Carnegie Mellon University (CMU) was awarded a $732 million contract to continue to operate the Software Engineering Institute (SEI), a federally-funded research and development center (FFRDC), the Air Force said July 27.

The indefinite-delivery/indefinite-quantity contract was awarded as a sole-source acquisition for a five-year term with $500,000 in fiscal year 2015 research, development, test, and evaluation (RDT&E) funds obligated at the time of award.

The contract has an option for an additional five years, which if enacted would raise the price as high as $1.73 billion, CMU noted.

FFRDCs operate as independent, nonprofit entities that are sponsored and funded by the U.S. government to address long-term complex problems, analyze technical questions and provide creative and cost-effective solutions to government problems. They ensure objectivity by also being prohibited from manufacturing projects, competing with industry, or working with commercial companies.

SEI is the only federally-funded research and development center (FFRDC) that focuses on software-related security and engineering issues, the university explained in a statement.

Established in 1984, “SEI has pursued research, development and demonstration, collaboration, and transition objectives that address pervasive and significant problems that impede the ability of organizations to acquire, develop, operate, and sustain software systems that are innovative, affordable, trustworthy and enduring.”

The university said SEI also works with organizations to make improvements in their software engineering and cybersecurity capabilities by providing technical leadership.

“It is an honor for CMU to be selected to manage the government’s research and development center for software engineering and cybersecurity at such a critical time for this work. CMU’s expertise in securing systems and combating cyber attacks is a university-wide strength across SEI and various academic units, and this work is becoming increasingly important not only for national defense but also for individual citizens, critical infrastructure, and commercial enterprises,” Subra Suresh, Carnegie Mellon University president, said in a statement.

“Together, CMU and the SEI will support the missions of our nation’s defense and civilian agencies and collaborate with industry partners to advance and transition innovative technologies,” Farnam Jahanian, the CMU provost, added.

“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. It also ensures that hundreds of excellent technology jobs remain in Pittsburgh for the foreseeable future, and that the SEI will continue to be a high-tech anchor for the region,” Paul Nielsen, SEI director and CEO, said.

The Air Force Life Cycle Management Center at Hanscom AFB, Mass. is the contracting activity.