DoD's $171M R&D Contract with Draper Lab: A 5-Year Look at Cost-Plus Incentives
Contract Overview
Contract Amount: $171,363,676 ($171.4M)
Contractor: THE Charles Stark Draper Laboratory, Inc.
Awarding Agency: Department of Defense
Start Date: 2005-01-23
End Date: 2010-09-30
Contract Duration: 2,076 days
Daily Burn Rate: $82.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE
Sector: R&D
Place of Performance
Location: CAMBRIDGE, MIDDLESEX County, MASSACHUSETTS, 02139
Plain-Language Summary
Department of Defense obligated $171.4 million to THE CHARLES STARK DRAPER LABORATORY, INC. for work described as: Key points: 1. The contract awarded to THE CHARLES STARK DRAPER LABORATORY, INC. for R&D in Physical, Engineering, and Life Sciences totaled $171.36 million. 2. Awarded by the Department of the Navy, this contract utilized a Cost Plus Incentive fee structure. 3. The contract duration was 2076 days, spanning from January 23, 2005, to September 30, 2010. 4. The contract was not competed, raising questions about potential price discovery and value. 5. The specific Product Service Code (PSC) is not provided, limiting detailed sector analysis.
Value Assessment
Rating: questionable
The Cost Plus Incentive fee structure aims to control costs by incentivizing the contractor to stay within budget. However, without a competitive bidding process, it's difficult to benchmark the pricing against similar contracts or determine if the government received the best possible value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery as there was no market competition to drive down costs or ensure the most cost-effective solution was chosen. The government relied on negotiation rather than competitive pressure.
Taxpayer Impact: The lack of competition may have resulted in higher costs for taxpayers compared to a competitively awarded contract, as the contractor faced less pressure to optimize pricing.
Public Impact
Research and Development: Significant investment in advanced scientific and engineering research. National Security: Likely contributes to defense capabilities and technological superiority for the Navy. Long-term Investment: The extended duration suggests a focus on complex, multi-year research projects. Sole-Source Award: Raises concerns about transparency and potential for inflated costs.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- Cost-Plus Incentive Fee Structure (potential for cost overruns if not managed tightly)
- Long Contract Duration (risk of scope creep or evolving requirements)
Positive Signals
- Focus on R&D
- Potential for technological advancement
Sector Analysis
The contract falls under the Research and Development in the Physical, Engineering, and Life Sciences (NAICS 541710) sector. Spending in this sector is crucial for innovation but can be prone to cost overruns due to the inherent uncertainties in research.
Small Business Impact
The data does not indicate whether small businesses were involved as subcontractors. As a sole-source award to a large entity, opportunities for small business participation may have been limited unless specifically mandated.
Oversight & Accountability
The Cost Plus Incentive fee structure requires robust oversight to ensure contractor performance and cost control. Without details on specific oversight mechanisms, it's difficult to assess their effectiveness in managing this significant R&D investment.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of Competition
- Potential for Cost Overruns (inherent in R&D and CPI contracts)
- Limited Transparency on Outcomes
- No Small Business Set-Aside Indicated
Tags
research-and-development-in-the-physical, department-of-defense, ma, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $171.4 million to THE CHARLES STARK DRAPER LABORATORY, INC.. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is THE CHARLES STARK DRAPER LABORATORY, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $171.4 million.
What is the period of performance?
Start: 2005-01-23. End: 2010-09-30.
What specific technological advancements or outcomes resulted from this $171 million R&D investment, and how do they compare to the initial objectives?
The primary objective of this contract was research and development in physical, engineering, and life sciences. Without specific project details, it's impossible to quantify the exact technological advancements. However, the significant investment suggests a focus on complex, potentially groundbreaking work. Evaluating the return on investment would require comparing the achieved outcomes against the initial research goals and assessing their impact on the Department of the Navy's capabilities.
Given the sole-source nature of this contract, what measures were in place to ensure the government negotiated the best possible price and terms?
Sole-source contracts typically rely on negotiation rather than competitive bidding. To ensure fair pricing, the Department of the Navy would likely have conducted thorough cost and technical analyses, potentially involving independent cost estimators and subject matter experts. They would also have leveraged historical pricing data and market research where available. However, the absence of competition inherently limits the government's leverage in price negotiations.
How effectively did the Cost Plus Incentive fee structure manage project costs and incentivize performance over the 5-year duration of this contract?
The Cost Plus Incentive (CPI) fee structure aims to align contractor and government interests by providing incentives for cost savings and performance targets. Its effectiveness hinges on well-defined performance metrics and realistic cost targets. Over a 5-year period, effective management would involve continuous monitoring of expenditures against baseline estimates and objective assessment of progress towards R&D goals. Without access to the contractor's performance reports and final cost data, a definitive assessment of the CPI's effectiveness is not possible.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences
Product/Service Code: GUIDED MISSLES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE (V)
Evaluated Preference: NONE
Contractor Details
Address: 555 TECHNOLOGY SQ, CAMBRIDGE, MA, 90
Business Categories: Category Business, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2005-01-23
Current End Date: 2010-09-30
Potential End Date: 2010-09-30 00:00:00
Last Modified: 2014-08-25
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