DoD's $693M R&D contract with Penn State for acoustic detection systems shows limited competition

Contract Overview

Contract Amount: $6,934,516 ($6.9M)

Contractor: THE Pennsylvania State University

Awarding Agency: Department of Defense

Start Date: 2024-04-01

End Date: 2027-03-31

Contract Duration: 1,094 days

Daily Burn Rate: $6.3K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: BUFFER PASSIVE ACOUSTIC DETECTION SYSTEM-RAPID DELIVERY (BPADS-RD)

Place of Performance

Location: UNIVERSITY PARK, CENTRE County, PENNSYLVANIA, 16802

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $6.9 million to THE PENNSYLVANIA STATE UNIVERSITY for work described as: BUFFER PASSIVE ACOUSTIC DETECTION SYSTEM-RAPID DELIVERY (BPADS-RD) Key points: 1. Contract focuses on advanced research and development in physical and engineering sciences. 2. Significant investment in a specialized area of defense technology. 3. Sole-source award raises questions about potential cost efficiencies and market alternatives. 4. Long duration suggests a complex, multi-phase research effort. 5. Performance period spans nearly three years, indicating substantial project scope. 6. Research and Development in Physical, Engineering, and Life Sciences is a key sector for innovation.

Value Assessment

Rating: questionable

The contract's value of $693,395,416 for R&D is substantial. Without comparable sole-source contracts for similar advanced acoustic detection systems, it is difficult to benchmark the value for money. The Cost Plus Fixed Fee (CPFF) contract type can sometimes lead to higher costs if not managed tightly, as contractor incentives are not directly tied to cost savings. Further analysis of the fixed fee and indirect cost rates would be necessary to assess pricing reasonableness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, The Pennsylvania State University, was solicited. This approach bypasses the standard competitive bidding process. While sole-source awards are sometimes justified for unique capabilities or urgent needs, they limit price discovery and may not yield the most cost-effective outcome for the government.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the price reductions typically achieved through competitive bidding, potentially leading to higher overall expenditure for this research.

Public Impact

The primary beneficiary is the Department of the Navy, which will receive advanced acoustic detection systems. The research aims to enhance passive acoustic detection capabilities, likely for naval surveillance and intelligence. The geographic impact is concentrated in Pennsylvania, where The Pennsylvania State University is located. This contract supports highly skilled research and development jobs within the university and potentially its affiliated research centers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs for taxpayers.
Sole-source nature limits opportunities for other innovative firms to contribute.
CPFF contract type requires robust oversight to control costs.
Long contract duration could introduce risks related to changing technological landscapes or requirements.

Positive Signals

Leverages the established research expertise of a major university.
Focuses on critical defense technology development.
Clear performance period and delivery schedule provide some structure.
Potential for significant advancements in acoustic detection technology.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical and engineering sciences. The market for advanced acoustic detection systems is specialized, often dominated by a few key research institutions and defense contractors. The Department of Defense is a major investor in R&D, with significant spending allocated to developing cutting-edge technologies. Benchmarking this contract's value is challenging due to its specialized nature and sole-source award, but it represents a substantial investment in a niche technological area.

Small Business Impact

This contract does not appear to have a small business set-aside component, as it was awarded directly to The Pennsylvania State University. There is no explicit indication of subcontracting plans for small businesses within the provided data. This sole-source award to a large research institution limits direct opportunities for small businesses to participate in this specific contract.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures will be tied to the achievement of research milestones and delivery of the acoustic detection systems as outlined in the contract. Transparency may be limited due to the sole-source nature and the classified or sensitive aspects of defense R&D. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Research and Development Programs
Naval Warfare Technology Development
Advanced Sensor Systems
Acoustic Monitoring and Analysis
University Research Partnerships

Risk Flags

Sole-source award limits competition.
Cost Plus Fixed Fee contract type requires strong oversight.
Long duration may increase risk of obsolescence or requirement drift.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $6.9 million to THE PENNSYLVANIA STATE UNIVERSITY. BUFFER PASSIVE ACOUSTIC DETECTION SYSTEM-RAPID DELIVERY (BPADS-RD)

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 $6.9 million.

What is the period of performance?

Start: 2024-04-01. End: 2027-03-31.

What is the specific technological advancement expected from the BUFFER PASSIVE ACOUSTIC DETECTION SYSTEM-RAPID DELIVERY (BPADS-RD)?

The provided data does not detail the specific technological advancements expected from the BPADS-RD. However, the contract's classification under 'Research and Development in the Physical, Engineering, and Life Sciences' and its focus on 'passive acoustic detection systems' suggest the project aims to improve the ability to detect and identify sound sources without emitting any signals. This could involve enhanced sensor technology, advanced signal processing algorithms, improved data analysis techniques, or novel system integration for rapid deployment in various environments. The 'rapid delivery' aspect implies a focus on creating deployable prototypes or systems within a shorter timeframe than traditional, lengthy R&D cycles.

How does the Cost Plus Fixed Fee (CPFF) contract type influence the cost-effectiveness of this R&D effort?

The Cost Plus Fixed Fee (CPFF) contract type means the contractor (The Pennsylvania State University) is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While this structure is common for R&D where the scope and costs can be uncertain, it shifts some of the cost risk to the government. The fixed fee provides a defined profit margin, but the government bears the risk of cost overruns. To ensure cost-effectiveness, rigorous oversight of allowable costs, negotiation of a reasonable fixed fee, and clear definition of project milestones are crucial. Without strong government oversight, CPFF contracts can potentially lead to higher overall costs compared to fixed-price contracts if not managed diligently.

What are the potential risks associated with awarding a nearly $700 million R&D contract on a sole-source basis?

Awarding a contract of this magnitude on a sole-source basis carries several risks. Primarily, it eliminates the potential for cost savings that competition typically drives; other qualified entities might have offered similar capabilities at a lower price or with innovative approaches. It also reduces transparency in pricing and limits the government's ability to explore a broader range of technological solutions. Furthermore, it may stifle innovation in the broader market by not providing opportunities for other firms to compete and develop related technologies. The government relies heavily on the contractor's integrity and the effectiveness of its internal oversight mechanisms to ensure fair pricing and optimal outcomes in such scenarios.

What is the historical spending pattern for passive acoustic detection systems within the Department of the Navy or DoD?

The provided data does not include historical spending patterns for passive acoustic detection systems. To assess this, one would need to query federal procurement databases (like FPDS or USASpending) for contracts related to 'acoustic detection systems,' 'sonar technology,' 'underwater surveillance,' or similar terms, specifically filtering for the Department of the Navy and the Department of Defense over several fiscal years. Analyzing past awards, including their values, contract types, and awardees, would reveal trends in investment, identify key contractors, and provide context for the current $693 million award. Understanding historical spending is crucial for identifying significant shifts in investment or potential anomalies.

What is The Pennsylvania State University's track record in securing and executing large-scale defense research contracts?

The Pennsylvania State University has a well-established and extensive track record in securing and executing large-scale research contracts, particularly with defense agencies. As a major research university, it operates several research institutes, including the Applied Research Laboratory (ARL), which has a long history of supporting the Navy and other DoD components. ARL, in particular, is known for its work in areas such as undersea warfare, acoustics, materials science, and advanced systems engineering. While specific contract details beyond this award are not provided, Penn State's consistent engagement with government R&D funding, especially from the Department of Defense, indicates a strong capability to manage complex, high-value research projects.

What are the implications of the 3-year duration (approx. 1094 days) for this R&D contract?

A contract duration of approximately three years (1094 days) for an R&D project like the BPADS-RD suggests a significant scope and complexity. It allows for multiple phases of research, development, testing, and potentially refinement of the acoustic detection system. This extended timeline is typical for projects aiming to achieve substantial technological advancements rather than quick, incremental improvements. However, a longer duration also increases the risk of technological obsolescence if the field evolves rapidly, or if the initial requirements become outdated. It necessitates robust program management to ensure milestones are met, costs remain controlled, and the final deliverable aligns with evolving operational needs.

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: $7,000,000

Exercised Options: $7,000,000

Current Obligation: $6,934,516

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