DoD awards $18.6M research contract to Penn State for physical science R&D

Contract Overview

Contract Amount: $18,651,931 ($18.7M)

Contractor: THE Pennsylvania State University

Awarding Agency: Department of Defense

Start Date: 2023-05-25

End Date: 2026-05-24

Contract Duration: 1,095 days

Daily Burn Rate: $17.0K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: VARIANT

Place of Performance

Location: UNIVERSITY PARK, CENTRE County, PENNSYLVANIA, 16802

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $18.7 million to THE PENNSYLVANIA STATE UNIVERSITY for work described as: VARIANT Key points: 1. Contract focuses on advanced physical science research, aligning with national security objectives. 2. Sole-source award to a major research university suggests specialized capabilities or existing partnership. 3. Performance period of three years indicates a project of moderate duration and complexity. 4. Research and Development in Physical Sciences is a critical area for technological advancement. 5. The contract type (Cost Plus Fixed Fee) is common for research where costs are uncertain.

Value Assessment

Rating: fair

Benchmarking the value of this research contract is challenging without specific deliverables or comparable projects. The Cost Plus Fixed Fee structure means the final cost is not fixed upfront, introducing potential for cost overruns. However, contracting with a leading research institution like Penn State can offer significant value in terms of expertise and innovation, even if direct cost comparisons are difficult.

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 possesses unique qualifications, capabilities, or when there's a compelling reason to award to a particular contractor, such as an existing relationship or specialized knowledge. The lack of competition means potential savings from a competitive bidding process were not realized.

Taxpayer Impact: Sole-source awards can limit opportunities for other businesses and may not always yield the most cost-effective outcome for taxpayers compared to a competitive process.

Public Impact

The primary beneficiary is the Department of Defense, which will receive advanced research outcomes. The contract supports research in physical sciences, potentially leading to new technologies and capabilities. The geographic impact is centered in Pennsylvania, where The Pennsylvania State University is located. This contract supports academic research personnel, including faculty, researchers, and students.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition limits price discovery and potential cost savings for taxpayers.
Cost Plus Fixed Fee contract type can lead to cost uncertainty and potential overruns if not managed closely.
Specific research outcomes and their direct applicability to defense needs are not detailed, posing a risk of misaligned R&D efforts.

Positive Signals

Award to a reputable research institution like Penn State suggests access to high-caliber expertise and innovation.
The contract duration allows for in-depth research and development in a complex scientific field.
Focus on physical sciences R&D aligns with critical national security and technological advancement goals.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical sciences. This sector is crucial for innovation and maintaining technological superiority for defense applications. Spending in this area is often characterized by long-term investments, specialized expertise, and a high degree of uncertainty regarding outcomes. Comparable spending benchmarks would typically involve other large-scale R&D grants and contracts awarded to universities and research institutions for similar scientific endeavors.

Small Business Impact

This contract does not appear to involve a small business set-aside. As a sole-source award to a large university, there are no direct subcontracting implications for small businesses mentioned in the provided data. The focus is on the university's internal research capabilities.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures would be tied to the achievement of research milestones and adherence to the Cost Plus Fixed Fee agreement. Transparency is facilitated through contract databases, but the specific details of the research and its progress may be subject to security or proprietary considerations.

Related Government Programs

Department of Defense Research and Development Programs
University Research Grants
Physical Sciences Research Initiatives
Naval Research Laboratory Contracts

Risk Flags

Sole-source award may limit cost-effectiveness.
Cost Plus Fixed Fee structure carries inherent cost uncertainty.
Research outcomes are inherently uncertain and may not directly translate to immediate defense applications.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.7 million to THE PENNSYLVANIA STATE UNIVERSITY. VARIANT

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 $18.7 million.

What is the period of performance?

Start: 2023-05-25. End: 2026-05-24.

What is the track record of The Pennsylvania State University in securing and executing similar federal research contracts?

The Pennsylvania State University has a long and extensive history of securing and executing large federal research contracts, particularly with agencies like the Department of Defense, NASA, and the National Science Foundation. As a major research institution, it consistently ranks among the top universities for federal R&D expenditures. Its track record typically involves successful completion of complex research projects across various scientific and engineering disciplines. While specific performance metrics for past contracts are not detailed here, Penn State's established infrastructure, experienced research personnel, and proven ability to manage significant funding make it a reliable partner for federal research endeavors. The university's commitment to research integrity and compliance further supports its strong track record in federal contracting.

How does the $18.6 million award compare to typical federal spending on physical science R&D at universities?

The $18.6 million award to The Pennsylvania State University for physical science R&D is a substantial but not unprecedented figure for a multi-year federal research contract with a major university. Federal agencies, particularly the Department of Defense, invest billions annually in research and development, with a significant portion allocated to universities. Contracts of this magnitude are common for projects requiring specialized equipment, extensive personnel, and multi-year research efforts. For context, top-tier research universities often receive hundreds of millions of dollars in federal R&D funding annually, encompassing a wide array of projects. This specific award represents a focused investment in a particular area of physical sciences, suggesting a strategic priority for the Department of the Navy.

What are the primary risks associated with a sole-source, Cost Plus Fixed Fee research contract?

A sole-source award eliminates the benefits of competition, potentially leading to higher costs than if multiple bids were solicited. The Cost Plus Fixed Fee (CPFF) contract type introduces risks related to cost control. While the 'fixed fee' provides a ceiling for the contractor's profit, the 'cost plus' element means the government reimburses the contractor for allowable costs incurred. If costs escalate beyond initial estimates due to unforeseen research challenges, scope creep, or inefficient management, the total contract value can increase significantly. Effective oversight and rigorous cost monitoring by the government are crucial to mitigate these risks. Additionally, without competition, there's a reduced incentive for the contractor to innovate on cost-saving measures.

What is the expected effectiveness or impact of this research contract on defense capabilities?

The effectiveness and impact of this research contract on defense capabilities are inherently uncertain, as is typical for early-stage R&D. The contract aims to advance knowledge and potentially develop new technologies within the physical sciences. The specific impact will depend on the research outcomes, their successful transition from laboratory to application, and their relevance to evolving defense needs. Potential impacts could range from improved materials, enhanced sensor technologies, novel energy solutions, or advancements in computational physics that underpin future defense systems. The Department of the Navy's decision to award this contract suggests an expectation that the research will yield valuable insights or breakthroughs relevant to its strategic objectives, though the timeline and nature of these benefits remain to be seen.

How does this contract fit into the broader landscape of federal spending on scientific research and development?

This contract represents a specific allocation of federal funds towards scientific research and development, a critical component of national security and technological advancement. The Department of Defense is consistently one of the largest federal funders of R&D, supporting a wide array of scientific disciplines through grants, cooperative agreements, and contracts with universities, non-profits, and industry. This $18.6 million award to Penn State for physical sciences R&D is one piece of a much larger federal R&D investment portfolio. It reflects a strategic decision to invest in foundational scientific exploration that could lead to future technological advantages, complementing other federal R&D efforts in areas like artificial intelligence, cybersecurity, and biotechnology.

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

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: $22,189,322

Exercised Options: $22,189,322

Current Obligation: $18,651,931

Actual Outlays: $131,974

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002418D6401

IDV Type: IDC

Timeline