DoD's $329M MITRE contract for engineering services awarded via sole-source vehicle

Contract Overview

Contract Amount: $329,142,013 ($329.1M)

Contractor: THE Mitre Corporation

Awarding Agency: Department of Defense

Start Date: 2017-10-01

End Date: 2018-09-30

Contract Duration: 364 days

Daily Burn Rate: $904.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Other

Official Description: MITRE ENGINEERING SERVICES

Place of Performance

Location: BEDFORD, MIDDLESEX County, MASSACHUSETTS, 01730

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $329.1 million to THE MITRE CORPORATION for work described as: MITRE ENGINEERING SERVICES Key points: 1. Contract awarded to a single entity, raising questions about competitive pricing. 2. Significant spending on 'All Other Professional, Scientific, and Technical Services' warrants scrutiny. 3. Contract duration of 364 days suggests a need for ongoing services. 4. Lack of competition may limit opportunities for innovative solutions from other firms. 5. Performance period falls within a fiscal year, indicating consistent demand. 6. The contract's value represents a substantial investment in specialized technical support.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the broad category of services. Without competitive bids, it's difficult to ascertain if the $329 million represents a fair market price. The 'COST NO FEE' contract type implies that the government reimburses MITRE for its costs, plus a negotiated fee, which can sometimes lead to higher overall expenditures compared to fixed-price contracts if cost controls are not robust. Further analysis would require access to detailed cost breakdowns and comparison with similar, competitively awarded contracts for specialized engineering services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source procurement strategy, meaning only one vendor, THE MITRE CORPORATION, was solicited. This approach bypasses the standard competitive bidding process. While sole-source awards can be justified for unique capabilities or urgent needs, they inherently limit price discovery and can potentially lead to higher costs for the government compared to a fully competed contract. The absence of multiple bidders means there was no direct price competition to drive down costs or encourage innovative proposals.

Taxpayer Impact: Taxpayers may not be receiving the best possible value due to the lack of competition. Without a competitive environment, there is less pressure on the contractor to offer the most cost-effective solutions, potentially leading to higher overall program costs.

Public Impact

The Department of Defense benefits from specialized engineering and technical expertise. Services delivered likely support critical defense missions and technological advancements. The contract's impact is national, supporting federal defense objectives. Workforce implications are primarily for the contractor, THE MITRE CORPORATION, and its employees.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Broad service category ('All Other Professional, Scientific, and Technical Services') lacks specificity, potentially obscuring detailed cost drivers.
Cost-reimbursable contract type can incentivize higher spending if not tightly managed.
Lack of transparency in the justification for sole-source award.
No clear mechanism for evaluating alternative solutions or contractors.

Positive Signals

MITRE CORPORATION is a well-established entity with a history of serving government needs.
Contract provides essential, ongoing technical support to the Department of Defense.
Defined performance period indicates a structured approach to service delivery.
The contract supports critical national defense functions.

Sector Analysis

This contract falls within the Professional, Scientific, and Technical Services sector, specifically under the 'All Other Professional, Scientific, and Technical Services' NAICS code (541990). This broad category encompasses a wide range of specialized services that do not fit into more specific categories. The federal government is a significant consumer of these services, particularly within the defense and intelligence communities, for research, development, engineering, and advisory support. Comparable spending benchmarks are difficult to establish due to the heterogeneity of services within this NAICS code and the sole-source nature of this award.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the contractor, THE MITRE CORPORATION, is a large organization. There is no explicit information regarding subcontracting plans for small businesses within the provided data. This sole-source award to a large entity may limit opportunities for small businesses to participate in delivering these specific engineering services, potentially impacting the small business ecosystem that relies on government contracting.

Oversight & Accountability

Oversight for this contract would primarily reside within the Department of the Air Force, a component of the Department of Defense. As a sole-source award, the justification and terms would be subject to review by contracting officers and potentially higher-level procurement authorities. Transparency regarding the specific oversight mechanisms and accountability measures is limited without further documentation. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Research and Development Contracts
Federal Professional and Technical Services Spending
Air Force Engineering Support Contracts
Sole-Source Defense Procurements

Risk Flags

Sole-source award
Lack of competitive bidding
Broad service category
Cost-reimbursable contract type

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $329.1 million to THE MITRE CORPORATION. MITRE ENGINEERING SERVICES

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 $329.1 million.

What is the period of performance?

Start: 2017-10-01. End: 2018-09-30.

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 a 'SOLE SOURCE'. While the specific justification is not detailed in the abbreviated data, sole-source awards are typically justified when only one responsible source can provide the required supplies or services. This could be due to unique capabilities, proprietary technology, urgent and compelling needs, or specific government-mandated roles, such as Federally Funded Research and Development Centers (FFRDCs) like MITRE. Without the official justification document, it's impossible to confirm the exact reasoning, but it implies that the Department of Defense determined that MITRE was the only viable option for these specific engineering services at the time of award.

How does the 'COST NO FEE' contract type impact the overall cost to the government compared to other contract types?

A 'Cost No Fee' (Cost) 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 type of contract is typically used when the costs are uncertain and a fixed price would be too risky for the contractor. While it aims to control costs by eliminating profit, it places a significant burden on the government to meticulously monitor and audit the contractor's costs to ensure they are reasonable, allocable, and allowable. If cost controls are not stringent, the total expenditure could still be high, as the government bears the risk of cost overruns. It is generally considered less desirable than fixed-price contracts from a cost-certainty perspective for the government.

What are the potential risks associated with awarding a $329 million contract without competition?

The primary risk of awarding a contract of this magnitude without competition is the potential for inflated pricing and reduced value for money. Without the pressure of competing bids, THE MITRE CORPORATION may not have had an incentive to offer the most cost-effective solutions or the lowest possible price. This lack of competition can also stifle innovation, as alternative approaches or technologies from other potential vendors are not explored. Furthermore, it raises concerns about transparency and fairness in the procurement process. Taxpayers may end up paying more than necessary for the services received, and the government might miss out on potentially superior solutions that could have emerged from a competitive environment.

What is the typical role of THE MITRE CORPORATION in federal contracting, and does this contract align with that role?

THE MITRE CORPORATION operates several Federally Funded Research and Development Centers (FFRDCs) for various government sponsors, including the Department of Defense. FFRDCs are intended to provide objective, independent research and analysis to support government decision-making and address complex technical challenges. Contracts awarded to MITRE often involve systems engineering, research, development, and technical support. This contract for 'All Other Professional, Scientific, and Technical Services' aligns with MITRE's established role as a provider of advanced technical expertise and analysis to government agencies, particularly within the defense sector.

Can the broad NAICS code '541990 - All Other Professional, Scientific, and Technical Services' obscure the actual nature and cost drivers of the services provided?

Yes, the NAICS code '541990 - All Other Professional, Scientific, and Technical Services' is a catch-all category and is inherently broad. This lack of specificity can indeed obscure the precise nature of the services rendered and make it difficult to identify the primary cost drivers. While it may accurately reflect a diverse range of activities, it hinders detailed analysis of spending patterns and performance metrics. For a contract valued at over $329 million, a more specific classification or detailed breakdown of service categories within the contract itself would provide greater transparency and allow for more effective benchmarking and oversight of expenditures.

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: $350,899,267

Exercised Options: $350,602,637

Current Obligation: $329,142,013

Actual Outlays: $-33

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $1,259,585

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline