DoD awards $3.98M contract for research and development to Penn State University

Contract Overview

Contract Amount: $3,978,246 ($4.0M)

Contractor: THE Pennsylvania State University

Awarding Agency: Department of Defense

Start Date: 2024-04-23

End Date: 2026-09-30

Contract Duration: 890 days

Daily Burn Rate: $4.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: MEGALODON II LABOR, ODCS AND TRAVEL

Place of Performance

Location: UNIVERSITY PARK, CENTRE County, PENNSYLVANIA, 16802

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $4.0 million to THE PENNSYLVANIA STATE UNIVERSITY for work described as: MEGALODON II LABOR, ODCS AND TRAVEL Key points: 1. Contract awarded to a single, well-established research institution. 2. Focus on physical, engineering, and life sciences R&D. 3. Contract duration extends over two years. 4. Cost-plus-fixed-fee structure allows for flexibility in research. 5. Potential for follow-on work based on research outcomes. 6. Geographic concentration of work in Pennsylvania.

Value Assessment

Rating: fair

The contract value of $3.98 million for a two-year research and development effort appears reasonable given the specialized nature of R&D and the recipient's institutional capacity. Benchmarking against similar large-scale R&D contracts awarded to universities by the Department of Defense is challenging without more specific details on the research scope. However, the cost-plus-fixed-fee structure suggests that the government is willing to cover actual costs plus a predetermined profit, which can be advantageous for complex research where exact costs are difficult to predict. The value-for-money will ultimately depend on the successful outcomes of the research.

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. This approach is often used when a specific entity possesses unique capabilities, intellectual property, or a pre-existing relationship essential for the project. In this case, The Pennsylvania State University likely has specialized facilities, expertise, or prior involvement that made it the only viable option for this particular research and development effort. The lack of competition means there was no opportunity for price discovery through a bidding process.

Taxpayer Impact: Sole-source awards can limit opportunities for taxpayers to benefit from competitive pricing. However, if the chosen contractor is uniquely qualified, the specialized research may yield significant long-term benefits that outweigh the lack of competitive pressure.

Public Impact

Benefits The Pennsylvania State University's research departments and affiliated faculty. Advances scientific knowledge in physical, engineering, and life sciences. Potential for new technologies or methodologies to emerge from the research. Workforce implications include support for researchers, technicians, and students. Geographic impact is primarily within Pennsylvania, where the university is located.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs than a competed award.
Research outcomes are uncertain and may not yield desired results.
Sole-source nature limits opportunities for other institutions or businesses.

Positive Signals

Award to a reputable university with established research capabilities.
Cost-plus-fixed-fee structure allows for flexibility in research execution.
Contract duration provides stability for research planning and execution.

Sector Analysis

The contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences. This is a critical area for defense innovation, aiming to develop new technologies and scientific understanding. The market for university-led R&D contracts is competitive, with many institutions vying for federal funding. However, specific, highly specialized research areas often lead to sole-source awards to institutions with unique expertise. Comparable spending benchmarks for large-scale university R&D contracts can vary widely based on the scientific discipline and project scope.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the sole-source nature and the recipient being a large university, there are no direct subcontracting implications for small businesses stemming from this award. The focus is on institutional research capabilities rather than broad service delivery where small business participation is typically mandated.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army's contracting and research offices. The cost-plus-fixed-fee structure necessitates careful monitoring of expenditures to ensure costs are reasonable and allocable to the contract. Performance reviews will assess progress against research objectives. Transparency may be limited due to the proprietary nature of R&D, but periodic reporting requirements should provide insight into project status.

Related Government Programs

Department of Defense Research and Development Programs
National Science Foundation Research Grants
University Research Partnerships with Federal Agencies

Risk Flags

Sole-source award may limit competitive pricing.
R&D outcomes are inherently uncertain.
Contract type (CPFF) requires diligent cost oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $4.0 million to THE PENNSYLVANIA STATE UNIVERSITY. MEGALODON II LABOR, ODCS AND TRAVEL

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 Army).

What is the total obligated amount?

The obligated amount is $4.0 million.

What is the period of performance?

Start: 2024-04-23. End: 2026-09-30.

What is the specific research area or objective of this contract?

The contract, identified as MEGALODON II LABOR, ODCS AND TRAVEL, is for Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology), with the North American Industry Classification System (NAICS) code 541715. While the specific research topic is not detailed in the provided data, the NAICS code indicates a broad scope within these scientific domains. The Department of the Army is the awarding agency, suggesting the research may be aligned with defense-related applications or advancements in foundational scientific knowledge pertinent to national security. Further details on the Statement of Work (SOW) would be required to ascertain the precise research objectives and expected deliverables.

How does the $3.98 million award compare to typical R&D funding for The Pennsylvania State University?

The Pennsylvania State University is a major research institution that consistently ranks among the top universities for federal R&D expenditures. In fiscal year 2022, for example, Penn State reported over $1 billion in total research expenditures, with a significant portion coming from federal sources. A single contract of $3.98 million, while substantial, represents a relatively small fraction of the university's overall R&D portfolio. However, for specific projects within the physical, engineering, and life sciences, this award could be a significant funding source, enabling dedicated research teams and resources over its 890-day duration. The value is consistent with the scale of many large, specialized research grants awarded to leading academic institutions.

What are the potential risks associated with a sole-source R&D contract of this nature?

The primary risk associated with a sole-source R&D contract is the lack of competitive pressure, which could potentially lead to higher costs than if the contract were competed. There is also the risk that the chosen contractor, despite their expertise, may not be the most innovative or efficient solution available. For R&D specifically, there's an inherent risk that the research may not yield the desired outcomes or breakthroughs, regardless of the contractor's capabilities or the contract's value. Furthermore, sole-source awards can limit opportunities for other qualified entities to participate and demonstrate their capabilities, potentially hindering broader ecosystem development.

What is the significance of the 'Cost Plus Fixed Fee' (CPFF) contract type for this R&D effort?

The Cost Plus Fixed Fee (CPFF) contract type is common for research and development efforts where the scope of work is not precisely defined at the outset, or where innovation and exploration are key objectives. Under a CPFF contract, the contractor is reimbursed for all allowable costs incurred during the performance of the contract, plus a predetermined fixed fee representing profit. This structure incentivizes the contractor to control costs, as the fee remains constant regardless of the actual costs incurred. For the government, it provides flexibility to adapt research directions as discoveries are made, while managing the overall profit margin. This is often seen as a balanced approach for complex, uncertain R&D projects.

What are the implications of the contract's end date (September 30, 2026) for ongoing research?

The contract's end date of September 30, 2026, establishes a clear timeline for the research activities. With a start date of April 23, 2024, this provides approximately 890 days for The Pennsylvania State University to conduct its research and development. This duration is generally sufficient for many R&D projects, allowing for planning, execution, analysis, and reporting. However, the fixed end date also means that if the research is highly promising and requires further investigation or development beyond this period, additional funding and contract modifications or new awards would be necessary. The government will need to assess the progress and outcomes by this date to determine future 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: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

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: $10,000,000

Exercised Options: $4,823,229

Current Obligation: $3,978,246

Actual Outlays: $47,462

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91CRB23D0005

IDV Type: IDC

Timeline