DoD's $32.4M contract for SERC research awarded to Stevens Institute of Technology, raising questions about competition

Contract Overview

Contract Amount: $32,372,397 ($32.4M)

Contractor: THE Trustees of the Stevens Institute of Technology

Awarding Agency: Department of Defense

Start Date: 2023-06-09

End Date: 2025-09-30

Contract Duration: 844 days

Daily Burn Rate: $38.4K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: RESEARCH IN SUPPORT OF THE DEFENSE CIVILIAN TRAINING CORPS SYSTEMS ENGINEERING RESEARCH CENTER TASK 1080

Place of Performance

Location: HOBOKEN, HUDSON County, NEW JERSEY, 07030

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $32.4 million to THE TRUSTEES OF THE STEVENS INSTITUTE OF TECHNOLOGY for work described as: RESEARCH IN SUPPORT OF THE DEFENSE CIVILIAN TRAINING CORPS SYSTEMS ENGINEERING RESEARCH CENTER TASK 1080 Key points: 1. The contract's value of over $32 million for research support indicates a significant investment in specialized systems engineering. 2. The award to Stevens Institute of Technology suggests a focus on academic and research institution partnerships for defense needs. 3. The 'NOT COMPETED' status is a key risk indicator, potentially limiting price discovery and value for money. 4. The contract duration of 844 days (approx. 2.3 years) suggests a medium-term research and development effort. 5. The NAICS code 541715 points to a focus on physical, engineering, and life sciences research, excluding specialized biotech/nanotech. 6. The contract type 'COST PLUS FIXED FEE' can incentivize cost overruns if not carefully managed.

Value Assessment

Rating: questionable

Benchmarking the value of this specific research support contract is challenging without more detailed scope information. However, the 'NOT COMPETED' award mechanism raises concerns about whether the government secured the best possible price. The Cost Plus Fixed Fee (CPFF) contract type, while common for R&D, can lead to higher costs compared to fixed-price contracts if cost controls are not robust. The total award amount of $32.4 million is substantial, and without competitive bids, it's difficult to ascertain if this represents fair market value for the services rendered.

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 potential offerors. This approach is typically used when only one source is capable of meeting the requirement, or in specific circumstances like follow-on work to a previous contract. The lack of competition means that the government did not benefit from the price reductions and innovation that can arise from a competitive bidding process. This raises questions about the thoroughness of the market research conducted to ensure no other qualified entities could have provided the services.

Taxpayer Impact: The absence of competition means taxpayers may not have received the most cost-effective solution. Without bids from other organizations, it's harder to ensure that the awarded price reflects true market value, potentially leading to overspending.

Public Impact

The primary beneficiaries are the Department of Defense and its civilian training initiatives, receiving specialized systems engineering research. The contract supports the development and enhancement of systems engineering capabilities crucial for defense operations. The geographic impact is primarily centered in New Jersey, where Stevens Institute of Technology is located, but the research findings will have national defense implications. The contract supports research personnel and potentially students at Stevens Institute of Technology, contributing to the specialized workforce in systems engineering.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting cost-effectiveness.
Cost Plus Fixed Fee contract type carries inherent risk of cost escalation if not managed tightly.
Lack of transparency in the justification for a sole-source award.
The specific research outcomes and their direct impact on defense capabilities require further scrutiny.
Potential for scope creep in R&D contracts, especially under CPFF terms.

Positive Signals

Award to a reputable academic institution (Stevens Institute of Technology) with established research capabilities.
Focus on critical defense systems engineering research supports long-term national security objectives.
The contract duration allows for in-depth research and development.
The specific NAICS code indicates a focus on highly specialized scientific and engineering expertise.

Sector Analysis

The contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. This sector is crucial for maintaining technological superiority in defense. Comparable spending in this area often involves significant investments in advanced materials, simulation, and complex systems integration. The market for specialized systems engineering research is often dominated by a mix of academic institutions and specialized R&D firms, with academic institutions frequently securing grants and contracts for foundational and applied research.

Small Business Impact

There is no indication that this contract includes small business set-asides or subcontracting requirements. As a sole-source award to a large academic institution, the direct impact on the small business ecosystem is likely minimal. However, the absence of subcontracting goals means fewer opportunities for small businesses to participate in this specific research effort.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. The specific mechanisms for oversight, such as regular progress reports, performance reviews, and financial audits, would be detailed in the contract itself. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Research and Engineering
Systems Engineering
Academic Research Partnerships
Department of Defense R&D Contracts
Research and Development in Physical Sciences

Risk Flags

Sole-source award
Lack of competition
Cost Plus Fixed Fee contract type
Potential for cost overruns
Limited transparency in award justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.4 million to THE TRUSTEES OF THE STEVENS INSTITUTE OF TECHNOLOGY. RESEARCH IN SUPPORT OF THE DEFENSE CIVILIAN TRAINING CORPS SYSTEMS ENGINEERING RESEARCH CENTER TASK 1080

Who is the contractor on this award?

The obligated recipient is THE TRUSTEES OF THE STEVENS INSTITUTE OF TECHNOLOGY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Washington Headquarters Services).

What is the total obligated amount?

The obligated amount is $32.4 million.

What is the period of performance?

Start: 2023-06-09. End: 2025-09-30.

What is the specific justification for awarding this contract on a sole-source basis to Stevens Institute of Technology?

The provided data indicates the contract was 'NOT COMPETED,' which implies a sole-source award. The specific justification for this sole-source determination is not detailed in the provided data. Typically, sole-source awards require a formal justification, such as the unique capabilities of the contractor, a critical need that cannot be met by other sources, or a national security imperative. Without this justification, it is difficult to assess whether the government adequately explored competitive options or if this was the only viable path to meet the requirement. Further investigation into the contract file or agency procurement records would be necessary to understand the rationale.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other R&D contract types in terms of risk and value for money?

Cost Plus Fixed Fee (CPFF) contracts are common in research and development where the scope of work can be uncertain and evolve. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This structure incentivizes the contractor to control costs to maximize their profit margin, as the fee is fixed regardless of the final cost. However, it carries risks for the government, including potential cost overruns if the initial cost estimates are inaccurate or if the scope expands significantly. Compared to fixed-price contracts, CPFF offers more flexibility for evolving R&D but potentially less cost certainty. Value for money under CPFF heavily relies on robust government oversight, clear performance metrics, and effective negotiation of the initial fee and cost estimates.

What is the track record of Stevens Institute of Technology in securing and executing similar federal research contracts?

Stevens Institute of Technology is a well-established research university with a history of engaging in federal research contracts, particularly in engineering and science disciplines. While specific details on their track record for similar 'systems engineering research' contracts are not provided here, their designation as a research institution suggests experience in managing federal grants and contracts. Their performance on past contracts, including adherence to timelines, budget management, and quality of research output, would be a key factor in assessing their suitability for this award. A review of their past performance ratings and any publicly available contract awards would provide further insight.

What are the potential implications of the 'NOT COMPETED' status on the overall cost-effectiveness of this research investment?

The 'NOT COMPETED' status is a significant indicator of potential reduced cost-effectiveness. When a contract is not competed, the government foregoes the benefits of a competitive bidding process, which typically drives down prices through market forces and encourages innovation among bidders. Without multiple proposals to evaluate, the government may not secure the lowest possible price for the required services. This can lead to taxpayers potentially paying more than necessary. While sole-source awards are sometimes justified by unique capabilities or urgent needs, their use requires careful scrutiny to ensure that the absence of competition does not result in a suboptimal financial outcome for the government.

How does the $32.4 million award compare to typical spending on systems engineering research within the Department of Defense?

The $32.4 million award for systems engineering research support is a substantial sum, indicative of a significant project or a long-term research initiative. Benchmarking this against typical DoD spending requires context on the specific scope and duration of the research. The DoD invests billions annually in R&D across various domains. Contracts of this magnitude are not uncommon for specialized research centers or major system development phases. However, without knowing the specific deliverables and the competitive landscape for such services, it's difficult to definitively state if this amount is high or low relative to comparable efforts. The fact that it was sole-sourced adds a layer of concern regarding its cost-effectiveness compared to a potentially competed contract.

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: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HQ003418R0300

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1 CASTLE POINT ON HUDSON, HOBOKEN, NJ, 07030

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: $32,372,397

Exercised Options: $32,372,397

Current Obligation: $32,372,397

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $22,839,922

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HQ003419D0003

IDV Type: IDC

Timeline