VA awards $17.4M sole-source contract to MITRE for IT supply chain modernization analysis

Contract Overview

Contract Amount: $17,393,823 ($17.4M)

Contractor: THE Mitre Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-09-29

End Date: 2025-09-28

Contract Duration: 1,095 days

Daily Burn Rate: $15.9K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: FEDERALLY FUNDED RESEARCH AND DEVELOPMENT CENTER FOR THE OFFICE OF INFORMATION & TECHNOLOGY (OIT) FOR SUPPLY CHAIN MODERNIZATION (SCM) INITIATIVES ANALYSIS

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20002

State: District of Columbia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $17.4 million to THE MITRE CORPORATION for work described as: FEDERALLY FUNDED RESEARCH AND DEVELOPMENT CENTER FOR THE OFFICE OF INFORMATION & TECHNOLOGY (OIT) FOR SUPPLY CHAIN MODERNIZATION (SCM) INITIATIVES ANALYSIS Key points: 1. Contract focuses on critical IT supply chain modernization for the VA. 2. Sole-source award to MITRE Corporation raises questions about competition and potential cost savings. 3. Long contract duration of 1095 days suggests a significant, ongoing need for analysis. 4. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not managed carefully. 5. Analysis of this contract is crucial for understanding value for money in specialized IT services. 6. The VA's reliance on a single FFRDC for this analysis warrants scrutiny of alternatives. 7. Performance context is key to understanding the impact of this specialized analytical support.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its specialized nature and sole-source award to a Federally Funded Research and Development Center (FFRDC). FFRDCs often have unique capabilities and established relationships, which can justify higher costs. However, without competitive bidding, it's difficult to assess if the pricing reflects market rates for similar analytical services. The Cost Plus Fixed Fee structure requires careful oversight to ensure costs remain reasonable and aligned with the fixed fee.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis to The MITRE Corporation, a designated FFRDC. This indicates that the VA determined MITRE possessed unique capabilities or expertise essential for the supply chain modernization initiatives analysis that could not be met by other sources. The lack of competition means there was no opportunity for price discovery through a bidding process, potentially leading to a higher cost than if multiple vendors had competed.

Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of a competitive bidding process. The sole-source nature limits the government's ability to leverage market forces to drive down costs for these critical IT modernization analyses.

Public Impact

The primary beneficiary is the Department of Veterans Affairs, which will receive expert analysis to improve its IT supply chain. Services delivered include in-depth analysis and strategic recommendations for modernizing the VA's IT supply chain. The geographic impact is national, as the VA operates across the United States. Workforce implications are indirect, focusing on improving the efficiency and security of IT systems used by VA personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings.
Cost Plus Fixed Fee contract type carries inherent risk of cost escalation if not rigorously managed.
Reliance on a single FFRDC may limit exposure to a broader range of innovative solutions.
Contract duration of three years requires sustained oversight to ensure continued value.

Positive Signals

Award to MITRE, a recognized FFRDC, suggests access to specialized expertise in IT and supply chain analysis.
Focus on supply chain modernization addresses a critical area for government IT infrastructure.
The contract aims to improve the efficiency and security of the VA's IT systems.

Sector Analysis

This contract falls within the Professional, Scientific, and Technical Services sector, specifically focusing on IT and supply chain analysis. The market for such specialized analytical services is often dominated by a few key players, including FFRDCs like MITRE, due to the depth of expertise required. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of FFRDC work and sole-source awards, but government spending on IT modernization and supply chain consulting is substantial.

Small Business Impact

This contract does not appear to involve a small business set-aside, nor is there an explicit indication of subcontracting opportunities for small businesses within the provided data. The award to a large FFRDC suggests that the primary focus is on specialized, high-level analysis rather than broad service delivery where small businesses typically play a larger role. The impact on the small business ecosystem is likely minimal for this specific contract.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of Veterans Affairs contracting officers and program managers. As a sole-source award to an FFRDC, there may be specific interagency agreements or oversight frameworks governing the relationship between the VA and MITRE. Transparency is facilitated through contract databases, but detailed performance metrics and cost breakdowns may be less publicly available compared to competitively awarded contracts. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

VA IT Modernization Initiatives
Federal Supply Chain Management Programs
IT Services for Government Agencies
Research and Development Support Services

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $17.4 million to THE MITRE CORPORATION. FEDERALLY FUNDED RESEARCH AND DEVELOPMENT CENTER FOR THE OFFICE OF INFORMATION & TECHNOLOGY (OIT) FOR SUPPLY CHAIN MODERNIZATION (SCM) INITIATIVES ANALYSIS

Who is the contractor on this award?

The obligated recipient is THE MITRE CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $17.4 million.

What is the period of performance?

Start: 2022-09-29. End: 2025-09-28.

What is the track record of The MITRE Corporation in supporting the VA with IT modernization efforts?

The MITRE Corporation has a long-standing relationship with the U.S. government, including the Department of Veterans Affairs, serving as a Federally Funded Research and Development Center (FFRDC). MITRE's expertise spans a wide range of technical domains, including information technology, cybersecurity, and systems engineering. For the VA, MITRE has historically provided analysis and recommendations on various IT initiatives, aiming to improve system performance, security, and interoperability. Their role often involves objective, data-driven assessments and strategic guidance. While specific project details can be proprietary, MITRE's designation as an FFRDC implies a commitment to providing high-quality, unbiased technical support to government agencies, including complex challenges like supply chain modernization.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other pricing structures for similar analytical services?

The Cost Plus Fixed Fee (CPFF) contract type is common for research and development or complex services where the scope of work is not precisely defined at the outset, making fixed-price contracts difficult. In a CPFF contract, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure incentivizes the contractor to control costs, as the fee remains constant regardless of the final cost. However, it differs from fixed-price contracts, where the contractor bears the risk of cost overruns. Compared to Time and Materials (T&M) contracts, CPFF offers more cost certainty for the government regarding the contractor's profit margin, though total project costs can still fluctuate based on actual expenses. For analytical services, CPFF balances the need for flexibility with a degree of cost predictability, but requires robust oversight to manage the 'cost' component effectively.

What are the primary risks associated with a sole-source award for IT supply chain modernization analysis?

The primary risks associated with a sole-source award for IT supply chain modernization analysis include a lack of price competition, potentially leading to higher costs for the government compared to a scenario with multiple bidders. Without competitive pressure, there's a reduced incentive for the contractor to offer the most cost-effective solutions or to innovate aggressively on price. Furthermore, sole-source awards can limit the government's exposure to a diverse range of potential solutions and technical approaches that might be offered by other qualified vendors. There's also a risk that the government may not fully understand the market landscape or the full spectrum of capabilities available. Finally, it can raise perceptions of fairness and transparency, even if the sole-source justification is valid.

What are the potential benefits of awarding this contract to a Federally Funded Research and Development Center (FFRDC) like MITRE?

Awarding this contract to a Federally Funded Research and Development Center (FFRDC) like The MITRE Corporation offers several potential benefits. FFRDCs are established to meet specific long-term research and development needs of the government that cannot be effectively met by the private sector alone. They operate in the public interest, free from commercial conflicts of interest, and often possess unique, deep technical expertise and objective analysis capabilities. For the VA's IT supply chain modernization, MITRE can provide unbiased, high-level strategic advice, systems engineering, and analysis. Their established infrastructure, security clearances, and understanding of government operations can accelerate project initiation and execution, potentially leading to more effective and secure IT modernization outcomes than might be achieved through a standard commercial contract.

How does the contract's duration (1095 days) impact the assessment of its value and risk?

The contract's duration of 1095 days (three years) is significant and impacts the assessment of its value and risk in several ways. A longer duration suggests a complex, ongoing need for the analytical services, implying that supply chain modernization is not a short-term fix but a sustained effort. This extended period allows for deeper analysis, implementation support, and iterative improvements, potentially leading to more comprehensive and lasting value. However, it also increases the overall financial commitment and the duration over which risks, such as cost overruns or shifts in strategic priorities, can materialize. For the government, it necessitates sustained oversight and program management to ensure the contractor remains aligned with evolving needs and delivers value throughout the contract term. The extended timeline also means that market conditions and technological landscapes could change significantly during the contract's life.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: DRAFT TO 36C10A22N0045

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 7515 COLSHIRE DR, MC LEAN, VA, 22102

Business Categories: Category Business, Corporate Entity Tax Exempt, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $17,393,823

Exercised Options: $17,393,823

Current Obligation: $17,393,823

Actual Outlays: $14,183,736

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: 36C10A20D0004

IDV Type: IDC

Timeline