Draper Lab awarded $164.5M for Trident II guidance systems, a sole-source contract with cost-plus incentives

Contract Overview

Contract Amount: $164,581,022 ($164.6M)

Contractor: THE Charles Stark Draper Laboratory, Inc.

Awarding Agency: Department of Defense

Start Date: 2016-02-02

End Date: 2024-09-30

Contract Duration: 3,163 days

Daily Burn Rate: $52.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: IGF::CT::IGF TRIDENT MK 6 GUIDANCE SYSTEM PEUS

Place of Performance

Location: CAMBRIDGE, MIDDLESEX County, MASSACHUSETTS, 02139

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $164.6 million to THE CHARLES STARK DRAPER LABORATORY, INC. for work described as: IGF::CT::IGF TRIDENT MK 6 GUIDANCE SYSTEM PEUS Key points: 1. Contract awarded to a single, specialized provider, raising questions about competitive pricing. 2. Cost-plus incentive fee structure aims to balance contractor performance with cost control. 3. Long contract duration (over 8 years) suggests a critical, long-term need for the system. 4. The contract is for specialized parts, indicating a niche but vital defense component. 5. No small business set-aside indicates the specialized nature of the requirement. 6. Performance is tied to incentives, suggesting a focus on achieving specific technical outcomes.

Value Assessment

Rating: fair

The contract's value of $164.5 million over its duration is substantial for specialized defense components. Benchmarking is difficult due to the niche nature of the Trident II guidance system parts. The cost-plus incentive fee (CPIF) structure allows for shared savings if costs are below target, but also includes potential for higher costs if performance incentives are met. Without access to target costs or detailed performance metrics, a definitive value-for-money assessment is challenging.

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. The Department of the Navy likely determined that The Charles Stark Draper Laboratory, Inc. was the only responsible source capable of fulfilling the requirement for these highly specialized guidance system components. This lack of competition limits price discovery and may result in higher costs than if multiple vendors had bid.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. The government relies on negotiation and oversight to ensure fair pricing in sole-source situations.

Public Impact

The primary beneficiaries are the U.S. Navy's strategic deterrence capabilities, ensuring the reliability of the Trident II submarine-launched ballistic missile system. Services delivered include the manufacturing and support of critical guidance system components. Geographic impact is national, supporting a key element of U.S. national security infrastructure. Workforce implications include highly skilled engineering and manufacturing jobs at The Charles Stark Draper Laboratory.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost-plus contracts can incentivize higher spending if not carefully managed.
Long-term nature of the contract requires sustained oversight to ensure continued value.
Specialized nature of components makes it difficult to find alternative suppliers or benchmark costs.

Positive Signals

CPIF structure includes incentives for cost savings, aligning contractor and government interests.
The Charles Stark Draper Laboratory is a recognized expert in this highly specialized field.
Contract duration suggests a stable, long-term requirement for critical defense systems.
Focus on specific performance incentives can drive technical excellence.

Sector Analysis

The contract falls within the 'Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing' sector. This is a highly specialized segment of the aerospace and defense industry, characterized by significant R&D investment, stringent quality control, and often, limited competition due to proprietary technology or unique expertise. Comparable spending benchmarks are difficult to establish due to the unique nature of the Trident II system, but overall defense spending on strategic weapon systems is in the billions annually.

Small Business Impact

This contract does not appear to have a small business set-aside, which is typical for highly specialized defense systems requiring unique expertise and facilities. There is no explicit information provided regarding subcontracting plans for small businesses. The nature of this contract suggests that the prime contractor likely possesses the specialized capabilities required, potentially limiting opportunities for small businesses in direct subcontracting roles for this specific requirement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. The cost-plus incentive fee structure necessitates close monitoring of costs and performance against established targets and incentives. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse. Transparency is limited due to the sole-source nature and defense classification of the system.

Related Government Programs

Trident II (D5) Submarine-Launched Ballistic Missile
Strategic Weapons Systems
Ballistic Missile Defense
Naval Strategic Systems

Risk Flags

Sole-source award
Cost-plus contract type
Lack of public performance metrics
Highly specialized technology

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $164.6 million to THE CHARLES STARK DRAPER LABORATORY, INC.. IGF::CT::IGF TRIDENT MK 6 GUIDANCE SYSTEM PEUS

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 $164.6 million.

What is the period of performance?

Start: 2016-02-02. End: 2024-09-30.

What is the historical spending trend for the IGF TRIDENT MK 6 GUIDANCE SYSTEM PEUS contract with The Charles Stark Draper Laboratory?

Historical spending data for this specific contract (NA 336419) indicates a significant investment over its lifespan. The current award of $164.5 million covers the period from February 2, 2016, to September 30, 2024. While this data point represents a substantial single award, understanding the full historical trend would require examining prior contracts or modifications related to the IGF TRIDENT MK 6 GUIDANCE SYSTEM PEUS with this contractor. Without access to a comprehensive contract history database showing all previous awards and modifications for this specific item and contractor, it's challenging to provide a detailed year-over-year spending trend. However, the duration and value suggest a consistent and significant allocation of resources towards maintaining and producing these critical components for the Trident II system.

How does the pricing structure (Cost Plus Incentive Fee) compare to other contracts for similar defense components?

The Cost Plus Incentive Fee (CPIF) structure is common for complex defense procurements where technical performance is critical and precise cost estimation is difficult. In a CPIF contract, the contractor is reimbursed for allowable costs plus a fee that is adjusted based on performance against pre-determined targets (e.g., cost, schedule, or technical performance). This structure aims to incentivize the contractor to control costs while achieving specific objectives. Compared to fixed-price contracts, CPIF offers more flexibility but carries a higher risk of cost overruns if not managed diligently. For highly specialized components like guidance systems, where innovation and performance are paramount and the market may be limited, CPIF is often preferred over firm-fixed-price arrangements. However, the effectiveness hinges on well-defined targets and robust government oversight to ensure fair pricing and value.

What are the key performance indicators (KPIs) associated with this contract, and how is performance measured?

Specific Key Performance Indicators (KPIs) for the IGF TRIDENT MK 6 GUIDANCE SYSTEM PEUS contract are not publicly detailed due to the sensitive nature of the defense system. However, in a Cost Plus Incentive Fee (CPIF) contract, KPIs typically revolve around achieving specific technical performance milestones, meeting delivery schedules, and controlling costs relative to established targets. The 'incentive' portion of the fee is directly tied to the contractor's success in meeting or exceeding these pre-defined metrics. The Department of the Navy would have established these targets during the negotiation phase. Performance measurement would involve rigorous testing, quality assurance checks, and regular progress reviews by government technical representatives to verify compliance with specifications and assess the contractor's progress towards achieving the incentive goals.

What is the track record of The Charles Stark Draper Laboratory, Inc. in delivering complex defense systems?

The Charles Stark Draper Laboratory, Inc. (CSDL) has a long and distinguished track record in developing and supporting complex defense systems, particularly in areas of guidance, navigation, and control (GNC). CSDL has been instrumental in the development of inertial navigation systems for numerous military platforms, including the Minuteman, Polaris, Poseidon, and Trident missile programs. Their expertise is highly specialized and critical to national security. While specific contract performance details are often classified or proprietary, CSDL's sustained role as a key contractor for strategic weapon systems like the Trident II implies a history of successful delivery and technical competence. Their deep institutional knowledge and specialized capabilities make them a critical, often sole-source, provider for such advanced technologies.

Are there any identified risks associated with the sole-source nature of this contract?

Yes, the sole-source nature of this contract presents several risks. The primary risk is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government has less leverage to negotiate the lowest possible price. This can lead to reduced value for taxpayer money. Another risk is vendor lock-in; the government becomes dependent on a single supplier, which can be problematic if the supplier faces financial difficulties, operational issues, or decides to exit the market. Furthermore, a sole-source award can stifle innovation, as there is less incentive for the contractor to explore cost-saving technologies or process improvements if they are guaranteed the contract regardless of competitive alternatives. Robust oversight and negotiation are crucial to mitigate these risks.

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: N0003016Q0008

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

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: $164,706,384

Exercised Options: $164,706,384

Current Obligation: $164,581,022

Subaward Activity

Number of Subawards: 23

Total Subaward Amount: $150,189,702

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline