Department of Defense awards $313M contract to The MITRE Corporation for technical services

Contract Overview

Contract Amount: $313,392,507 ($313.4M)

Contractor: THE Mitre Corporation

Awarding Agency: Department of Defense

Start Date: 2011-10-01

End Date: 2012-09-30

Contract Duration: 365 days

Daily Burn Rate: $858.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Other

Official Description: EXERCISE OF OPTION YEAR 3 FOR CONTRACT FA8721-09-C-0002

Place of Performance

Location: BEDFORD, MIDDLESEX County, MASSACHUSETTS, 01730

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $313.4 million to THE MITRE CORPORATION for work described as: EXERCISE OF OPTION YEAR 3 FOR CONTRACT FA8721-09-C-0002 Key points: 1. Contract awarded to a single source, raising questions about competition and potential cost efficiencies. 2. The contract's duration of 3 years suggests a long-term need for these specialized services. 3. The 'All Other Professional, Scientific, and Technical Services' NAICS code indicates a broad scope of work. 4. The 'COST NO FEE' contract type implies that the government will reimburse the contractor for allowable costs, with no additional fee. 5. The contract was not competed, suggesting a potential lack of market research or a specific justification for sole-sourcing. 6. The award value of over $313 million indicates a significant investment in these services.

Value Assessment

Rating: questionable

The contract type 'COST NO FEE' can sometimes lead to less price discipline compared to fixed-price contracts. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar contracts. The absence of a fee structure means the government bears the risk of cost overruns. Further analysis would be needed to determine if the costs incurred are reasonable and represent good value for the services rendered.

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. This typically occurs when a specific contractor possesses unique capabilities or when there are urgent needs that preclude a full and open competition. The lack of competition limits the government's ability to solicit multiple bids and potentially secure more favorable pricing or innovative solutions.

Taxpayer Impact: For taxpayers, a sole-source award means there is no direct comparison to other potential providers, which could result in higher costs than if the contract had been competed. It also reduces the incentive for the contractor to aggressively control costs.

Public Impact

The Department of the Air Force benefits from specialized technical services provided by The MITRE Corporation. The services delivered likely support critical defense operations and technological advancements. The geographic impact is primarily within the Department of Defense's operational areas, though the specific locations are not detailed. Workforce implications may include the utilization of highly skilled technical personnel employed by The MITRE Corporation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Cost-reimbursement contract type without a fee can reduce contractor incentive for cost control.
Sole-source award raises concerns about market research and potential missed opportunities for better value.

Positive Signals

The MITRE Corporation is a well-established entity often involved in complex government projects.
The contract addresses a specific need within the Department of Defense, indicating strategic alignment.

Sector Analysis

The contract falls under the 'All Other Professional, Scientific, and Technical Services' category, which is a broad sector encompassing a wide range of specialized expertise. This sector is crucial for government operations, particularly in areas requiring advanced research, development, and technical support. Comparable spending in this sector can vary widely depending on the specific services, but large, long-term contracts like this are common for critical government functions.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no information provided regarding subcontracting plans for small businesses. This suggests that the primary contractor, The MITRE Corporation, will likely perform the majority of the work, with limited direct benefit to the small business ecosystem through this specific award.

Oversight & Accountability

Oversight mechanisms for this contract would typically be managed by the contracting officer and relevant program managers within the Department of the Air Force. Accountability measures would be tied to the performance requirements outlined in the contract. Transparency is limited due to the sole-source nature and the lack of detailed public reporting on performance metrics. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Technical Services
Professional and Scientific Services
Government Contracting
Air Force Procurement

Risk Flags

Sole-source award
Cost-reimbursement contract type
Lack of competition
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $313.4 million to THE MITRE CORPORATION. EXERCISE OF OPTION YEAR 3 FOR CONTRACT FA8721-09-C-0002

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 $313.4 million.

What is the period of performance?

Start: 2011-10-01. End: 2012-09-30.

What is the historical spending pattern for The MITRE Corporation with the Department of Defense for similar services?

Historical spending data for The MITRE Corporation with the Department of Defense for similar services would require a detailed analysis of past contract awards. The MITRE Corporation is a federally funded research and development center (FFRDC) and often receives significant funding for a wide array of technical and engineering support across various government agencies, including the Department of Defense. Without specific historical data for this contract's predecessors or comparable efforts, it's challenging to establish a precise pattern. However, FFRDCs like MITRE are typically engaged in long-term, high-value contracts due to their specialized expertise and objective advisory role. The $313 million award over three years suggests a substantial and ongoing requirement for their services, consistent with the typical engagement model for FFRDCs supporting complex defense initiatives.

How does the 'COST NO FEE' contract type impact contractor performance and cost control?

The 'COST NO FEE' (CNF) contract type means the government reimburses the contractor for all allowable costs incurred in performing the contract, but the contractor receives no additional profit or fee. This structure places the primary financial risk on the government. While it can be used in situations where defining a fee is difficult or to ensure maximum effort is applied without profit motive, it can also reduce the contractor's incentive to control costs aggressively. Unlike fixed-price contracts where the contractor profits from cost savings, in a CNF contract, any cost savings do not directly benefit the contractor's bottom line. This necessitates robust government oversight to ensure costs remain reasonable and allocable to the contract objectives. Performance is typically driven by contractual requirements and the contractor's commitment to its FFRDC mission rather than profit maximization.

What are the specific services provided under this contract, and how do they align with the Department of Defense's mission?

The contract is categorized under NAICS code 541990, 'All Other Professional, Scientific, and Technical Services.' This broad classification suggests that the services provided by The MITRE Corporation are diverse and highly specialized, likely encompassing areas such as systems engineering, research and development support, technical analysis, cybersecurity, and policy development. Given that this is a Department of the Air Force contract, these services are expected to align with the Air Force's mission, which includes air and space superiority, global mobility, intelligence, surveillance, and reconnaissance, and command and control. MITRE, as an FFRDC, often provides objective, independent advice and technical solutions to complex defense challenges, helping to shape acquisition strategies, improve system performance, and enhance operational effectiveness.

What is the justification for awarding this contract on a sole-source basis instead of through full and open competition?

The provided data indicates the contract was 'NOT COMPETED,' implying a sole-source award. The specific justification for this sole-source award is not detailed in the provided data. However, common justifications for sole-source procurements include that the item or service is available only from a single source, or that there is a compelling urgency that will not permit a competitive solicitation. For organizations like The MITRE Corporation, which operate as Federally Funded Research and Development Centers (FFRDCs), sole-source awards are often made due to their unique capabilities, established relationships, and the specialized, often sensitive, nature of the work they perform for the government. These FFRDCs are expected to provide objective analysis and technical support that may not be readily available from commercial entities.

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

A sole-source, cost-reimbursement contract of this magnitude carries several potential risks. Firstly, the lack of competition means the government cannot leverage market forces to ensure the best possible price, potentially leading to higher costs than a competed contract. Secondly, the 'COST NO FEE' structure, while intended to ensure effort, can diminish the contractor's incentive to control expenditures, increasing the risk of cost overruns. Robust government oversight, including detailed cost audits and performance monitoring, is crucial to mitigate these risks. Without competitive pressure, there's also a risk that innovation might be slower. The long-term nature of the contract could also mean that the government becomes overly reliant on a single provider, potentially limiting future flexibility.

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: $406,946,822

Exercised Options: $319,145,915

Current Obligation: $313,392,507

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Timeline