DoD's $380M engineering services contract awarded to Charles Stark Draper Laboratory, Inc. with no competition

Contract Overview

Contract Amount: $379,885,994 ($379.9M)

Contractor: THE Charles Stark Draper Laboratory, Inc.

Awarding Agency: Department of Defense

Start Date: 2015-10-01

End Date: 2017-09-30

Contract Duration: 730 days

Daily Burn Rate: $520.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: FIGF::OT::IGF CLIN 1, 7 AND 15 TES (FY16)

Place of Performance

Location: CAMBRIDGE, MIDDLESEX County, MASSACHUSETTS, 02139

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $379.9 million to THE CHARLES STARK DRAPER LABORATORY, INC. for work described as: FIGF::OT::IGF CLIN 1, 7 AND 15 TES (FY16) Key points: 1. Contract awarded on a cost-plus-incentive-fee basis, suggesting potential for cost overruns if not managed carefully. 2. The lack of competition raises concerns about price discovery and potential overpayment. 3. The contract duration of two years (FY16-FY17) is relatively short for complex engineering services. 4. The specific engineering services provided are not detailed, making it difficult to assess performance benchmarks. 5. The contract's value is significant, representing a substantial investment in specialized engineering capabilities. 6. The contractor, Charles Stark Draper Laboratory, Inc., has a history of working with the Department of Defense.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of detailed service descriptions and competitive bidding. The cost-plus-incentive-fee structure means the final cost could exceed initial estimates, depending on performance and cost controls. Without comparable contracts or market rates for these specific engineering services, it's difficult to definitively assess value for money. The absence of competition further complicates a fair assessment of pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. The justification for this approach is not provided in the data. Sole-source awards can limit opportunities for other qualified contractors and may result in higher prices compared to a competitive environment. The lack of bidders means there was no market pressure to drive down costs or improve service offerings.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without a competitive process, there's less assurance that the government secured the best possible price for these engineering services.

Public Impact

The Department of Defense benefits from specialized engineering expertise for its programs. Services delivered likely support advanced technological development and system integration within defense applications. The geographic impact is primarily within the United States, supporting domestic defense capabilities. Workforce implications include employment for highly skilled engineers and technical personnel at the contractor's facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs.
Cost-plus-incentive-fee contracts can incentivize cost overruns if not strictly monitored.
Limited transparency on specific services provided hinders performance evaluation.
Sole-source award raises questions about the necessity and justification for excluding other bidders.

Positive Signals

Contract awarded to a known entity with potential expertise in defense engineering.
The incentive fee structure, if managed well, could align contractor and government interests towards efficient performance.
The contract supports critical defense engineering needs.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader Defense industry. The market for specialized defense engineering services is often characterized by high barriers to entry, requiring advanced technical capabilities and security clearances. Spending in this sector is driven by the need for innovation, modernization, and sustainment of complex military systems. Comparable spending benchmarks are difficult to establish without more specific service details, but significant government investment in R&D and engineering support is typical for national defense.

Small Business Impact

The data indicates that small business participation was not a stated factor in this award (ss: false, sb: false). As a sole-source contract, there were no subcontracting opportunities mandated through a competitive process. This means small businesses were not specifically targeted for set-aside portions or encouraged to participate as prime contractors. The impact on the small business ecosystem is neutral to negative, as opportunities were not proactively created or allocated.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. Accountability measures would be tied to the terms of the Cost Plus Incentive Fee (CPIF) contract, focusing on meeting performance metrics and managing costs. Transparency is limited by the sole-source nature and the lack of detailed public reporting on specific deliverables. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Research and Development Contracts
Engineering and Technical Services
Cost-Plus Contracts
Sole-Source Defense Procurements

Risk Flags

Lack of Competition
Sole-Source Award Justification Unclear
Cost-Plus Contract Risk
Limited Performance Transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $379.9 million to THE CHARLES STARK DRAPER LABORATORY, INC.. FIGF::OT::IGF CLIN 1, 7 AND 15 TES (FY16)

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $379.9 million.

What is the period of performance?

Start: 2015-10-01. End: 2017-09-30.

What specific engineering services were procured under this contract, and what were the key performance indicators (KPIs)?

The provided data identifies the North American Industry Classification System (NAICS) code as 541330, which corresponds to Engineering Services. However, it does not specify the exact nature of these services. These could range from systems engineering, design, analysis, testing, to research and development support for various defense platforms or technologies. Key performance indicators (KPIs) are also not detailed in the available information. Typically, for a Cost Plus Incentive Fee (CPIF) contract, KPIs would be established to incentivize the contractor to meet specific technical, schedule, or cost targets. Without this granular detail, it is impossible to assess the contractor's performance against defined objectives or to understand the precise value delivered.

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

The data explicitly states the contract was 'NOT COMPETED,' indicating a sole-source award. The specific justification for this determination is not provided. Common reasons for sole-source awards in defense contracting include the existence of unique capabilities or proprietary technology held by a single contractor, urgent and compelling needs where competition is impractical, or when only one responsible source is available. Without the official justification document, it is impossible to verify the validity of these reasons for The Charles Stark Draper Laboratory, Inc. This lack of transparency surrounding the sole-source decision warrants further investigation into whether competitive alternatives were truly unavailable or if the process could have been more open.

How does the cost-plus-incentive-fee (CPIF) structure typically function, and what are the associated risks for this contract?

A Cost-Plus-Incentive-Fee (CPIF) contract is a type of cost-reimbursement contract where the contractor is reimbursed for allowable costs and also receives a fee that is adjusted based on performance against pre-determined targets. The fee is typically composed of a base fee (a percentage of estimated costs) and an incentive fee. The incentive fee is designed to motivate the contractor to achieve specific objectives, such as cost savings, schedule adherence, or performance improvements. The risks associated with a CPIF contract include the potential for cost overruns if the targets are not met or if the government's cost estimates are inaccurate. There's also a risk that the incentive structure might not perfectly align contractor and government goals, or that the contractor may prioritize achieving the incentive targets over other critical aspects of the project. For this specific contract, the government bears the risk of paying more than initially anticipated if performance targets are not met efficiently.

What is the historical spending pattern for engineering services with The Charles Stark Draper Laboratory, Inc. by the Department of Defense?

The provided data only pertains to a single contract awarded from 2015-2017. To understand historical spending patterns, a broader analysis of past contracts with The Charles Stark Draper Laboratory, Inc. by the Department of Defense (DoD) would be necessary. This would involve querying federal procurement databases for all contracts awarded to this entity over a significant period (e.g., 5-10 years) and categorizing them by service type and value. Without this broader dataset, it's impossible to establish a trend or pattern. However, the fact that the DoD is awarding a contract of this magnitude suggests a continuing relationship and likely a history of engagement, given the specialized nature of defense engineering.

Are there any publicly available performance reviews or audits related to this specific contract?

The provided data snippet does not contain information regarding performance reviews or audits for this specific contract (Award ID not specified, but contract dates are FY16-FY17). Such information is typically found in contract performance reports, agency inspection reports, or through Freedom of Information Act (FOIA) requests. For government contracts, especially those with a CPIF structure, performance is monitored, and audits may be conducted by agencies like the Defense Contract Audit Agency (DCAA) or the DoD Inspector General (IG). However, these reports are not always readily available to the public, particularly if they contain sensitive or proprietary information. A thorough search of government audit repositories and agency public disclosure portals would be required to determine if any such reviews exist and are accessible.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0003016Q0014

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: $404,533,140

Exercised Options: $399,661,203

Current Obligation: $379,885,994

Actual Outlays: $9,282

Subaward Activity

Number of Subawards: 123

Total Subaward Amount: $448,084,872

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline