DoD awards Montana State University $39.3M for R&D, raising questions on value and competition

Contract Overview

Contract Amount: $39,292,692 ($39.3M)

Contractor: Montana State University

Awarding Agency: Department of Defense

Start Date: 2018-10-01

End Date: 2029-09-30

Contract Duration: 4,017 days

Daily Burn Rate: $9.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: R&D

Official Description: MSU - COST CONTRACT

Place of Performance

Location: BOZEMAN, GALLATIN County, MONTANA, 59717

State: Montana Government Spending

Plain-Language Summary

Department of Defense obligated $39.3 million to MONTANA STATE UNIVERSITY for work described as: MSU - COST CONTRACT Key points: 1. Contract awarded on a cost-plus-no-fee basis, which can incentivize higher spending. 2. Sole-source award limits opportunities for competitive pricing and innovation. 3. Long contract duration (nearly 11 years) may not align with evolving research needs. 4. Research area (541715) is broad, making specific performance benchmarks difficult to establish. 5. No small business set-aside indicates potential missed opportunities for smaller innovative firms. 6. High contract value warrants scrutiny for cost-effectiveness and necessity.

Value Assessment

Rating: questionable

The contract's cost-plus-no-fee structure, while common in R&D, offers limited incentive for cost control. Benchmarking this specific R&D effort is challenging due to its specialized nature and the lack of publicly available comparable contracts. The absence of a fixed price or performance-based elements makes assessing value for money difficult without detailed cost breakdowns and progress reports. The total obligated amount of $39.3M over nearly 11 years suggests a significant investment, requiring robust justification for its cost-effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded sole-source, meaning it was not competed. The justification for a sole-source award is not provided in the data, which is a significant concern. This lack of competition means that the Department of Defense did not explore potential alternative solutions or pricing from other qualified entities. Without a competitive process, it is difficult to ascertain if the government received the best possible price and terms.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings typically achieved through competitive bidding. This can lead to higher overall spending for government research initiatives.

Public Impact

The primary beneficiary is Montana State University, which receives significant funding for its research activities. The contract supports research and development in physical, engineering, and life sciences, potentially leading to advancements in defense technologies. The geographic impact is primarily within Montana, supporting local research infrastructure and potentially creating or sustaining high-skilled jobs. The contract's long duration suggests a sustained effort in a specific research area, contributing to the university's long-term research capacity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings.
Cost-plus-no-fee structure may not adequately incentivize cost efficiency.
Long contract duration could lead to outdated research objectives or scope creep.
Lack of competition raises concerns about whether the most innovative or cost-effective solutions were considered.

Positive Signals

Supports a key research institution (Montana State University) in critical R&D areas.
Long-term funding can foster deep expertise and sustained progress in complex research fields.
Potential for significant technological advancements benefiting national security.

Sector Analysis

The contract falls under the Research and Development sector, specifically within scientific research services. This category often involves significant investment and long lead times. The market for specialized R&D services is diverse, with universities and private firms playing key roles. Benchmarking is difficult as R&D projects are highly specific, but the value suggests a substantial, potentially foundational research effort. The Department of Defense is a major funder of R&D, seeking advancements in areas critical to national security.

Small Business Impact

The contract data indicates that this was not a small business set-aside, nor does it appear to involve significant subcontracting to small businesses based on the available information. This means that opportunities for small businesses to participate in or benefit from this substantial R&D funding were likely limited. The focus on a large university award suggests a strategy prioritizing established research institutions over broader small business engagement for this specific project.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the Department of the Army's contracting officer representatives (CORs) and program managers. Regular progress reports and financial reviews are expected. However, the sole-source nature and cost-plus structure necessitate particularly diligent oversight to ensure funds are used appropriately and research objectives are met. Transparency could be enhanced by making the justification for the sole-source award publicly accessible.

Related Government Programs

Department of Defense Research and Development Contracts
University Research Grants
Scientific Research Services Contracts
Cost-Plus Contracts
Sole-Source Research Awards

Risk Flags

Sole-source award without clear justification.
Cost-plus-no-fee structure may lack cost control incentives.
Long contract duration potentially leading to outdated research.
Lack of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.3 million to MONTANA STATE UNIVERSITY. MSU - COST CONTRACT

Who is the contractor on this award?

The obligated recipient is MONTANA STATE 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 $39.3 million.

What is the period of performance?

Start: 2018-10-01. End: 2029-09-30.

What is the specific research objective of this $39.3M contract awarded to Montana State University?

The contract, identified under NAICS code 541715, covers 'Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)'. While the broad category is defined, the specific research objectives are not detailed in the provided data. Typically, such contracts would outline specific scientific questions, experimental designs, and expected outcomes. Without access to the contract's statement of work, it's impossible to determine the precise nature of the research being funded, such as advancements in materials science, energy, or other physical and life sciences relevant to defense applications.

Why was this contract awarded sole-source instead of being competed?

The provided data does not include the justification for the sole-source award. Generally, sole-source awards are justified when only one responsible source is available or capable of meeting the government's needs. This could be due to unique capabilities, proprietary technology, or specific expertise held by Montana State University that cannot be replicated by other institutions or firms. However, without the official justification document, it remains unclear if these criteria were met or if other factors influenced the decision to forgo competition, potentially impacting cost-effectiveness for taxpayers.

How does the cost-plus-no-fee (CPNF) contract type compare to other R&D contract structures in terms of value for money?

Cost-plus-no-fee (CPNF) contracts reimburse the contractor for allowable costs but provide no fee or profit. This structure is often used in R&D where the scope is uncertain and innovation is paramount, as it encourages exploration without the contractor bearing financial risk for cost overruns. However, it offers minimal incentive for cost control compared to fixed-price contracts or cost-plus-incentive-fee (CPIF) contracts, which include performance targets and potential award fees. While CPNF can facilitate cutting-edge research, it requires stringent oversight to ensure costs remain reasonable and aligned with research goals, potentially offering less value for money if not managed effectively.

What are the potential risks associated with the long contract duration (nearly 11 years)?

A contract duration of nearly 11 years (October 1, 2018, to September 30, 2029) for R&D presents several risks. Firstly, scientific and technological landscapes can change rapidly; research objectives defined at the outset may become obsolete or less relevant over time. Secondly, long-term funding can sometimes lead to complacency or a lack of urgency in achieving milestones. Thirdly, managing such a lengthy contract requires sustained oversight and adaptation, increasing administrative burden. Finally, it ties up significant funds for an extended period, potentially limiting flexibility to redirect resources to more promising or emergent research areas that arise during the contract's term.

What is the historical spending pattern for Montana State University with the Department of Defense?

The provided data only details this single contract award of $39.3 million to Montana State University by the Department of the Army. It does not offer historical spending data for MSU with the DoD or other agencies. To assess historical spending patterns, one would need to analyze broader federal procurement databases for previous contracts, grants, or awards issued to Montana State University. This would help determine if this award represents a significant increase or continuation of prior funding relationships and establish a baseline for evaluating future spending.

How does the research area (NAICS 541715) align with current Department of Defense priorities?

NAICS 541715 covers 'Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)'. This broad category aligns well with the Department of Defense's continuous need for advancements in areas such as materials science, energy, aerospace, cybersecurity, and advanced manufacturing, which are crucial for maintaining technological superiority. The DoD actively funds research in these domains to develop next-generation capabilities, enhance existing systems, and address emerging threats. Therefore, R&D in these physical, engineering, and life sciences is a core priority for the DoD's long-term strategic goals.

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

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 307 MONTANA HALL, BOZEMAN, MT, 59717

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: $39,292,692

Exercised Options: $39,292,692

Current Obligation: $39,292,692

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $29,994

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline