DoD's $22.6M contract for MRTA/MSTA test support services awarded to Charles Stark Draper Laboratory, Inc. lacked competition

Contract Overview

Contract Amount: $22,625,986 ($22.6M)

Contractor: THE Charles Stark Draper Laboratory, Inc.

Awarding Agency: Department of Defense

Start Date: 2012-09-27

End Date: 2017-08-30

Contract Duration: 1,798 days

Daily Burn Rate: $12.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF MRTA / MSTA TEST SUPPORT SERVICES

Place of Performance

Location: CAMBRIDGE, MIDDLESEX County, MASSACHUSETTS, 02139

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $22.6 million to THE CHARLES STARK DRAPER LABORATORY, INC. for work described as: IGF::OT::IGF MRTA / MSTA TEST SUPPORT SERVICES Key points: 1. The contract utilized a Cost Plus Fixed Fee pricing structure, which can lead to cost overruns if not carefully managed. 2. Awarded as a sole-source contract, it bypassed competitive bidding processes, potentially limiting price discovery and value for money. 3. The duration of the contract (nearly 5 years) suggests a long-term need for these specialized test support services. 4. The North American Industry Classification System (NAICS) code 334220 indicates a focus on wireless communications equipment manufacturing, suggesting the services were technical in nature. 5. The contract was awarded by the Department of the Air Force, highlighting its role in supporting aerospace and defense capabilities. 6. The absence of small business set-asides indicates that this contract was not specifically targeted to support small business participation.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of publicly available comparable sole-source awards for similar specialized test support services. The Cost Plus Fixed Fee (CPFF) structure, while common for complex R&D, carries inherent risks of cost escalation. Without competitive bids, it's difficult to ascertain if the fixed fee adequately compensated the contractor for the effort or if it represented a premium due to the lack of competition. Further analysis would require access to detailed cost breakdowns and performance metrics.

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 only one responsible source can provide the required services, often due to proprietary technology, unique capabilities, or urgent needs. The lack of competition means that the government did not benefit from the price reductions and innovation that can arise from a competitive bidding process.

Taxpayer Impact: Taxpayers may have paid a higher price than necessary due to the absence of competitive pressure. The government also missed an opportunity to explore alternative solutions or providers that might have offered better value.

Public Impact

The primary beneficiaries of this contract are likely the Department of the Air Force and potentially other Department of Defense entities requiring specialized testing and evaluation for wireless communications equipment. The services delivered are crucial for ensuring the reliability and effectiveness of advanced communication systems used in defense operations. The geographic impact is primarily within the United States, specifically where the contractor, The Charles Stark Draper Laboratory, Inc., operates and where the testing activities are conducted. The contract supports a highly specialized workforce within the defense contracting sector, likely involving engineers and technical experts in radio frequency and wireless communications.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially value for money.
Cost Plus Fixed Fee contract type carries inherent risk of cost overruns.
Lack of transparency regarding the justification for sole-source award.
Long contract duration without clear performance benchmarks could obscure efficiency.
Absence of small business participation goals may limit broader economic impact.

Positive Signals

Award to a known entity (Charles Stark Draper Laboratory) suggests potential for specialized expertise.
Contract addresses a specific need within the Department of Defense for test support.
Definitive contract structure provides a framework for service delivery over a set period.

Sector Analysis

The contract falls within the broader Information Technology and Defense sectors, specifically related to the manufacturing and testing of wireless communications equipment. The NAICS code 334220 places it within the manufacturing of radio, television, and wireless communication equipment. Spending in this area is critical for national security and maintaining technological superiority. Comparable spending benchmarks would typically involve other contracts for specialized testing, evaluation, and engineering support services for defense-related communication systems, often awarded to firms with deep technical expertise.

Small Business Impact

This contract did not include any small business set-asides, nor is there an indication of subcontracting plans specifically benefiting small businesses. The award to a large, established entity suggests that the primary focus was on acquiring specialized capabilities rather than fostering small business growth. This contract's structure does not appear to directly contribute to the small business ecosystem within this specific service area.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Air Force contracting and program management offices. As a definitive contract, it would be subject to standard federal procurement regulations and oversight. The Inspector General of the Department of Defense may also have jurisdiction for audits and investigations into potential fraud, waste, or abuse. Transparency is limited due to the sole-source nature and the proprietary aspects of the services provided.

Related Government Programs

DoD Test and Evaluation Services
Air Force Communications Systems Support
Wireless Technology Development and Testing
Defense Research and Development Contracts

Risk Flags

Lack of Competition
Cost Plus Fixed Fee Pricing Risk
Long Contract Duration
Sole Source Justification Ambiguity

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.6 million to THE CHARLES STARK DRAPER LABORATORY, INC.. IGF::OT::IGF MRTA / MSTA TEST SUPPORT SERVICES

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 Air Force).

What is the total obligated amount?

The obligated amount is $22.6 million.

What is the period of performance?

Start: 2012-09-27. End: 2017-08-30.

What specific test support services were provided under this contract?

The contract data indicates "MRTA / MSTA TEST SUPPORT SERVICES." While the specific acronyms MRTA (Missile Range Test Agency) and MSTA (Missile System Test Agency) are not fully defined in the provided data, they strongly suggest services related to the testing and evaluation of missile systems, potentially including range operations, data acquisition, analysis, and system validation. These services are critical for ensuring the reliability, safety, and effectiveness of complex defense systems before deployment. The contract's NAICS code (334220) points towards wireless communications equipment, implying the testing may involve the communication aspects of these missile systems or related ground support equipment.

Why was this contract awarded on a sole-source basis?

The provided data states the contract was "NOT COMPETED," indicating a sole-source award. While the specific justification is not detailed, common reasons for sole-source awards in defense contracting include the unique capabilities of a single contractor, the need for compatibility with existing systems, urgent requirements where competition is impractical, or situations where only one source possesses the necessary proprietary technology or specialized knowledge. The Charles Stark Draper Laboratory, Inc. is known for its expertise in advanced systems engineering, particularly in areas like guidance, navigation, and control for defense applications, which could necessitate a sole-source award for highly specialized test support.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for similar services?

The Cost Plus Fixed Fee (CPFF) structure is common for research and development or complex services where the scope of work is not precisely defined at the outset, making fixed-price contracts difficult. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers less cost certainty for the government but can incentivize contractors to undertake high-risk, innovative projects. Compared to Cost Plus Incentive Fee (CPIF) or Cost Plus Award Fee (CPAF), CPFF provides less direct incentive for cost control beyond the initial cost reimbursement, as the fee is fixed regardless of the final cost. For specialized test support, FFP might be used for well-defined testing protocols, while CPFF or incentive-based cost-plus structures are often employed for more developmental or exploratory testing.

What is the historical spending trend for similar test support services within the Department of Defense?

Analyzing historical spending trends for "MRTA / MSTA TEST SUPPORT SERVICES" specifically is difficult without more granular data or defined contract categories. However, the Department of Defense (DoD) consistently invests billions annually in test and evaluation (T&E) across all branches. Spending on missile systems, their components, and associated communication technologies is a significant portion of this T&E budget. Contracts for specialized engineering, simulation, and testing services, often awarded to firms like Draper Laboratory, are recurring needs. Trends generally show increasing complexity and cost associated with testing advanced systems, driven by technological advancements and evolving threat landscapes. Sole-source awards, while scrutinized, remain a part of the DoD's contracting landscape for unique requirements.

What are the potential risks associated with a sole-source, CPFF contract of this duration?

A sole-source, CPFF contract spanning nearly five years presents several risks. Firstly, the lack of competition means the government may not be achieving the best possible price or value. Secondly, the CPFF structure, while reimbursing costs, offers limited incentive for the contractor to control expenses beyond the agreed-upon fixed fee, potentially leading to cost overruns if not rigorously monitored. Thirdly, the long duration could allow inefficiencies to persist without competitive pressure to drive improvements. Finally, without clear performance metrics tied to the fixed fee or incentives, ensuring optimal performance and accountability over such an extended period can be challenging for the contracting agency.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › Space R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: $57,261,587

Exercised Options: $34,288,768

Current Obligation: $22,625,986

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline