DoD's $290M MITRE contract, a sole-source award, lacks competitive pricing data

Contract Overview

Contract Amount: $290,158,573 ($290.2M)

Contractor: THE Mitre Corporation

Awarding Agency: Department of Defense

Start Date: 2012-10-01

End Date: 2013-09-30

Contract Duration: 364 days

Daily Burn Rate: $797.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Other

Official Description: IGF::OT::IGF EXERCISE OF OPTION YEAR 4 FOR THE MITRE CONTRACT

Place of Performance

Location: BEDFORD, MIDDLESEX County, MASSACHUSETTS, 01730

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $290.2 million to THE MITRE CORPORATION for work described as: IGF::OT::IGF EXERCISE OF OPTION YEAR 4 FOR THE MITRE CONTRACT Key points: 1. The contract's value has grown significantly over its lifespan, raising questions about initial pricing. 2. As a sole-source award, there's no direct competition to benchmark pricing or ensure optimal value. 3. The lack of competition presents a risk of inflated costs and reduced innovation. 4. Performance context is limited due to the broad nature of 'All Other Professional, Scientific, and Technical Services'. 5. This contract positions MITRE as a key, long-term service provider within the DoD IT and technical services sector. 6. The contract's duration and sole-source nature suggest a deep integration with DoD operations.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and broad service category. Without competitive bids, it's difficult to assess if the $290 million awarded represents a fair market price. The contract's long duration and consistent renewals suggest a sustained need, but also a potential for cost creep without competitive pressure. Comparing it to similar broad technical services contracts is difficult without more specific performance metrics and pricing breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed. The Department of Defense directly awarded this contract to The MITRE Corporation without soliciting offers from other potential vendors. This approach bypasses the standard competitive bidding process, which typically involves multiple bidders vying for the contract. Consequently, there is no direct comparison of pricing or service offerings from competing firms, limiting the government's ability to ensure the most advantageous terms.

Taxpayer Impact: Taxpayers are potentially exposed to higher costs due to the absence of competitive pressure. Without multiple bids, the government may not be securing the best possible price or value for the services rendered.

Public Impact

The Department of Defense benefits from continuous technical and scientific support services. The contract supports a wide range of professional, scientific, and technical services essential for defense operations. The geographic impact is primarily within the Department of Defense's operational areas, likely nationwide and potentially global. Workforce implications include the direct employment of personnel by The MITRE Corporation to fulfill contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to suboptimal pricing and reduced incentive for cost efficiency.
The broad service category makes it difficult to assess specific performance outcomes and value for money.
Long-term sole-source awards can create vendor lock-in, limiting future flexibility and innovation.
Absence of competitive benchmarking hinders objective assessment of contractor performance and cost-effectiveness.

Positive Signals

The MITRE Corporation is a well-established entity with a history of providing services to the government.
The contract has been consistently renewed, indicating a perceived ongoing need and satisfactory performance to date.
The broad scope may allow for flexibility in addressing evolving DoD technical requirements.

Sector Analysis

This contract falls within the Professional, Scientific, and Technical Services sector, a broad category encompassing a wide array of specialized expertise. The market for these services is large and diverse, with many firms capable of providing support. However, specific niches within technical services, particularly those requiring deep domain knowledge and security clearances like those often held by MITRE, can be less competitive. Comparable spending benchmarks are difficult to establish due to the unique nature of MITRE's role as a federally funded research and development center (FFRDC) and the broad, non-specific nature of the service category (NAICS 541990).

Small Business Impact

This contract does not appear to have specific small business set-aside provisions, as indicated by 'sb': false. The award to The MITRE Corporation, a large, established organization, suggests that subcontracting opportunities for small businesses may be limited or dependent on MITRE's internal subcontracting strategy. Without a competitive bidding process that includes small business participation goals, the direct impact on the small business ecosystem for these specific services is likely minimal.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. As a sole-source award, the emphasis on oversight would likely focus on performance monitoring, adherence to contract terms, and cost reasonableness, rather than competitive fairness. Transparency is limited by the lack of a competitive process. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Federally Funded Research and Development Centers (FFRDCs)
Department of Defense IT Services
Professional and Technical Services Contracts
Sole-Source Contract Awards

Risk Flags

Sole-source award
Lack of competition
Broad service category
Long contract duration
Potential for cost creep

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $290.2 million to THE MITRE CORPORATION. IGF::OT::IGF EXERCISE OF OPTION YEAR 4 FOR THE MITRE CONTRACT

Who is the contractor on this award?

The obligated recipient is THE MITRE CORPORATION.

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 $290.2 million.

What is the period of performance?

Start: 2012-10-01. End: 2013-09-30.

What is The MITRE Corporation's track record with federal contracts, particularly sole-source awards?

The MITRE Corporation has a long and extensive history of contracting with the U.S. federal government, often in specialized technical and research capacities. As a Federally Funded Research and Development Center (FFRDC), MITRE is uniquely positioned to undertake complex, long-term projects for government agencies. While many of their contracts involve competitive processes, their role as an FFRDC also lends itself to sole-source or limited-competition awards where their specific expertise and independence are deemed essential. Historical data indicates a pattern of significant contract values, reflecting the critical nature of the services they provide across various domains, including defense, aviation, and cybersecurity. Their track record is generally characterized by technical proficiency and a focus on objective analysis, though the nature of sole-source awards necessitates careful oversight to ensure fair pricing and value.

How does the pricing of this contract compare to similar services procured through competitive means?

Direct comparison of pricing for this contract to similar services procured competitively is inherently difficult due to its sole-source nature and the broad classification of 'All Other Professional, Scientific, and Technical Services.' Competitive contracts allow for price discovery through multiple bids, establishing a market-driven price point. Without this, assessing the 'fairness' of the $290 million awarded to MITRE is challenging. Benchmarking would require identifying contracts with identical scope, duration, and service complexity, which is unlikely given MITRE's unique FFRDC status and the generic service category. The absence of competition means there's no direct market validation of MITRE's pricing structure against potential alternatives, raising concerns about potential overpayment compared to what could have been achieved through a competitive process.

What are the primary risks associated with awarding such a large contract on a sole-source basis?

The primary risks associated with awarding a large contract like this on a sole-source basis include: 1. **Cost Overruns:** Without competitive pressure, the contractor may have less incentive to control costs, potentially leading to prices higher than what could be achieved through competition. 2. **Reduced Innovation:** A lack of competition can stifle innovation, as the contractor may not feel the need to develop more efficient or advanced solutions. 3. **Vendor Lock-in:** The agency can become dependent on a single provider, making it difficult and costly to switch vendors in the future, even if better options become available. 4. **Limited Transparency:** Sole-source awards reduce transparency in the procurement process, making it harder for the public and oversight bodies to scrutinize the value received. 5. **Potential for Complacency:** The contractor might become complacent, assuming continued awards without the need for continuous improvement or aggressive cost management.

How effective has this contract been in delivering the intended services to the Department of Defense?

Assessing the effectiveness of this contract is challenging without specific performance metrics tied to the broad 'All Other Professional, Scientific, and Technical Services' category. The consistent renewal of the contract suggests that the Department of Defense has found the services provided by The MITRE Corporation to be necessary and, presumably, satisfactory to meet its needs. However, the lack of competitive benchmarking makes it difficult to quantify 'effectiveness' in terms of optimal value or efficiency compared to potential alternatives. The effectiveness is likely measured against internal DoD standards and requirements, which are not publicly detailed. MITRE's role as an FFRDC often implies support for complex, strategic initiatives, where effectiveness might be judged on mission accomplishment rather than purely cost-efficiency metrics.

What are the historical spending patterns for this specific contract or similar services procured by the Department of Defense?

The historical spending pattern for this specific contract shows a consistent award value over its duration, culminating in approximately $290 million. The contract was initially awarded in 2012 with an end date of September 30, 2013, and subsequent option years or extensions have maintained its active status. This indicates a sustained and significant investment by the Department of Defense in the services provided by The MITRE Corporation under this award. While the exact year-over-year spending fluctuates based on option periods exercised and task orders issued, the total value reflects a long-term commitment. For similar services, the DoD procures a vast array of professional, scientific, and technical support, with spending varying widely based on the specific nature of the service, the criticality of the mission, and whether the procurement is competed or sole-sourced. Sole-source awards for specialized FFRDC support, like this one, tend to represent substantial, ongoing investments.

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: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 202 BURLINGTON RD, BEDFORD, MA, 01730

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: $444,407,202

Exercised Options: $298,128,171

Current Obligation: $290,158,573

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $652,025

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Timeline