DoD awards $626.7M MIT contract for technical services, raising questions on competition and value
Contract Overview
Contract Amount: $626,742,700 ($626.7M)
Contractor: Massachusetts Institute of Technology
Awarding Agency: Department of Defense
Start Date: 2011-04-07
End Date: 2018-03-31
Contract Duration: 2,550 days
Daily Burn Rate: $245.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST NO FEE
Sector: Other
Official Description: MIT/LL CONTINUATION CONTRACT
Place of Performance
Location: LEXINGTON, MIDDLESEX County, MASSACHUSETTS, 02421
Plain-Language Summary
Department of Defense obligated $626.7 million to MASSACHUSETTS INSTITUTE OF TECHNOLOGY for work described as: MIT/LL CONTINUATION CONTRACT Key points: 1. Significant contract value of $626.7 million awarded to a single entity. 2. Lack of competition raises concerns about potential overpricing and limited innovation. 3. Contract duration of 2550 days (approx. 7 years) indicates long-term reliance. 4. Services fall under 'All Other Professional, Scientific, and Technical Services', a broad category.
Value Assessment
Rating: questionable
The contract's 'COST NO FEE' structure, while potentially beneficial for the government in some scenarios, makes direct pricing assessment difficult without further details on cost controls and fee structures. Benchmarking is challenging due to the broad service category and lack of competitive pricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for taxpayers as there was no market pressure to offer competitive pricing.
Taxpayer Impact: The lack of competition for a $626.7 million contract suggests a significant potential for taxpayer funds to be used inefficiently.
Public Impact
Taxpayers may be paying a premium for services due to the absence of competitive bidding. Limited transparency into the cost justification for this large sole-source award. Potential for missed opportunities to leverage innovative solutions from a wider range of providers.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- High contract value
- Broad service category
- Long contract duration
Positive Signals
- Awarded to a reputable institution (MIT)
Sector Analysis
The 'All Other Professional, Scientific, and Technical Services' sector is broad and can encompass a wide range of activities. Benchmarking is difficult without specific service details, but large sole-source contracts in this area warrant scrutiny for value and necessity.
Small Business Impact
The data indicates this contract was not awarded to small businesses, and the sole-source nature further limits opportunities for small business participation.
Oversight & Accountability
The sole-source nature of this large contract necessitates robust oversight to ensure the government is receiving fair value and that the services are essential and appropriately priced. Transparency regarding the justification for not competing the award 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 competition
- Potential for inflated costs
- Limited transparency
- Broad service category obscuring specific value
- Long contract duration without clear competitive review
Tags
all-other-professional-scientific-and-te, department-of-defense, ma, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $626.7 million to MASSACHUSETTS INSTITUTE OF TECHNOLOGY. MIT/LL CONTINUATION CONTRACT
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 $626.7 million.
What is the period of performance?
Start: 2011-04-07. End: 2018-03-31.
What specific justification was provided for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?
The justification for a sole-source award is critical for understanding why competition was bypassed. Typically, sole-source awards are granted when only one responsible source can provide the required supplies or services. Without this justification, it's difficult to assess if taxpayer funds were managed effectively or if opportunities for better pricing and innovation were missed.
How was the 'COST NO FEE' pricing structure evaluated to ensure it represented fair and reasonable pricing for the services rendered?
The 'COST NO FEE' structure means the contractor is reimbursed for allowable costs but receives no fee. Evaluating this requires rigorous auditing of costs to ensure they are reasonable and allocable to the contract. The government must have strong internal controls and auditing capabilities to prevent cost overruns and ensure value, especially in the absence of competitive pressure.
What performance metrics and deliverables were established to measure the effectiveness and value of the services provided under this contract?
For a contract of this magnitude and duration, clear performance metrics and deliverables are essential for accountability. These should align with the Air Force's objectives and allow for objective assessment of the contractor's performance. Without them, it's challenging to determine if the significant investment yielded the desired outcomes or represented good value for the taxpayer.
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 › C – National Defense R&D Services
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: 244 WOOD ST, LEXINGTON, MA, 02421
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: $626,742,700
Exercised Options: $626,742,700
Current Obligation: $626,742,700
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2011-04-07
Current End Date: 2018-03-31
Potential End Date: 2018-03-31 00:00:00
Last Modified: 2017-05-26
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