Air Force awards $324M option year 2 to MITRE for technical services, continuing a sole-source relationship

Contract Overview

Contract Amount: $324,034,335 ($324.0M)

Contractor: THE Mitre Corporation

Awarding Agency: Department of Defense

Start Date: 2010-10-01

End Date: 2011-09-30

Contract Duration: 364 days

Daily Burn Rate: $890.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Other

Official Description: EXERCISE OPTION YEAR 2 FOR FA8721-09-C-0002

Place of Performance

Location: BEDFORD, MIDDLESEX County, MASSACHUSETTS, 01730

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $324.0 million to THE MITRE CORPORATION for work described as: EXERCISE OPTION YEAR 2 FOR FA8721-09-C-0002 Key points: 1. Contract awarded via sole-source justification, raising questions about potential cost efficiencies from competition. 2. The contract's value represents a significant investment in specialized technical support services. 3. Performance context is crucial given the long-standing relationship and lack of competitive bidding. 4. Sector positioning is within professional, scientific, and technical services, a broad but critical category. 5. Risk indicators include the absence of a competitive process to validate pricing and scope.

Value Assessment

Rating: fair

Assessing the value for money is challenging without competitive benchmarks. The contract's cost-plus-no-fee structure suggests that the government bears the risk of cost overruns, while the contractor is reimbursed for allowable costs plus a fixed fee. This structure can incentivize cost control but also requires robust oversight to ensure efficiency. Comparing this to similar sole-source contracts for comparable services would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed. The absence of multiple bidders limits the government's ability to leverage market forces to achieve the best possible price and terms. While sole-source awards can be justified for unique capabilities or urgent needs, they typically result in less price discovery compared to full and open competition.

Taxpayer Impact: Taxpayers may not be receiving the most competitive pricing due to the lack of a bidding process. This can lead to higher costs than might be achieved in a competitive environment.

Public Impact

The Department of the Air Force benefits from continuous technical expertise and support. Services delivered likely encompass a range of scientific, engineering, and technical advisory functions. Geographic impact is primarily within the operational sphere of the Air Force, potentially nationwide or global. Workforce implications are tied to the specialized skills MITRE provides, supporting critical Air Force missions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source awards require strong justification and oversight to ensure necessity and fair pricing.
Cost-plus-no-fee structure shifts cost overrun risk to the government.

Positive Signals

The MITRE Corporation is a well-established entity with a long history of supporting government technical needs.
Continuity of service is ensured, preventing disruption to critical Air Force operations.
Specialized expertise is likely being leveraged, which may be difficult to replicate through competition.

Sector Analysis

This contract falls within the Professional, Scientific, and Technical Services sector, which is a broad category encompassing a wide range of specialized expertise. The market for these services is large and diverse, with many firms offering various technical and advisory capabilities. The Air Force's reliance on MITRE for these services highlights the importance of specialized, mission-critical support within the defense industry. Comparable spending benchmarks would depend on the specific nature of the technical services provided.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there information indicating significant subcontracting opportunities for small businesses. The award to a large, established organization like MITRE suggests that the primary focus is on specialized capabilities rather than fostering small business participation through this specific vehicle.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program management office within the Department of the Air Force. Accountability measures would be defined in the contract terms and conditions, focusing on performance deliverables and adherence to the cost-plus-no-fee structure. Transparency is limited by the sole-source nature of the award, but contract modifications and performance reports should be available through federal procurement databases.

Related Government Programs

Defense Technical Information Center (DTIC)
Air Force Research Laboratory (AFRL) Contracts
DoD Science and Technology Support Contracts

Risk Flags

Sole-source award lacks competitive justification.
Cost-plus-no-fee structure shifts cost risk to government.
Limited transparency due to non-competitive nature.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $324.0 million to THE MITRE CORPORATION. EXERCISE OPTION YEAR 2 FOR FA8721-09-C-0002

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 Air Force).

What is the total obligated amount?

The obligated amount is $324.0 million.

What is the period of performance?

Start: 2010-10-01. End: 2011-09-30.

What is MITRE Corporation's track record with the Department of Defense and specifically the Air Force?

The MITRE Corporation has a long-standing and extensive track record of supporting the Department of Defense (DoD) and the Air Force. As a federally funded research and development center (FFRDC), MITRE is specifically chartered to provide objective, data-driven analysis and engineering support to government sponsors. Their work often involves complex systems engineering, research, development, and program management across various defense domains. Historically, MITRE has been instrumental in developing and advising on critical defense systems, cybersecurity initiatives, and strategic planning for the Air Force and other military branches. Their continued sole-source awards suggest a high level of trust and perceived value in their unique capabilities and institutional knowledge within the defense sector.

How does the cost-plus-no-fee (CPFF) contract type typically compare in terms of value and risk to other contract types for similar services?

The Cost-Plus-Fixed-Fee (CPFF) contract type, which is similar to Cost-Plus-No-Fee (CPNF) in that costs are reimbursed, is often used for research and development or complex services where the scope is not well-defined. In a CPFF contract, the contractor is reimbursed for allowable costs plus a predetermined fixed fee representing their profit. The government bears the risk of cost overruns. Compared to fixed-price contracts, CPFF generally offers less certainty on final cost for the government but allows for greater flexibility and access to specialized expertise. For services where innovation or exploration is key, CPFF can be valuable. However, for more routine or well-defined services, fixed-price contracts often provide better value and cost certainty for the government by incentivizing contractor efficiency.

What are the primary risks associated with sole-source contract awards like this one?

The primary risks associated with sole-source contract awards are related to cost and competition. Without a competitive bidding process, there is a reduced incentive for the contractor to offer the lowest possible price, potentially leading to higher costs for the government and taxpayers. Price discovery is limited, making it harder to benchmark against market rates. Furthermore, sole-source awards can stifle innovation by preventing other capable companies from entering the market or proposing alternative solutions. There's also a risk of complacency from the incumbent contractor, as the lack of competition reduces the pressure to continuously improve performance or efficiency. Robust justification and oversight are critical to mitigate these risks.

What is the typical annual spending for 'All Other Professional, Scientific, and Technical Services' (NAICS 541990) across the federal government?

The federal government's spending on 'All Other Professional, Scientific, and Technical Services' (NAICS 541990) can fluctuate annually but generally represents a significant portion of the services acquisition budget. While specific annual totals vary, this category often encompasses a wide array of specialized support functions across numerous agencies, including research, consulting, testing, and technical advisory services that don't fit neatly into more specific NAICS codes. Historically, federal spending in this broad services category can range from tens to hundreds of billions of dollars annually, depending on economic conditions, national priorities, and agency needs. This particular contract, at over $324 million for an option year, represents a substantial investment within this service category for the Department of Defense.

How does the 'definitive contract' award type influence the analysis of this contract's flexibility and long-term commitment?

A 'definitive contract' is a standard contract type that, once awarded, is considered firm and binding. In this context, it signifies a formal agreement for services. When used with option years, as seen here, it indicates a commitment to potentially extend the services over a specified period, subject to the exercise of those options. The flexibility within a definitive contract is typically governed by its specific clauses, such as termination for convenience or modification provisions. The fact that this is an option year exercise under a definitive contract suggests that the initial terms and conditions are being extended, providing continuity but also implying a degree of long-term commitment from the government to the contractor's services, albeit with the option to not proceed.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

Product/Service Code: RESEARCH AND DEVELOPMENT › OTHER RESEARCH/DEVELOPMENT

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: 202 BURLINGTON RD, BEDFORD, MA, 01730

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: $1,114,530,345

Exercised Options: $660,215,050

Current Obligation: $324,034,335

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Timeline