DoD's $3.18B Contract with MIT for Technical Services: A Deep Dive into Value and Competition
Contract Overview
Contract Amount: $3,185,646,782 ($3.2B)
Contractor: Massachusetts Institute of Technology
Awarding Agency: Department of Defense
Start Date: 2000-05-30
End Date: 2005-03-31
Contract Duration: 1,766 days
Daily Burn Rate: $1.8M/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Place of Performance
Location: LEXINGTON, MIDDLESEX County, MASSACHUSETTS, 02421
Plain-Language Summary
Department of Defense obligated $3.19 billion to MASSACHUSETTS INSTITUTE OF TECHNOLOGY for work described as: Key points: 1. Significant investment in specialized technical services by the Department of Defense. 2. Sole-source award to a prominent research institution raises questions about competition. 3. Long contract duration (1766 days) warrants scrutiny of ongoing value and necessity. 4. Focus on 'All Other Professional, Scientific, and Technical Services' requires clear definition of deliverables.
Value Assessment
Rating: questionable
The contract value of $3.18 billion over approximately 4.8 years is substantial. Without specific deliverables or benchmarks for 'All Other Professional, Scientific, and Technical Services,' assessing value for money is difficult. Comparison to similar sole-source contracts for advanced research and development is challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, indicating a lack of full and open competition. This method may be justified if MIT possesses unique capabilities essential for the Department of the Air Force's needs, but it limits price discovery and potentially leads to higher costs.
Taxpayer Impact: The sole-source nature of this large contract means taxpayers may not have benefited from competitive pricing, potentially resulting in a higher overall cost for the services rendered.
Public Impact
Potential for groundbreaking research and development benefiting national security. Concerns about the lack of competitive bidding on a multi-billion dollar contract. Need for transparency regarding the specific services provided and their impact. Long-term commitment to a single entity may stifle innovation from other sources.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of clear competition
- High contract value
- Long duration
Positive Signals
- Award to a reputable research institution
- Potential for advanced technological development
Sector Analysis
The 'All Other Professional, Scientific, and Technical Services' category (NAICS 541990) is broad and often associated with research and development, consulting, and specialized technical support. Spending in this sector can vary widely, but large sole-source contracts like this are notable and require careful justification.
Small Business Impact
This contract was awarded directly to the Massachusetts Institute of Technology, a large research institution. There is no indication that small businesses were involved as subcontractors or partners in this specific award, suggesting limited direct benefit to the small business sector from this particular contract.
Oversight & Accountability
The significant value and sole-source nature of this contract necessitate robust oversight from the Department of Defense to ensure that the funds are being used effectively and that the objectives are being met. Accountability for deliverables and performance is crucial.
Related Government Programs
- All Other Professional, Scientific, and Technical Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competitive bidding
- Potential for inflated pricing due to sole-source award
- Broad service category lacks specificity
- Long contract duration may not reflect evolving needs
- Limited transparency on specific deliverables and outcomes
Tags
all-other-professional-scientific-and-te, department-of-defense, ma, dca, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $3.19 billion to MASSACHUSETTS INSTITUTE OF TECHNOLOGY. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is MASSACHUSETTS INSTITUTE OF TECHNOLOGY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $3.19 billion.
What is the period of performance?
Start: 2000-05-30. End: 2005-03-31.
What specific technical services were procured from MIT under this contract, and how do they align with the Department of the Air Force's strategic objectives?
The contract falls under NAICS code 541990, 'All Other Professional, Scientific, and Technical Services.' While the data doesn't specify the exact services, this broad category typically includes research and development, specialized testing, engineering analysis, and technical consulting. The alignment with Air Force objectives would likely involve advanced technological development, scientific research supporting defense capabilities, or specialized technical expertise not readily available elsewhere.
Given the sole-source award, what mechanisms were in place to ensure fair and reasonable pricing and prevent potential cost overruns?
Sole-source contracts inherently limit price competition. The Department of Defense would typically rely on cost analysis, technical evaluations of proposed costs, and potentially comparisons to historical data or industry benchmarks for similar unique services. However, without competitive proposals, the risk of paying a premium is higher. Robust negotiation and detailed justification of costs are critical oversight functions in such cases.
What is the long-term impact of awarding such a substantial contract to a single entity on the broader landscape of defense innovation and the availability of specialized technical expertise?
Awarding a large, long-term sole-source contract to a single entity like MIT can concentrate expertise and resources, potentially accelerating specific research areas. However, it may also create a dependency, limit opportunities for other innovative firms (including small businesses) to contribute, and potentially slow the diffusion of knowledge across the defense industrial base. It raises questions about fostering a diverse and competitive ecosystem for future defense needs.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services
Product/Service Code: RESEARCH AND DEVELOPMENT › OTHER RESEARCH/DEVELOPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Contractor Details
Address: 77 MASSCHSTTS AVE E 19 57, CAMBRIDGE, MA, 90
Business Categories: Category Business, Educational Institution, Higher Education, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2000-05-30
Current End Date: 2005-03-31
Potential End Date: 2005-03-31 00:00:00
Last Modified: 2010-12-20
More Contracts from Massachusetts Institute of Technology
- 200507!000127!5700!fa8721!esc/Xpk !FA872105C0002 !A!N! !Y! ! !20050401!20100331!001425594!001425594!001425594!n!massachusetts Institute of TEC!77 Massachusetts AVE Ne49-!cambridge !ma!02139!11000!017!25!cambridge !middlesex !mass !+000010298000!n!n!003260606491!ac61!rdte/Electronics&communication Eq-Basic Research!s1 !services !000 !* !541990!E! !3! ! ! ! ! !20200930!B!A! !n!z!d!u!s!1!001!n!3a!z!y!d! ! !N!V!N! ! ! ! ! !a!a!000!a!c!n! ! ! !Y! ! !0001! ! — $3.0B (Department of Defense)
- Transition of Programs From MIT LL Contract FA8721-05-C-0002 to MIT LL Contract FA8702-15-D-0001 — $1.6B (Department of Defense)
- Massachusetts Institute of Technology: Lincoln Laboratory - Research and Development — $1.4B (Department of Defense)
- MIT LL Non-Severable Task Order Program 1815 — $1.0B (Department of Defense)
- Massachusetts Institute of Technology: Lincoln Laboratory - Research and Development — $1.0B (Department of Defense)
View all Massachusetts Institute of Technology federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)