with the DoD, it's difficult to establish a trend. However, FFRDCs typically receive significant, long-term funding due to their specialized, ongoing role in supporting government research needs.

Are there any performance metrics or key performance indicators (KPIs) associated with this contract that can be used to assess its effectiveness?

The provided data does not include specific performance metrics or Key Performance Indicators (KPIs) for this contract. For R&D contracts, especially those awarded to FFRDCs, performance is often measured against the achievement of research objectives, milestones, technical reports, prototypes, or the delivery of objective analyses and recommendations. The 'COST NO FEE' structure implies that the government is primarily concerned with the contractor's ability to manage costs while achieving the defined research goals. A comprehensive assessment of effectiveness would require access to the contract's statement of work, performance work statement, and any associated deliverables or evaluation reports.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 4500 5TH AVE, PITTSBURGH, PA, 15213

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

Financial Breakdown

Contract Ceiling: $88,399,783

Exercised Options: $88,399,783

Current Obligation: $65,525,708

Actual Outlays: $-670,063

Subaward Activity

Number of Subawards: 490

Total Subaward Amount: $89,776,728

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA870215D0002

IDV Type: IDC

Timeline