Department of Defense renews SEI contract for $1.73B

The United States Department of Defense renewed its contract with the Carnegie Mellon Software Engineering Institute (SEI) this summer for $1.73 billion. This is over twice the value of the previous contract agreement the SEI made with the government over five years ago.

As per the school’s part of the agreement, the SEI will provide crucial services to the United States government. The institute will research ways to increase the reliability and security of government software systems. Paul Nielsen, SEI CEO, said in a university press release that “Our new contract guarantees that the SEI can continue to develop breakthrough technologies in collaboration with Carnegie Mellon University, the Department of Defense, and our industry partners.”

This contract renewal may come as a relief, as the past few years, Carnegie Mellon has experienced problems with funding. “Like many colleges and universities, we faced the government shutdown, decreasing federal funding due to the sequestration and rising costs associated with growth and expansion,” Chief Financial Officer Amir Rahnamay-Azar said in his 2014 fiscal report for the university. Azar continued by noting that even bringing in more talented individuals has become a challenge, as the current higher education hiring climate is extremely competitive.

Last year’s fiscal shortages motivated University President Dr. Subra Suresh to raise money for the university, including by way of government contracts. In addition to these contracts, among which is a small one with the Federal Highway Administration, Suresh has also announced several large donations by private companies and alumni in the past year. Most notably, David A. Tepper is working with the university to create a new campus quadrangle for the business school in what is now the Morewood Gardens parking lot.

This research initiative with the U.S. government more than doubles the total fiscal support Carnegie Mellon received via sponsored projects. With an investment this large, the U.S. government is publicly endorsing Carnegie Mellon’s importance as an innovator and top research institution. The amount of the contract is high enough that the SEI is now an approved Federally Funded Research and Development Center. The SEI shares this designation with 40 other research and development institutions in the United States.

According to Rahnamay-Azar, the SEI “saw significant revenue growth ($62.3 million for fiscal year 2005 compared to $123.4 million for fiscal year 2014) largely from the Department of Homeland Security.”
The Department of Defense dramatic increase in funding demonstrates the importance of software technologies to the U.S. government, even more relevant after recent hacks from China, and a continuing chain of attacks from foreign countries.