DoD's $465M engineering services contract with MITRE Corporation awarded without competition

Contract Overview

Contract Amount: $465,160,841 ($465.2M)

Contractor: THE Mitre Corporation

Awarding Agency: Department of Defense

Start Date: 2011-10-03

End Date: 2014-04-04

Contract Duration: 914 days

Daily Burn Rate: $508.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Defense

Official Description: FUNDING AND ADMINISTRATIVE MOD

Place of Performance

Location: ABERDEEN PROVING GROUND, HARFORD County, MARYLAND, 21005

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $465.2 million to THE MITRE CORPORATION for work described as: FUNDING AND ADMINISTRATIVE MOD Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The contract's duration of 914 days suggests a significant, long-term need for engineering services. 3. The Cost No Fee (CNF) contract type shifts risk to the government, requiring robust oversight. 4. MITRE Corporation, a federally funded research and development center (FFRDC), often receives sole-source awards due to its unique capabilities. 5. The engineering services sector is broad, and this contract's specific focus is critical for understanding its value. 6. No small business set-aside was applied, indicating no specific focus on small business participation. 7. The contract was awarded in Maryland, a hub for government contracting and defense activities.

Value Assessment

Rating: questionable

Assessing the value for money is challenging without a competitive bidding process. The Cost No Fee structure means the government bears the financial risk if costs exceed estimates. Benchmarking against similar sole-source engineering services contracts for the Department of the Army would be necessary to determine if the pricing is reasonable. Given the lack of competition, it's difficult to ascertain if the government received the best possible value.

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. This typically occurs when a specific contractor possesses unique capabilities or when urgency precludes a competitive process. The absence of multiple bidders means there was no direct price competition, which can lead to higher costs for the government compared to a fully competed contract. The justification for a sole-source award would need to be thoroughly reviewed to ensure it was appropriate.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to drive down prices, potentially resulting in higher expenditures for taxpayers. Without a competitive process, there is less assurance that the selected contractor offered the most cost-effective solution.

Public Impact

The Department of the Army benefits from specialized engineering services provided by MITRE Corporation. These services likely support critical defense initiatives and technological advancements within the military. The contract's impact is concentrated within the defense sector, primarily benefiting military operations and planning. The workforce implications are tied to the specialized engineers and technical staff employed by MITRE Corporation to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Cost No Fee contract type places financial risk on the government, necessitating strong oversight.
Lack of transparency in pricing due to non-competitive nature.
Potential for scope creep without clear performance metrics and competitive pressure.
Limited opportunity for small businesses to participate in this significant contract.

Positive Signals

MITRE Corporation is a well-established FFRDC with a proven track record in engineering and technical services.
The contract likely addresses critical national security needs requiring specialized expertise.
Long-term nature of the contract suggests a stable and ongoing requirement for these services.
The award to an FFRDC often implies a focus on objective research and development for the government.

Sector Analysis

The engineering services sector is a significant part of the federal procurement landscape, encompassing a wide range of technical and professional services. This contract falls within the broader category of professional, scientific, and technical services. Comparable spending benchmarks for engineering services contracts, especially those awarded to FFRDCs by defense agencies, would typically be in the hundreds of millions of dollars due to the complexity and criticality of the work. The market for these services is characterized by specialized expertise and often involves long-term relationships.

Small Business Impact

This contract did not include a small business set-aside, nor is there an indication of subcontracting requirements for small businesses. The award to a large FFRDC like MITRE Corporation means that opportunities for small businesses to directly participate in this specific contract are likely minimal. This could represent a missed opportunity to foster small business growth within the defense engineering services ecosystem.

Oversight & Accountability

Oversight for this Cost No Fee contract would primarily fall under the Department of the Army's contracting and program management offices. Given MITRE's status as an FFRDC, there are often specific oversight mechanisms in place through its sponsoring agency. Transparency is limited due to the sole-source nature, but performance reviews and financial audits would be crucial accountability measures. The Inspector General for the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse.

Related Government Programs

Department of Defense Research and Development Contracts
Engineering and Technical Services Procurement
Federally Funded Research and Development Centers (FFRDCs)
Army Systems Engineering Support

Risk Flags

Sole-source award
Cost-reimbursement contract type (Cost No Fee)
Lack of small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $465.2 million to THE MITRE CORPORATION. FUNDING AND ADMINISTRATIVE MOD

Who is the contractor on this award?

The obligated recipient is THE MITRE CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $465.2 million.

What is the period of performance?

Start: 2011-10-03. End: 2014-04-04.

What is MITRE Corporation's track record with the Department of the Army on similar engineering services contracts?

MITRE Corporation, as a Federally Funded Research and Development Center (FFRDC), has a long-standing relationship with various government agencies, including the Department of Defense (DoD). Their track record typically involves providing objective analysis, research, development, and systems engineering support. For the Department of the Army, MITRE has historically been involved in areas such as command and control systems, intelligence, electronic warfare, and aviation systems. While specific contract details for past engineering services can be extensive, MITRE's designation as an FFRDC implies a focus on complex, long-term, and often sole-source engagements where their unique, unbiased technical expertise is deemed essential. Their performance is generally evaluated based on their ability to provide independent technical advice and solutions to challenging defense problems, often contributing to the foundational architecture and integration of major defense systems.

How does the $465 million value of this contract compare to other engineering services contracts awarded by the DoD?

The $465 million value for this engineering services contract is substantial, placing it among significant procurements within the Department of Defense. The DoD awards numerous contracts for engineering and technical services annually, with values ranging from small business set-asides to multi-billion dollar programs. Contracts awarded to FFRDCs like MITRE Corporation, especially for complex systems engineering and research, often fall into the higher value brackets due to the specialized nature of the work and the long-term support required. For context, major defense acquisition programs often involve engineering services contracts in the hundreds of millions to billions of dollars. While this specific contract's value is high, it is not unusual for critical, long-term engineering support provided by specialized entities to the DoD to reach such figures. A more precise comparison would require analyzing the specific scope of work and comparing it to other sole-source or competitively awarded engineering contracts of similar complexity and duration within the defense sector.

What are the primary risks associated with a sole-source, Cost No Fee contract of this magnitude?

A sole-source, Cost No Fee (CNF) contract of this magnitude presents several significant risks. Firstly, the sole-source nature eliminates competitive pressure, which can lead to inflated pricing and reduced incentive for the contractor to innovate or optimize costs. The government essentially accepts the contractor's proposed costs without the benefit of market comparison. Secondly, the CNF structure places all financial risk on the government. If the contractor's actual costs exceed the estimated costs, the government is obligated to pay those actual costs, provided they are reasonable and allowable. This requires extremely robust government oversight to monitor expenditures, ensure efficiency, and prevent cost overruns. Without effective oversight, the government could face substantial unexpected costs. Additionally, there's a risk of contractor complacency or a lack of urgency due to the guaranteed payment structure and absence of competition.

What does the 'Engineering Services' classification (NAICS 541330) typically encompass for the Department of the Army?

The NAICS code 541330, 'Engineering Services,' encompasses a broad range of professional services provided by engineers. For the Department of the Army, this classification typically includes services related to the design, development, and implementation of military systems, infrastructure, and technologies. This can span areas such as weapons systems engineering, command and control systems development, cybersecurity engineering, aerospace engineering, civil engineering for military installations, environmental engineering, and systems integration. The Army utilizes these services for everything from conceptualizing new equipment and platforms to ensuring the interoperability and sustainment of existing complex systems. The specific nature of the services under this contract would dictate the precise engineering disciplines involved, but it generally relates to providing the technical expertise required to meet the Army's operational and strategic objectives.

What are the implications of awarding this contract to MITRE Corporation, a Federally Funded Research and Development Center (FFRDC)?

Awarding this contract to MITRE Corporation, an FFRDC, has specific implications. FFRDCs are established to meet long-term research and development needs of the government that cannot be effectively met by the private sector or government laboratories alone. They are intended to provide objective, independent technical advice and analysis. Consequently, FFRDCs often receive sole-source contracts because their unique structure, mission, and government-sponsored relationship provide capabilities distinct from commercial firms. This means that while the government benefits from MITRE's specialized, unbiased expertise and continuity, it also means that competitive opportunities for other firms are bypassed. The government relies on the FFRDC's integrity and its charter to act in the government's best interest, often involving sensitive or strategic national security work.

How does the contract duration of 914 days (approximately 2.5 years) influence the assessment of this award?

A contract duration of 914 days, approximately 2.5 years, indicates a significant and ongoing requirement for the engineering services being procured. This extended timeframe suggests that the work is not a short-term project but rather involves sustained support, development, or maintenance activities critical to the Department of the Army's operations. For a sole-source award, a longer duration can amplify concerns about price escalation and lack of competitive pressure over time. It necessitates robust government oversight throughout the contract period to ensure continued value and performance. Conversely, for specialized services provided by an FFRDC like MITRE, a longer duration can reflect the complexity and strategic importance of the work, allowing for deeper integration and sustained contribution to long-term defense objectives. It also implies a stable funding stream for the contractor over this period.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 7515 COLSHIRE DR, MC LEAN, VA, 22102

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: $465,160,841

Exercised Options: $465,160,841

Current Obligation: $465,160,841

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline