DoD awards Penn State $21.7M for propulsion research, raising questions on competition and value

Contract Overview

Contract Amount: $21,730,151 ($21.7M)

Contractor: THE Pennsylvania State University

Awarding Agency: Department of Defense

Start Date: 2024-04-24

End Date: 2027-04-23

Contract Duration: 1,094 days

Daily Burn Rate: $19.9K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: SSN (X) PROPULSOR AND SHAFTING SUPPORT FY 23-26

Place of Performance

Location: UNIVERSITY PARK, CENTRE County, PENNSYLVANIA, 16802

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $21.7 million to THE PENNSYLVANIA STATE UNIVERSITY for work described as: SSN (X) PROPULSOR AND SHAFTING SUPPORT FY 23-26 Key points: 1. Contract awarded on a sole-source basis, limiting potential cost savings from competition. 2. Research and Development in Physical, Engineering, and Life Sciences sector. 3. Long-term contract duration of three years suggests significant project scope. 4. Cost-plus-fixed-fee contract type may incentivize cost overruns. 5. Limited transparency on performance metrics and value for money. 6. Focus on advanced propulsion systems indicates strategic importance for the Navy.

Value Assessment

Rating: questionable

The total award of $21.7 million for a three-year research and development effort is substantial. However, without comparable sole-source contracts for similar advanced propulsion research, it is difficult to benchmark the value for money. The cost-plus-fixed-fee structure, while common for R&D, carries inherent risks of cost escalation. Further analysis of the fixed fee and projected costs against deliverables is needed to fully assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of the Navy did not solicit bids from multiple offerors. This approach is typically justified when only one source possesses the necessary specialized capabilities or when urgency precludes a competitive process. The lack of competition means that pricing and innovation may not have been optimized through market forces.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as the benefits of competitive bidding, such as lower prices and improved terms, are forgone.

Public Impact

The primary beneficiary is the Department of the Navy, which will receive advancements in propulsion technology. The contract supports research and development in advanced physical, engineering, and life sciences. The geographic impact is concentrated in Pennsylvania, where The Pennsylvania State University is located. The contract will likely support specialized research personnel and potentially graduate students at the university.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding limits price discovery and potential cost savings.
Cost-plus-fixed-fee contract type can incentivize higher spending.
Limited public information on specific research objectives and expected outcomes.
Long contract duration without clear interim performance reviews could mask inefficiencies.

Positive Signals

Award to a reputable research institution like Penn State suggests access to specialized expertise.
Focus on advanced propulsion is critical for future naval capabilities.
The contract supports domestic R&D, potentially fostering innovation within the US.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. This is a critical area for defense innovation, driving advancements in areas like naval propulsion. The market for specialized R&D services is often characterized by a limited number of highly capable institutions and firms. Benchmarking spending in this niche requires comparison to other government-funded R&D efforts in similar technological domains.

Small Business Impact

This contract does not appear to involve small business set-asides. Given the nature of advanced research and the sole-source award to a large university, subcontracting opportunities for small businesses are unlikely to be a primary focus or requirement of this specific award. The impact on the small business ecosystem is therefore minimal for this contract.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Navy. Accountability measures will likely be tied to the research milestones and deliverables outlined in the contract. Transparency is limited due to the sole-source nature and the proprietary aspects of R&D, but reporting requirements should be detailed in the contract terms. Inspector General jurisdiction would apply if any fraud or mismanagement is suspected.

Related Government Programs

Naval Research Programs
Advanced Propulsion Systems Research
Department of Defense Research and Development
University Research Partnerships

Risk Flags

Sole-source award limits competition.
Cost-plus-fixed-fee contract type carries risk of cost escalation.
Limited public information on performance metrics.
Research and Development contracts can have uncertain outcomes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.7 million to THE PENNSYLVANIA STATE UNIVERSITY. SSN (X) PROPULSOR AND SHAFTING SUPPORT FY 23-26

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 $21.7 million.

What is the period of performance?

Start: 2024-04-24. End: 2027-04-23.

What is the specific technological advancement sought by the Department of the Navy in this propulsion research?

The provided data does not specify the exact technological advancement sought. The contract title, 'SSN (X) PROPULSOR AND SHAFTING SUPPORT FY 23-26,' suggests a focus on improving or developing propulsion systems for a specific class of submarines (SSN(X)). This could encompass areas such as increased efficiency, reduced acoustic signatures, enhanced reliability, or novel power sources. Further details would typically be found in the Statement of Work (SOW) or technical exhibits associated with the contract, which are not publicly available in this dataset.

How does the $21.7 million award compare to historical spending on similar propulsion research by the Navy?

Direct comparison of the $21.7 million award to historical spending on similar propulsion research is challenging without access to detailed historical contract data for comparable projects. The Navy invests significantly in R&D for naval platforms, and propulsion is a critical component. However, the sole-source nature of this award and its specific focus on the SSN(X) program make direct historical comparisons difficult. To provide a meaningful benchmark, one would need to identify previous sole-source or competitively awarded contracts for advanced submarine propulsion R&D, analyze their scope, duration, and total value, and adjust for inflation and technological evolution.

What are the key performance indicators (KPIs) or milestones for this contract, and how will success be measured?

The specific Key Performance Indicators (KPIs) and milestones for this contract are not detailed in the provided data. For a Cost Plus Fixed Fee (CPFF) research and development contract, success is typically measured against the achievement of defined research objectives, technical milestones, and the delivery of specific research outputs (e.g., reports, prototypes, data analysis). The contract's Statement of Work (SOW) would outline these requirements. The fixed fee component implies that the contractor is incentivized to meet these objectives within the estimated cost, but the primary measure of success would be the successful completion of the research tasks as defined by the Navy.

What is The Pennsylvania State University's track record in performing similar Department of Defense research contracts?

The Pennsylvania State University (Penn State) has a well-established and extensive track record of performing research and development contracts for the Department of Defense (DoD) and various military branches, including the Navy. Penn State's Applied Research Laboratory (ARL) is a designated University Affiliated Research Center (UARC) and has a long history of supporting national security missions through advanced research. They have consistently secured and successfully executed numerous complex R&D projects across a wide spectrum of scientific and engineering disciplines, often involving classified or sensitive research areas, including propulsion and materials science.

Given the sole-source nature, what justification was provided for not competing this contract?

The provided data indicates the contract was 'NOT COMPETED,' which implies a sole-source justification was utilized. Common justifications for sole-source awards in R&D include: (1) the unique capabilities or specialized knowledge possessed by a single source (like a university with specific research expertise), (2) the urgency of the requirement where competition is not feasible, or (3) the need to maintain continuity of research or development where a specific contractor has unique knowledge of prior work. For a university like Penn State, the justification likely centers on their unique expertise, facilities, and established research programs relevant to advanced propulsion systems, potentially making them the only viable source capable of meeting the Navy's specific technical requirements within the desired timeframe.

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: $55,838,904

Exercised Options: $55,838,904

Current Obligation: $21,730,151

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