DoD's $31.1M R&D contract with Michigan Tech focuses on material solutions for survivability and mobility

Contract Overview

Contract Amount: $31,132,559 ($31.1M)

Contractor: Michigan Technological University

Awarding Agency: Department of Defense

Start Date: 2019-03-22

End Date: 2026-01-30

Contract Duration: 2,506 days

Daily Burn Rate: $12.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: R&D

Official Description: NEW FOLLOW-ON CONTRACT EFFORT: THE WORK DIRECTIVES ISSUED HEREUNDER SHALL INVOLVE RESEARCH AND DEVELOPMENT EFFORTS ON VARIOUS ASPECTS RELATED TO SURVIVABILITY, ASSURED MOBILITY, AND MANEUVER SUPPORT MATERIAL SOLUTIONS.

Place of Performance

Location: HOUGHTON, HOUGHTON County, MICHIGAN, 49931

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $31.1 million to MICHIGAN TECHNOLOGICAL UNIVERSITY for work described as: NEW FOLLOW-ON CONTRACT EFFORT: THE WORK DIRECTIVES ISSUED HEREUNDER SHALL INVOLVE RESEARCH AND DEVELOPMENT EFFORTS ON VARIOUS ASPECTS RELATED TO SURVIVABILITY, ASSURED MOBILITY, AND MANEUVER SUPPORT MATERIAL SOLUTIONS. Key points: 1. Contract focuses on advanced material solutions for defense applications. 2. Research and Development (R&D) in physical, engineering, and life sciences. 3. Long-term contract duration of approximately 2506 days. 4. No small business set-aside, indicating a focus on specialized capabilities. 5. Contract type is Cost No Fee, suggesting risk is borne by the government. 6. Geographic focus on Michigan for this R&D effort.

Value Assessment

Rating: fair

The contract's 'Cost No Fee' structure places the financial risk on the government, which is common for R&D where outcomes are uncertain. Benchmarking value is difficult without specific deliverables and comparable R&D projects. The pricing structure suggests that the government will reimburse allowable costs up to a ceiling, but the ultimate value depends on the success of the research.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This approach is often used when a specific entity possesses unique expertise or capabilities essential for the research. The lack of competition means there was no opportunity for price discovery through bidding, potentially leading to higher costs than a competed contract.

Taxpayer Impact: Taxpayers may not receive the best possible price due to the absence of competitive bidding. The justification for a sole-source award needs to be robust to ensure funds are used efficiently.

Public Impact

The Department of Defense benefits from advancements in material science for military applications. Research aims to improve the survivability and mobility of military assets. The contract supports R&D activities within Michigan. Potential for advancements that could enhance soldier safety and operational effectiveness. Workforce implications include specialized R&D roles at Michigan Technological University.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential for innovation from a broader market.
Cost No Fee structure places all financial risk on the government for R&D outcomes.
Lack of transparency on specific R&D milestones and deliverables makes value assessment challenging.
Long contract duration without clear interim performance metrics could lead to cost overruns if not managed closely.

Positive Signals

Focus on critical R&D areas like survivability and mobility addresses key defense needs.
Leverages specialized research capabilities of an academic institution (Michigan Technological University).
Potential for significant technological advancements that could provide a strategic advantage.
Clear alignment with the Department of the Army's research objectives.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The market for defense-related R&D is characterized by long-term investments, specialized expertise, and significant government funding. Comparable spending benchmarks are difficult to establish without knowing the specific research areas and their novelty, but R&D contracts can range from millions to billions depending on scope and duration.

Small Business Impact

The contract indicates no small business set-aside (ss: false) and no indication of subcontracting to small businesses (sb: false). This suggests the primary contractor, Michigan Technological University, is expected to perform the work directly or through its own resources. The absence of small business involvement means limited direct benefit to the small business ecosystem for this specific contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and research oversight mechanisms. Accountability measures would be tied to the achievement of R&D milestones and adherence to the cost ceiling. Transparency may be limited due to the nature of classified or sensitive research, but periodic reporting and reviews are standard. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Research and Development Programs
Army Material Command Research Initiatives
Advanced Materials Research
Defense Survivability Research
Military Mobility Research

Risk Flags

Sole-source award may limit cost-effectiveness.
Cost No Fee structure places all financial risk on the government.
Long contract duration increases risk of obsolescence or shifting priorities.
Lack of specific performance metrics makes value assessment difficult.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.1 million to MICHIGAN TECHNOLOGICAL UNIVERSITY. NEW FOLLOW-ON CONTRACT EFFORT: THE WORK DIRECTIVES ISSUED HEREUNDER SHALL INVOLVE RESEARCH AND DEVELOPMENT EFFORTS ON VARIOUS ASPECTS RELATED TO SURVIVABILITY, ASSURED MOBILITY, AND MANEUVER SUPPORT MATERIAL SOLUTIONS.

Who is the contractor on this award?

The obligated recipient is MICHIGAN TECHNOLOGICAL UNIVERSITY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $31.1 million.

What is the period of performance?

Start: 2019-03-22. End: 2026-01-30.

What is the specific track record of Michigan Technological University in securing and executing similar large-scale defense R&D contracts?

Michigan Technological University has a history of engaging in research and development, often in partnership with government agencies. While specific details on past defense R&D contracts of this magnitude are not provided in the data, universities like MTU typically have established research centers and faculty with expertise in areas relevant to defense needs. Their track record would be assessed based on publications, patents, previous government grants, and successful project completions. A deeper dive would involve reviewing their past performance reports and any publicly available information on their research output in physical sciences and engineering.

How does the 'Cost No Fee' contract type impact the government's financial exposure and the contractor's incentive for cost control?

The 'Cost No Fee' (CNF) contract type means the government agrees to reimburse the contractor for all allowable costs incurred in performing the contract, but the contractor receives no fee or profit. This structure is typically used for research and development efforts where the outcome is highly uncertain, and the primary goal is to achieve a specific technical objective rather than to manage costs tightly. For the government, it means full financial exposure to the costs of the R&D, with the risk of cost overruns if the research proves more complex or time-consuming than anticipated. For the contractor, the incentive is primarily driven by the desire to successfully complete the research and potentially secure future work, rather than by direct financial gain from cost savings on this specific contract.

What are the key performance indicators (KPIs) or milestones used to measure the success of this R&D effort?

Specific Key Performance Indicators (KPIs) and milestones for this R&D contract are not detailed in the provided data. However, for research and development contracts, success is typically measured against technical objectives. This could include the successful development of new materials with specific properties (e.g., strength, weight, resistance), the demonstration of prototypes, the validation of theoretical models, or the publication of research findings. The 'Cost No Fee' structure implies that the government is primarily interested in the technical outcome. Performance would likely be assessed through regular technical reviews, progress reports, and the final delivery of research results that meet the defined technical requirements.

What is the historical spending pattern for similar R&D efforts within the Department of the Army or Department of Defense?

Historical spending on similar R&D efforts within the Department of the Army and the broader Department of Defense is substantial and spans various scientific and engineering disciplines. The NAICS code 541715 ('Research and Development in the Physical, Engineering, and Life Sciences') covers a wide array of activities. Annual R&D spending by the DoD often runs into the tens of billions of dollars, supporting advancements in areas like materials science, aerospace, cybersecurity, and artificial intelligence. Contracts can vary significantly in value, from smaller, targeted research grants to multi-billion dollar programs. This specific $31.1 million contract represents a moderate investment within the vast DoD R&D portfolio, focused on specific material solutions.

Are there any potential risks associated with the long duration (2506 days) of this R&D contract?

Yes, a long contract duration of approximately 2506 days (nearly 7 years) for an R&D effort carries several potential risks. Firstly, the technological landscape can change rapidly; research priorities might shift, or new, more effective technologies could emerge, potentially rendering the current research obsolete before completion. Secondly, maintaining consistent focus and motivation from the research team over such an extended period can be challenging. Thirdly, the 'Cost No Fee' structure, combined with a long duration, increases the government's financial exposure, as costs can accumulate over many years without the contractor having a direct profit incentive to expedite or control them. Finally, managing and overseeing such a long-term project requires sustained effort and adaptability from the contracting agency.

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 › OTHER RESEARCH/DEVELOPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W56HZV18R0120

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 1400 TOWNSEND DR, HOUGHTON, MI, 49931

Business Categories: Category Business, Educational Institution, Government, Higher Education, U.S. National Government, Not Designated a Small Business, Higher Education (Public), U.S. Regional/State Government

Financial Breakdown

Contract Ceiling: $31,132,559

Exercised Options: $31,132,559

Current Obligation: $31,132,559

Actual Outlays: $225,085

Subaward Activity

Number of Subawards: 25

Total Subaward Amount: $11,052,665

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline