Dod's $238M MK6 Guidance System Repairequivalentunit Contract Awarded to the Charles Stark Draper Laboratory, Inc. Shows Limited Competition

Contract Overview

Contract Amount: $238,491,391 ($238.5M)

Contractor: THE Charles Stark Draper Laboratory, Inc.

Awarding Agency: Department of Defense

Start Date: 2012-01-24

End Date: 2016-09-30

Contract Duration: 1,711 days

Daily Burn Rate: $139.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MK6 GUIDANCE SYSTEM REPAIREQUIVALENTUNIT

Place of Performance

Location: CAMBRIDGE, MIDDLESEX County, MASSACHUSETTS, 02139

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $238.5 million to THE CHARLES STARK DRAPER LABORATORY, INC. for work described as: MK6 GUIDANCE SYSTEM REPAIREQUIVALENTUNIT Key points: 1. The contract's value of over $238 million for guidance system repair indicates a significant investment in specialized defense capabilities. 2. Awarded as a sole-source contract, it suggests a lack of readily available alternative suppliers or unique technical requirements. 3. The duration of the contract (over 4 years) points to a long-term need for these repair services. 4. The firm-fixed-price structure aims to provide cost certainty for the government, shifting some risk to the contractor. 5. The absence of small business set-aside flags indicates this contract was not specifically targeted to support small business participation. 6. The contract's focus on repair services highlights the ongoing maintenance and sustainment needs of complex defense systems.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its sole-source nature and specialized equipment. However, the total award of over $238 million over approximately four years suggests a substantial commitment to maintaining critical defense assets. Without competitive bids, it's difficult to definitively assess if the pricing represents optimal value for money. The firm-fixed-price contract type provides some cost predictability, but the lack of comparative data makes a precise value-for-money assessment difficult.

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 among multiple potential vendors. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the government's requirements. The lack of competition means that price discovery through market forces was limited, potentially leading to higher costs than if multiple bids had been solicited.

Taxpayer Impact: For taxpayers, a sole-source award means there was no opportunity to benefit from competitive pricing, which could have potentially lowered the overall cost of the guidance system repair services.

Public Impact

The primary beneficiaries are the Department of the Navy and the broader Department of Defense, ensuring the operational readiness of guided missile systems. The services delivered involve the repair and maintenance of critical components for guided missile systems, ensuring their functionality and reliability. The geographic impact is likely concentrated around naval bases and defense depots where these systems are maintained and deployed. Workforce implications include the need for highly skilled technicians and engineers specializing in complex electronic and mechanical repair for defense applications.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Lack of transparency in the procurement process due to non-competitive nature.
Potential for cost overruns if contractor's pricing is not rigorously scrutinized without market comparison.
Dependence on a single contractor for critical repair services could pose supply chain risks.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award to a specialized entity (THE CHARLES STARK DRAPER LABORATORY, INC.) suggests access to unique technical expertise.
Ensures continued operational readiness of vital defense equipment.

Sector Analysis

This contract falls within the 'Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing' sector, a highly specialized niche within the broader aerospace and defense industry. The market for such specialized repair services is often limited to a few key players with the requisite technical expertise and security clearances. Spending in this sector is driven by national defense priorities and the lifecycle management of complex weapon systems. Comparable spending benchmarks are difficult to establish due to the unique nature of the equipment and the sole-source award.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses indicated in the provided data. The nature of specialized defense repair services often requires advanced technical capabilities and facilities that may be more readily available from larger, established contractors. The absence of small business participation in this specific award means that opportunities for small businesses within this particular contract are likely minimal.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy contracting officers and program managers. Accountability measures are embedded in the firm-fixed-price contract terms, requiring the contractor to deliver specified repair services within agreed-upon timelines and quality standards. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Guided Missile Parts and Auxiliary Equipment Manufacturing
Defense System Maintenance and Repair
Aerospace and Defense Contracting
Naval Weapon Systems Sustainment

Risk Flags

Sole-source award
Lack of competition
Potential for cost inefficiency
Long-term reliance on single contractor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $238.5 million to THE CHARLES STARK DRAPER LABORATORY, INC.. MK6 GUIDANCE SYSTEM REPAIREQUIVALENTUNIT

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 $238.5 million.

What is the period of performance?

Start: 2012-01-24. End: 2016-09-30.

What is the track record of THE CHARLES STARK DRAPER LABORATORY, INC. in fulfilling similar defense contracts?

THE CHARLES STARK DRAPER LABORATORY, INC. has a long-standing history of supporting the Department of Defense, particularly in areas related to guidance, navigation, and control systems. They are known for their expertise in developing and maintaining complex systems for various military platforms. While specific performance metrics for this particular contract are not detailed here, their general reputation within the defense sector is that of a highly capable and specialized research and development and engineering services provider. Their involvement often signifies a need for deep technical knowledge and proprietary solutions, which aligns with the sole-source nature of this award.

How does the $238 million award compare to historical spending on MK6 GUIDANCE SYSTEM REPAIREQUIVALENTUNIT services?

Without access to historical spending data specifically for the 'MK6 GUIDANCE SYSTEM REPAIREQUIVALENTUNIT' or similar components over multiple fiscal years, a direct comparison is not feasible. However, a single award of over $238 million for repair services over a period of approximately four years suggests a significant and sustained requirement for maintaining these systems. This level of expenditure indicates that the MK6 guidance system is a critical asset for the Navy, necessitating substantial investment in its upkeep. Future analysis would benefit from examining trends in repair costs and contract values for this system or comparable ones to identify any significant deviations or patterns.

What are the primary risks associated with this sole-source contract for the Department of Defense?

The primary risks associated with this sole-source contract include potential cost inefficiencies due to the lack of competitive bidding, leading to a higher price than might be achieved in a competitive environment. There is also a risk of contractor lock-in, where the government becomes overly dependent on THE CHARLES STARK DRAPER LABORATORY, INC. for critical repair services, potentially limiting future flexibility or leverage. Furthermore, without the pressure of competition, there's a theoretical risk of reduced incentive for the contractor to innovate or optimize processes, although their established reputation may mitigate this. Ensuring robust oversight and performance management becomes crucial to mitigate these risks.

How effective is the firm-fixed-price contract type in managing costs for this specific repair service?

The firm-fixed-price (FFP) contract type is generally effective in providing cost certainty for the government, as the contractor assumes the risk of cost overruns. For repair services like those for the MK6 GUIDANCE SYSTEM REPAIREQUIVALENTUNIT, FFP can be beneficial if the scope of work and potential repair needs are well-defined. This structure incentivizes the contractor to perform the work efficiently to maintain profitability. However, if unforeseen complexities arise during repairs that were not anticipated, the FFP structure could lead to disputes or require contract modifications. The effectiveness also depends on the accuracy of the initial cost estimates and the contractor's ability to manage their own expenses.

What are the implications of awarding this contract to a single, specialized provider for future procurement strategies?

Awarding this contract to a single, specialized provider like THE CHARLES STARK DRAPER LABORATORY, INC. on a sole-source basis has significant implications for future procurement strategies. It highlights a potential gap in the market or a reliance on unique capabilities that may need to be addressed proactively. For future procurements, the Department of Defense might consider strategies to foster competition, such as investing in research and development to enable alternative solutions, encouraging new entrants into the market, or breaking down the requirement into smaller, more competitive components if feasible. Alternatively, if the specialized nature is inherent, long-term strategic partnerships with clear performance metrics and cost controls would be necessary.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 555 TECHNOLOGY SQ, CAMBRIDGE, MA, 02139

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: $238,491,391

Exercised Options: $238,491,391

Current Obligation: $238,491,391

Subaward Activity

Number of Subawards: 15

Total Subaward Amount: $157,136,987

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline