DoD's $293M MITRE contract for technical services awarded via sole-source justification

Contract Overview

Contract Amount: $293,411,696 ($293.4M)

Contractor: THE Mitre Corporation

Awarding Agency: Department of Defense

Start Date: 2014-10-01

End Date: 2015-09-30

Contract Duration: 364 days

Daily Burn Rate: $806.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Other

Official Description: IGF::OT::IGF MITRE EXERCISE OPTION YEAR 1

Place of Performance

Location: BEDFORD, MIDDLESEX County, MASSACHUSETTS, 01730

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $293.4 million to THE MITRE CORPORATION for work described as: IGF::OT::IGF MITRE EXERCISE OPTION YEAR 1 Key points: 1. Contract awarded to a single entity, raising questions about competitive pricing. 2. Significant contract value suggests a critical need for specialized technical services. 3. Sole-source award indicates potential barriers to entry for other qualified firms. 4. Long-term relationship with MITRE suggests established expertise and performance. 5. Lack of competition may limit opportunities for innovation and cost savings. 6. The contract's duration and value warrant close scrutiny of performance metrics.

Value Assessment

Rating: questionable

The contract's value of $293.4 million over its period of performance is substantial. Without a competitive bidding process, it is difficult to benchmark the value for money. The 'COST NO FEE' contract type suggests that the government reimburses MITRE for its costs, plus a negotiated fee, which can sometimes lead to less cost control compared to fixed-price contracts. Comparing this to similar sole-source contracts for specialized technical services would be necessary to assess if the pricing is reasonable, but the lack of competition inherently makes this assessment challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. The justification for this approach is not detailed in the provided data, but sole-source awards are typically made when only one responsible source can provide the required supplies or services. This significantly limits the number of potential bidders and can impact price discovery, as there is no direct competition to drive down costs.

Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of a competitive bidding process. The government's ability to negotiate favorable terms is reduced when only one vendor is considered.

Public Impact

The Department of Defense benefits from specialized technical services essential for its operations. This contract supports advanced research, development, and engineering services. The contract's impact is national, supporting critical defense infrastructure and capabilities. Workforce implications include highly skilled technical professionals employed by MITRE.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings for taxpayers.
Lack of transparency in the justification for sole-source award.
Cost-reimbursement contract type may incentivize higher spending if not closely managed.
Potential for vendor lock-in due to the specialized nature of services and sole-source award.

Positive Signals

MITRE Corporation is a well-established entity with a strong track record in providing technical services to the government.
The contract addresses critical national security needs, indicating high importance.
The 'COST NO FEE' structure, while requiring careful oversight, aims to cover necessary expenses for critical work.

Sector Analysis

This contract falls within the 'All Other Professional, Scientific, and Technical Services' category, which is a broad sector encompassing a wide range of specialized expertise. The market for these services is highly competitive, with numerous firms offering capabilities in areas like systems engineering, research and development, and scientific analysis. However, for highly specialized or mission-critical functions, sole-source awards to entities with unique qualifications, like MITRE, can occur. Comparable spending benchmarks are difficult to establish without knowing the specific technical services rendered, but the overall federal spending on professional and technical services is in the hundreds of billions annually.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor, The MITRE Corporation, is a large organization. There is no information provided regarding subcontracting plans or opportunities for small businesses within this specific contract. Therefore, the direct impact on the small business ecosystem from this particular award is likely minimal, unless MITRE has its own internal small business subcontracting program.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force, a component of the Department of Defense. Given the 'COST NO FEE' contract type, rigorous financial oversight and auditing would be expected to ensure that costs are reasonable and allocable. Transparency is limited by the sole-source nature of the award. Inspector General jurisdiction would apply to any potential fraud, waste, or abuse related to the contract.

Related Government Programs

Department of Defense Research and Development
Federal IT Services
Professional and Technical Services
Systems Engineering Support

Risk Flags

Sole-source award without clear justification.
Potential for inflated costs due to lack of competition.
Limited transparency in contract negotiation and pricing.
Contract type (Cost No Fee) requires robust oversight to ensure cost control.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $293.4 million to THE MITRE CORPORATION. IGF::OT::IGF MITRE EXERCISE OPTION YEAR 1

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 $293.4 million.

What is the period of performance?

Start: 2014-10-01. End: 2015-09-30.

What is the specific justification for awarding this contract on a sole-source basis to The MITRE Corporation?

The provided data indicates the contract was awarded as 'NOT COMPETED' and is 'sole-source'. While the specific justification is not detailed, common reasons for sole-source awards include unique capabilities, urgent needs, or situations where only one responsible source can fulfill the requirement. The MITRE Corporation is a federally funded research and development center (FFRDC) known for its expertise in systems engineering, research, and development across various government sectors, particularly defense. It is plausible that the nature of the services required for this contract were deemed to be uniquely within MITRE's purview, necessitating a sole-source award to leverage their specialized knowledge and infrastructure.

How does the 'COST NO FEE' contract type affect cost control and value for money compared to other contract types?

A 'COST NO FEE' (CNF) contract type means the government agrees to pay the contractor's allowable costs incurred in performing the contract, but the contractor receives no fee or profit. This contract type is typically used when the level of risk or uncertainty is high, or when the scope of work is not well-defined, making it difficult to establish a fixed price. While it aims to ensure that necessary work is performed without the contractor being deterred by potential losses, it can reduce the contractor's incentive to control costs aggressively, as they are reimbursed for their expenses. Effective oversight, detailed cost monitoring, and clear performance metrics are crucial to ensure value for money under a CNF contract.

What is The MITRE Corporation's track record with the Department of Defense and similar contracts?

The MITRE Corporation has a long-standing and extensive track record of supporting the Department of Defense (DoD) and other federal agencies. As a federally funded research and development center (FFRDC), MITRE is specifically chartered to provide objective, independent research and analysis to the government. They are involved in a wide array of critical programs, including defense systems engineering, cybersecurity, command and control, and intelligence. Their work often involves complex technical challenges and strategic planning. Given their FFRDC status and deep involvement with the DoD, it is common for them to receive sole-source or limited-competition contracts for highly specialized technical services where their unique capabilities are essential.

What are the potential risks associated with a sole-source contract of this magnitude?

The primary risk associated with a sole-source contract of this magnitude ($293.4 million) is the potential lack of competitive pressure on pricing. Without competing bids, the government may not achieve the most cost-effective solution. There's also a risk of vendor lock-in, where the government becomes overly reliant on a single provider, potentially limiting future flexibility and innovation. Furthermore, the justification for the sole-source award needs to be robust to ensure that competition was not artificially limited. If the required services could have been provided by multiple qualified vendors, a sole-source award represents a missed opportunity for better value and potentially broader industry engagement.

How does this contract fit into the broader landscape of federal spending on professional, scientific, and technical services?

This contract, valued at $293.4 million for 'All Other Professional, Scientific, and Technical Services,' represents a significant portion of spending within this category for a single award. Federal spending on professional, scientific, and technical services is a substantial segment of the overall federal budget, often running into hundreds of billions of dollars annually. These services are critical for supporting government operations, research, development, and policy implementation across all agencies. Contracts like this, especially those awarded to FFRDCs like MITRE, often address highly specialized, mission-critical needs that are not readily available in the commercial market or require a level of independence and objectivity that FFRDCs provide.

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: $329,362,813

Exercised Options: $307,583,311

Current Obligation: $293,411,696

Subaward Activity

Number of Subawards: 29

Total Subaward Amount: $5,081,510

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline