Penn State University awarded $17.3M for undersea systems R&D, with a 5-year performance period

Contract Overview

Contract Amount: $17,305,867 ($17.3M)

Contractor: THE Pennsylvania State University

Awarding Agency: Department of Defense

Start Date: 2022-02-25

End Date: 2027-02-24

Contract Duration: 1,825 days

Daily Burn Rate: $9.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 999

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: UNDERSEA SYSTEMS TECHNOLOGIES DEVELOPMENT

Place of Performance

Location: UNIVERSITY PARK, CENTRE County, PENNSYLVANIA, 16802

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $17.3 million to THE PENNSYLVANIA STATE UNIVERSITY for work described as: UNDERSEA SYSTEMS TECHNOLOGIES DEVELOPMENT Key points: 1. Contract value appears reasonable for a 5-year R&D effort in a specialized field. 2. Full and open competition suggests a healthy market for undersea systems R&D. 3. Performance period of 1825 days indicates a long-term research commitment. 4. Contract type (Cost Plus Fixed Fee) is common for R&D where costs are uncertain. 5. The award is for Research and Development in Physical, Engineering, and Life Sciences. 6. The Pennsylvania State University has a significant track record in research contracts.

Value Assessment

Rating: good

The contract value of $17.3 million over five years for specialized R&D is within a reasonable range for such complex projects. Benchmarking against similar contracts for advanced undersea systems development would provide a more precise value-for-money assessment. The Cost Plus Fixed Fee structure is appropriate for research where final costs are difficult to predict, but it necessitates careful oversight to manage expenses effectively. The fixed fee component provides some incentive for cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple capable contractors had the opportunity to bid. The specific number of bidders is not provided, but the open competition suggests a robust market for undersea systems technologies. This process is designed to foster price discovery and ensure the government receives competitive proposals, potentially leading to better value.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces and ensuring that the most capable and cost-effective solutions are considered.

Public Impact

The primary beneficiary is the Department of the Navy, which will receive advancements in undersea systems technology. This contract supports research and development, potentially leading to new capabilities for national defense. The geographic impact is centered in Pennsylvania, where the research will be conducted. The contract supports highly skilled researchers and engineers in the field of undersea technology.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts require diligent oversight to prevent cost overruns.
The long performance period could introduce risks related to evolving technological requirements.

Positive Signals

Full and open competition suggests a competitive landscape, potentially leading to better value.
The Pennsylvania State University's established research capabilities are a positive signal for project execution.
The award is for a critical R&D area supporting national security.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The market for advanced undersea systems is specialized, often involving a mix of academic institutions and defense contractors. Spending in this niche area is driven by defense modernization needs and technological advancements. Comparable spending benchmarks would typically be found within broader DoD R&D budgets for naval systems.

Small Business Impact

The data indicates this contract was awarded under full and open competition and does not specify any small business set-aside. Therefore, direct implications for small business set-asides are minimal. However, the prime contractor, The Pennsylvania State University, may engage small businesses as subcontractors for specialized services or supplies, contributing to the small business ecosystem indirectly.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract will likely be managed by the Department of the Navy's contracting and technical offices. Accountability measures will focus on milestone achievement, technical progress, and adherence to the fixed fee. Transparency is facilitated through contract award databases, though detailed project progress reports are typically internal to the government and contractor.

Related Government Programs

Naval Research Programs
Advanced Technology Development
Defense Research and Engineering
Undersea Warfare Technology

Risk Flags

Long-term R&D projects carry inherent uncertainty.
Cost Plus Fixed Fee contracts require robust government oversight.
Specialized R&D fields may have limited competition pools.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.3 million to THE PENNSYLVANIA STATE UNIVERSITY. UNDERSEA SYSTEMS TECHNOLOGIES DEVELOPMENT

Who is the contractor on this award?

The obligated recipient is THE PENNSYLVANIA STATE UNIVERSITY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $17.3 million.

What is the period of performance?

Start: 2022-02-25. End: 2027-02-24.

What is The Pennsylvania State University's track record with federal R&D contracts, particularly with the Department of Defense?

The Pennsylvania State University has a substantial history of securing and executing federal research and development contracts, particularly with agencies like the Department of Defense (DoD). As a major research institution, it frequently engages in complex, long-term projects spanning various scientific and engineering disciplines. Its success in obtaining contracts, such as this $17.3 million award for undersea systems, indicates a strong capability in proposal development, research execution, and compliance with federal acquisition regulations. The university's research infrastructure, experienced personnel, and established relationships with government agencies contribute to its consistent performance in the federal contracting arena. Specific details on past performance metrics, such as on-time delivery and budget adherence for previous DoD contracts, would offer further insight into their reliability.

How does the $17.3 million value compare to similar R&D contracts for undersea systems?

Benchmarking the $17.3 million value requires comparing it to contracts for similar scope, complexity, and duration within the undersea systems R&D domain. Contracts for basic research might be lower, while those involving advanced prototype development or system integration could be significantly higher. The five-year performance period for this contract suggests a substantial research effort. Without access to a comprehensive database of comparable contracts, a precise comparison is difficult. However, for a multi-year R&D effort in a specialized defense technology area, $17.3 million appears to be a moderate investment, potentially reflecting a focused research objective rather than full-scale system development. Factors like the specific technologies being researched, the number of personnel involved, and the required facilities would influence the overall cost.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D?

Cost Plus Fixed Fee (CPFF) contracts, while common for R&D, carry inherent risks. For the government, the primary risk is that the contractor may not be sufficiently incentivized to control costs, as the fee is fixed regardless of the final cost incurred. This can lead to cost overruns if not managed diligently through robust oversight. Contractors, on the other hand, risk absorbing unexpected cost increases if their initial estimates are inaccurate, as the fee is fixed. For R&D specifically, the uncertainty of research outcomes poses a significant risk; if the research proves more difficult or requires more resources than anticipated, the contractor might struggle to complete the work within the expected cost parameters while still earning their fixed fee. Effective risk mitigation involves detailed cost monitoring, clear performance metrics, and strong communication between the government and the contractor.

How effective is full and open competition in ensuring value for taxpayer money in specialized R&D like undersea systems?

Full and open competition is generally considered the most effective method for ensuring value for taxpayer money, even in specialized R&D. By allowing all responsible sources to submit proposals, it maximizes the pool of potential solutions and fosters a competitive environment. This competition drives down prices, encourages innovation, and ensures that the government selects the offeror providing the best overall value, considering both technical merit and cost. In specialized fields like undersea systems, while the number of highly qualified bidders might be limited, open competition still ensures that the available expertise is leveraged effectively. It prevents sole-source awards, which often come at a premium, and provides a transparent basis for selecting the most capable and cost-efficient contractor.

What are the potential long-term implications of this $17.3M R&D contract for future undersea warfare capabilities?

This $17.3 million R&D contract for undersea systems has the potential to significantly influence future undersea warfare capabilities. The research conducted under this award could lead to breakthroughs in areas such as improved sonar technology, advanced unmanned underwater vehicles (UUVs), enhanced stealth capabilities for submarines, or novel methods for undersea communication and navigation. The five-year duration suggests a focus on developing foundational technologies or maturing concepts that could be incorporated into next-generation naval platforms. Successful outcomes could provide the U.S. Navy with a critical technological advantage, enhancing its ability to operate effectively in the undersea domain, which is increasingly important for national security. Conversely, if the research faces significant challenges or does not yield expected results, it could delay the fielding of advanced capabilities.

Given the contract is for R&D, how is performance measured and success defined?

Performance measurement and success definition for R&D contracts, especially those using a Cost Plus Fixed Fee structure, typically revolve around achieving specific technical milestones and objectives outlined in the contract's Statement of Work (SOW). Success is not solely defined by a final product but by progress in research, development of prototypes, successful testing of components, and the generation of new knowledge or technological advancements. Key Performance Indicators (KPIs) might include the successful demonstration of a particular technology, the validation of a theoretical model, or the delivery of research reports detailing findings and recommendations. The government contracting officer and technical representatives closely monitor progress against these defined milestones. Failure might be defined as a consistent inability to meet technical objectives or a significant deviation from the research plan without justification, even if costs are managed.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Solicitation ID: N0001420SB001

Offers Received: 999

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 201 OLD MAIN, UNIVERSITY PARK, PA, 16802

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

Financial Breakdown

Contract Ceiling: $18,144,797

Exercised Options: $18,144,797

Current Obligation: $17,305,867

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline