DoD's $284M contract for missile parts awarded to Charles Stark Draper Laboratory, Inc. without competition

Contract Overview

Contract Amount: $284,115,142 ($284.1M)

Contractor: THE Charles Stark Draper Laboratory, Inc.

Awarding Agency: Department of Defense

Start Date: 2014-03-01

End Date: 2018-12-09

Contract Duration: 1,744 days

Daily Burn Rate: $162.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MOD1 GS OTHER SPALT MATERIAL

Place of Performance

Location: CAMBRIDGE, MIDDLESEX County, MASSACHUSETTS, 02139

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $284.1 million to THE CHARLES STARK DRAPER LABORATORY, INC. for work described as: MOD1 GS OTHER SPALT MATERIAL Key points: 1. The contract value of $284 million represents a significant investment in specialized defense manufacturing. 2. The absence of competition raises questions about potential price overruns and limited market engagement. 3. The contract duration of over 4 years suggests a long-term need for these specific missile components. 4. The award to a single entity may indicate a lack of readily available alternative suppliers for this niche product. 5. The fixed-price contract type aims to control costs, but the lack of competition could undermine this. 6. The contractor's specialization in guidance and control systems is a key factor in this award.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its specialized nature and lack of competitive bidding. Without comparable contract data or multiple bids, it's difficult to definitively assess if the $284 million represents a fair market price. The fixed-price nature provides some cost control, but the absence of competition means there was no market pressure to drive down costs. Further analysis would require understanding the specific technical requirements and the contractor's cost structure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of the Navy did not solicit bids from multiple potential suppliers. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The lack of competition limits the government's ability to explore alternative solutions or negotiate based on market dynamics.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price. It also limits opportunities for other businesses to secure government contracts.

Public Impact

The primary beneficiaries are the Department of Defense and its missile defense programs, ensuring the availability of critical components. The contract supports the manufacturing of specialized parts for guided missiles and space vehicles. The geographic impact is primarily centered around the contractor's operations in Massachusetts. The contract sustains specialized manufacturing jobs within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher prices than a competitive procurement.
Sole-source awards can reduce transparency in pricing and cost justification.
Dependence on a single supplier could create supply chain risks if the contractor faces issues.
Limited visibility into alternative technological solutions or innovations from other firms.

Positive Signals

The contractor, Charles Stark Draper Laboratory, Inc., is a recognized leader in its field, suggesting technical expertise.
The fixed-price contract type provides a degree of cost certainty for the government.
The award ensures the continued supply of critical components for national defense.

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 is characterized by high barriers to entry due to technical expertise, intellectual property, and stringent quality requirements. Spending in this sector is driven by national security priorities and technological advancements in defense systems. Comparable spending benchmarks are difficult to establish due to the unique nature of missile components.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have significant subcontracting implications for small businesses based on the provided data. The specialized nature of the work likely requires large, established firms with specific expertise. This award does not directly contribute to the small business ecosystem within this particular procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations. Accountability measures are inherent in the fixed-price contract structure, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is limited due to the sole-source nature of the award, but contract details and performance reports are usually available through government contracting databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Missile Defense Systems
Guided Missile Manufacturing
Space Vehicle Components
Defense Industrial Base Support
Aerospace Parts Manufacturing

Risk Flags

Sole-source award
Lack of competition
Potential for higher costs
Limited market visibility

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $284.1 million to THE CHARLES STARK DRAPER LABORATORY, INC.. MOD1 GS OTHER SPALT MATERIAL

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 $284.1 million.

What is the period of performance?

Start: 2014-03-01. End: 2018-12-09.

What is the specific technical nature of the 'Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment' being procured?

The provided data indicates the contract falls under NAICS code 336419, which covers 'Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing.' This broad category suggests the procurement involves components essential for the assembly, operation, or maintenance of guided missiles and space vehicles, beyond standard engines or airframes. This could include guidance systems, control mechanisms, specialized sensors, structural components made from advanced materials, or auxiliary equipment critical for mission success. The specific details would be outlined in the contract's Statement of Work (SOW), which is not publicly available in this data snippet. Charles Stark Draper Laboratory, Inc. is known for its expertise in guidance, navigation, and control (GNC) systems, suggesting a strong likelihood that these parts are related to such critical functions.

Why was this contract awarded on a sole-source basis instead of through full and open competition?

Sole-source awards are typically justified when only one responsible source is available or capable of meeting the government's requirements. For specialized defense components like those likely procured under NAICS 336419, this could be due to several factors. The contractor may possess unique proprietary technology, extensive testing data, or specialized manufacturing processes that are not replicable by other firms. Alternatively, the government might have determined that transitioning to a new supplier would incur unacceptable delays, costs, or risks to national security. Charles Stark Draper Laboratory, Inc. has a long history of working with the Department of Defense on advanced systems, suggesting they may hold unique intellectual property or have established critical infrastructure and expertise that makes them the only viable option for these specific parts.

How does the fixed-price contract type mitigate risks associated with a sole-source award?

A Firm Fixed Price (FFP) contract type aims to transfer risk from the government to the contractor. Under an FFP agreement, the contractor is obligated to deliver the specified goods or services for a predetermined price, regardless of their actual costs incurred. This means that if the contractor's expenses exceed their estimates, they absorb the loss. Conversely, if their costs are lower, they retain the profit. While this structure provides cost certainty for the government and incentivizes the contractor to manage their costs efficiently, its effectiveness in a sole-source scenario is somewhat diminished. Without competition, there's less assurance that the initial fixed price was the most competitive possible. However, it still prevents cost overruns due to contractor inefficiency or unexpected increases in the contractor's own expenses.

What is the historical spending pattern for similar contracts or with this specific contractor?

Analyzing historical spending patterns for this specific contract or contractor requires access to broader federal procurement databases. The provided data shows a single definitive contract awarded to The Charles Stark Draper Laboratory, Inc. by the Department of the Navy for $284,115,142, spanning from March 1, 2014, to December 9, 2018. This indicates a significant, multi-year investment in a particular type of defense component. To understand broader patterns, one would need to examine prior and subsequent contracts awarded to this entity, particularly for similar goods or services under NAICS 336419 or related codes. It would also be beneficial to compare this spending level against other major defense contractors performing similar work to gauge relative investment and potential market concentration.

What are the potential implications of awarding such a large contract without competition on the broader defense industrial base?

Awarding a substantial $284 million contract without competition can have mixed implications for the defense industrial base. On one hand, it ensures the continued operation and technological advancement of a critical supplier like Charles Stark Draper Laboratory, Inc., maintaining specialized capabilities vital for national security. This can prevent the erosion of niche expertise. On the other hand, it can stifle innovation and competition by limiting opportunities for other firms, including potential new entrants or smaller specialized companies, to develop and offer competing solutions. It may also lead to a concentration of work within a few key contractors, potentially reducing overall market resilience and increasing reliance on a limited number of suppliers for critical defense needs.

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

Solicitation ID: N0003014Q0001

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: $284,115,142

Exercised Options: $284,115,142

Current Obligation: $284,115,142

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $283,991,464

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline