Penn State University awarded $1.98M for R&D in electro-optics, with a 3-year performance period

Contract Overview

Contract Amount: $1,985,417 ($2.0M)

Contractor: THE Pennsylvania State University

Awarding Agency: Department of Defense

Start Date: 2025-03-03

End Date: 2028-01-03

Contract Duration: 1,036 days

Daily Burn Rate: $1.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: ELECTRO OPTICS CENTER FY25 NEW PROJECT TASK ORDER AND EXPANSIONS

Place of Performance

Location: UNIVERSITY PARK, CENTRE County, PENNSYLVANIA, 16802

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $2.0 million to THE PENNSYLVANIA STATE UNIVERSITY for work described as: ELECTRO OPTICS CENTER FY25 NEW PROJECT TASK ORDER AND EXPANSIONS Key points: 1. Contract awarded to a single, well-established research institution. 2. Research and Development focus aligns with advanced technology needs. 3. Cost-plus-fixed-fee contract type may allow for cost overruns. 4. Performance period extends over three years, indicating a substantial project. 5. No small business set-aside, suggesting a focus on specialized research capabilities. 6. Geographic location in Pennsylvania may have local economic implications.

Value Assessment

Rating: fair

The contract value of $1.98 million for a three-year R&D project appears reasonable for a specialized research endeavor. However, without specific benchmarks for electro-optics R&D at this level, a definitive value-for-money assessment is challenging. The cost-plus-fixed-fee structure introduces some risk of cost escalation, which warrants monitoring. Comparing this to similar large-scale university research grants or contracts would provide better context.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple offerors had the opportunity to bid. The specific number of bidders is not provided, but the full and open nature suggests a competitive process was intended. This approach generally promotes price discovery and allows the government to select the best value offer.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it aims to secure the most competitive pricing and the best technical solutions available in the market.

Public Impact

The Pennsylvania State University will benefit from this funding, supporting its research infrastructure and personnel. The project will advance research and development in electro-optics, potentially leading to new technologies. The geographic impact is primarily within Pennsylvania, supporting local research and development ecosystems. Workforce implications include employment for researchers, technicians, and support staff at the university.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contract type can lead to higher final costs if not managed carefully.
Lack of specific performance metrics in the provided data makes it difficult to assess project success.
The duration of the contract suggests a complex research undertaking, increasing the potential for unforeseen challenges.

Positive Signals

Award to a reputable research institution like Penn State suggests a high likelihood of technical competence.
Full and open competition indicates a structured procurement process aimed at achieving best value.
The project's focus on R&D in electro-optics aligns with critical national defense and technological advancement goals.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on electro-optics. This is a highly specialized area within the broader scientific and engineering fields. The market for such advanced R&D is often dominated by universities and specialized research firms. Comparable spending benchmarks would typically involve other large federal grants or contracts awarded to academic institutions for similar scientific pursuits.

Small Business Impact

The contract does not appear to have a small business set-aside, which is common for large-scale, specialized research and development projects awarded to major research institutions. Subcontracting opportunities for small businesses are not explicitly detailed but could arise if Penn State partners with smaller firms for specific components or services.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. Accountability measures would be tied to the terms of the Cost Plus Fixed Fee contract, requiring detailed reporting on costs and progress. Transparency is generally maintained through contract award databases and reporting requirements, though specific project details may be sensitive.

Related Government Programs

Department of Defense Research and Development Programs
National Science Foundation Research Grants
University Research Partnerships with Federal Agencies
Advanced Photonics and Optics Research

Risk Flags

Cost-plus-fixed-fee contract type may lead to higher final costs.
Long performance period increases exposure to potential cost overruns and scope changes.
Lack of specific performance metrics in the provided data hinders objective evaluation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $2.0 million to THE PENNSYLVANIA STATE UNIVERSITY. ELECTRO OPTICS CENTER FY25 NEW PROJECT TASK ORDER AND EXPANSIONS

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 $2.0 million.

What is the period of performance?

Start: 2025-03-03. End: 2028-01-03.

What is the historical spending pattern of the Department of the Navy with The Pennsylvania State University for R&D contracts?

Analyzing the historical spending patterns between the Department of the Navy (DoN) and The Pennsylvania State University (PSU) for Research and Development (R&D) contracts requires access to detailed federal procurement databases. Generally, major research universities like PSU are frequent recipients of federal R&D funding across various agencies, including the DoN, due to their extensive research capabilities and infrastructure. The DoN often funds research in areas critical to national defense, such as advanced materials, propulsion, sensors, and cybersecurity, which align with PSU's strengths. Historical data would likely show a pattern of multi-year, significant awards for complex research projects. The specific value and frequency of these awards would fluctuate based on evolving defense priorities and the success of PSU's proposals. Without direct access to historical contract data for this specific pairing, it's difficult to provide precise figures, but it is reasonable to assume a consistent and substantial relationship exists, reflecting PSU's status as a leading research institution.

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

The Cost Plus Fixed Fee (CPFF) contract type is often used for research and development efforts where the scope of work is not precisely defined at the outset, making it difficult to estimate costs accurately. In a CPFF contract, the contractor is reimbursed for all allowable costs incurred, plus a fixed fee representing profit. While this structure allows for flexibility and encourages innovation in R&D, it can be less cost-efficient for the government compared to fixed-price contracts. With fixed-price contracts, the contractor assumes more risk for cost overruns, incentivizing them to manage expenses tightly. However, for highly uncertain R&D projects, a fixed-price approach might deter potential contractors or lead to inflated initial bids to cover perceived risks. CPFF provides a balance by allowing the government to pursue necessary research while managing contractor profit, but it necessitates robust oversight to control costs and prevent scope creep. Other contract types like Cost Plus Incentive Fee (CPIF) can offer better cost control by adjusting the fee based on performance against targets.

What are the key performance indicators (KPIs) typically used to evaluate the success of electro-optics R&D projects funded by the Department of the Navy?

Evaluating the success of electro-optics R&D projects funded by the Department of the Navy (DoN) typically involves a combination of technical, programmatic, and sometimes cost-related Key Performance Indicators (KPIs). Technically, success might be measured by achieving specific performance metrics such as improved resolution, increased signal-to-noise ratio, enhanced detection range, reduced size, weight, and power (SWaP) consumption, or demonstrating novel functionalities. Programmatically, KPIs could include adherence to project milestones, successful completion of prototypes or demonstrations, and the timely delivery of research reports and findings. From a cost perspective, especially with CPFF contracts, monitoring the actual costs against the estimated costs and ensuring efficient use of funds are crucial. Ultimately, the overarching goal is to determine if the R&D effort contributes to advancing the DoN's technological capabilities, enhances operational effectiveness, or provides a basis for future system development and procurement. Specific KPIs are usually detailed within the contract's Statement of Work (SOW) and performance management plan.

What is the typical duration and funding level for similar electro-optics R&D contracts awarded by the Department of Defense?

The duration and funding levels for electro-optics R&D contracts awarded by the Department of Defense (DoD) can vary significantly based on the project's complexity, scope, and technological maturity. Projects focused on fundamental research or early-stage technology development might range from 1 to 3 years with funding from a few hundred thousand to a few million dollars. More advanced development efforts, such as prototyping or system integration, could extend for 3 to 5 years or longer and involve tens of millions of dollars. Contracts awarded to major research institutions, like the one to Penn State, often fall into the multi-year, multi-million dollar category, reflecting the substantial resources and time required for cutting-edge scientific inquiry. The $1.98 million award over approximately three years for this electro-optics R&D task order appears to be within the typical range for a significant, but not exceptionally large, research initiative within the DoD's R&D portfolio. Factors like the specific technological area within electro-optics (e.g., sensors, lasers, imaging) and the intended application heavily influence these parameters.

What are the potential risks associated with a Cost Plus Fixed Fee (CPFF) contract for a long-term R&D project?

Cost Plus Fixed Fee (CPFF) contracts, while offering flexibility for research and development, carry inherent risks for the government, particularly in long-term projects. A primary risk is cost overrun; since the contractor is reimbursed for all allowable costs, there is less financial incentive to control expenses compared to fixed-price contracts. This can lead to the final project cost exceeding initial estimates. Another risk is scope creep, where the project's objectives may expand beyond the original intent, leading to increased costs and extended timelines. The fixed fee, while intended to provide profit stability, might become disproportionately high if costs are managed inefficiently. Effective oversight, rigorous cost tracking, and clear definition of allowable costs are crucial to mitigate these risks. Additionally, the government must ensure that the contractor's accounting systems are robust and that all expenditures are properly documented and justified. Without strong program management and oversight, CPFF contracts can become more expensive than anticipated.

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: NEGOTIATED PROPOSAL/QUOTE

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: $4,509,276

Exercised Options: $4,509,276

Current Obligation: $1,985,417

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0001420D7001

IDV Type: IDC

Timeline