DoD's $16.7M R&D contract with Draper Lab shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $16,704,300 ($16.7M)

Contractor: THE Charles Stark Draper Laboratory, Inc.

Awarding Agency: Department of Defense

Start Date: 2009-07-09

End Date: 2014-07-05

Contract Duration: 1,822 days

Daily Burn Rate: $9.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: OTHER MDA RESEARCH AND DEVELOPMENT

Place of Performance

Location: CAMBRIDGE, MIDDLESEX County, MASSACHUSETTS, 02139

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $16.7 million to THE CHARLES STARK DRAPER LABORATORY, INC. for work described as: OTHER MDA RESEARCH AND DEVELOPMENT Key points: 1. Contract awarded via full and open competition, indicating broad market access. 2. Cost-plus-fixed-fee structure may incentivize cost overruns. 3. Performance period of 5 years suggests a significant, long-term research effort. 4. The contract falls under R&D in Physical, Engineering, and Life Sciences. 5. Awarded by the Missile Defense Agency, highlighting a focus on strategic defense capabilities. 6. The contractor, Charles Stark Draper Laboratory, is a known entity in defense R&D.

Value Assessment

Rating: fair

Benchmarking the value of this specific R&D contract is challenging due to its specialized nature and the lack of readily available comparable data for similar 'other MDA research and development' projects. The cost-plus-fixed-fee (CPFF) pricing structure, while common for R&D where scope can evolve, carries inherent risks of cost escalation. Without detailed breakdowns of labor, materials, and overhead, a precise value-for-money assessment is difficult, but the fixed fee component provides some cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition,' suggesting that multiple bidders were likely solicited and considered. However, the data provided does not specify the number of bids received. A full and open competition is generally favorable for price discovery, as it allows the government to receive offers from a wide range of qualified contractors, potentially leading to more competitive pricing.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing inherent in a full and open competition, which aims to ensure that the government is not overpaying for research and development services.

Public Impact

The primary beneficiaries are the Department of Defense and potentially national security through advancements in missile defense technology. Services delivered include advanced research and development in physical, engineering, and life sciences. The geographic impact is primarily within Massachusetts, where The Charles Stark Draper Laboratory, Inc. is located. Workforce implications include employment for highly skilled scientists, engineers, and technical personnel at the contractor's facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can lead to cost overruns if not managed diligently.
The specialized nature of R&D makes direct cost comparisons difficult, potentially obscuring inefficiencies.
Long performance periods require sustained oversight to ensure progress and prevent scope creep.

Positive Signals

Awarded through full and open competition, maximizing potential bidder pool.
Contractor is a recognized leader in defense R&D, suggesting technical expertise.
Fixed fee component provides a defined profit margin, offering some cost predictability.

Sector Analysis

This contract falls within the broader Research and Development sector, specifically focusing on physical, engineering, and life sciences. The Missile Defense Agency (MDA) operates within a highly specialized segment of the defense industry, characterized by long development cycles, significant technological innovation, and substantial government investment. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of R&D, but the overall defense R&D budget runs into billions annually.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded to a significant research institution, it is unlikely to have direct subcontracting opportunities for small businesses unless specified within the contract's statement of work. The focus is on specialized R&D capabilities typically held by larger organizations.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Missile Defense Agency. Accountability measures would be tied to the achievement of research milestones outlined in the contract. Transparency is generally limited for specific R&D projects due to national security sensitivities, though contract award details are publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Missile Defense Systems R&D
Advanced Technology Development
Department of Defense Research Contracts
Engineering Services Contracts
Scientific Research Services

Risk Flags

Cost-plus-fixed-fee pricing structure carries inherent risk of cost overruns.
Long performance period requires sustained oversight.
Specialized R&D makes direct value benchmarking difficult.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.7 million to THE CHARLES STARK DRAPER LABORATORY, INC.. OTHER MDA RESEARCH AND DEVELOPMENT

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 (Missile Defense Agency).

What is the total obligated amount?

The obligated amount is $16.7 million.

What is the period of performance?

Start: 2009-07-09. End: 2014-07-05.

What is the track record of The Charles Stark Draper Laboratory, Inc. with the Department of Defense, particularly in missile defense R&D?

The Charles Stark Draper Laboratory, Inc. has a long and established history of supporting the Department of Defense, particularly in areas related to guidance, navigation, and control systems, which are critical for missile defense. They have been involved in numerous high-profile defense programs, often focusing on complex R&D initiatives. Their expertise in areas like inertial navigation, sensor fusion, and system integration makes them a frequent and trusted partner for the DoD's most challenging technological endeavors. While specific contract details and performance metrics are often sensitive, their continued awards in critical R&D areas suggest a consistent record of meeting or exceeding DoD expectations in terms of technical capability and project delivery within the defense sector.

How does the $16.7 million total award value compare to similar MDA R&D contracts awarded around 2009?

Comparing the $16.7 million award value to similar Missile Defense Agency (MDA) R&D contracts from 2009 requires access to historical contract databases and specific categorization of R&D projects. However, R&D contracts within the defense sector can vary significantly in value, ranging from a few million dollars for focused studies to hundreds of millions for large-scale system development. For a contract focused on 'other MDA research and development' with a 5-year performance period, $16.7 million appears to be a moderate investment. It suggests a project of substantial scope but perhaps not a full system development effort, aligning with the 'research and development' classification rather than 'procurement' of fielded systems. Without more granular data on comparable projects, it's difficult to definitively label it as high or low, but it represents a significant commitment to advancing specific technological areas.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D, and how are they mitigated?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract, especially for R&D, is the potential for cost overruns. The contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing their profit. If costs escalate beyond initial estimates, the government bears the burden. This can disincentivize cost control by the contractor. Mitigation strategies include robust government oversight, detailed cost tracking and auditing, clearly defined contract milestones, and strong negotiation of the initial cost estimates and fixed fee. The government must actively manage the contract, ensuring that all costs are reasonable, allocable, and necessary for the R&D effort. The fixed fee itself, once negotiated, does not increase with cost overruns, providing some incentive for the contractor to manage expenses to protect their profit margin.

What does the 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)' classification imply for the contract's objectives?

This classification indicates that the contract's objectives are focused on scientific inquiry and experimentation within the domains of physics, engineering principles, and biological sciences, excluding specific biotechnology applications. For the Missile Defense Agency, this likely translates to research in areas such as advanced materials science for missile components, novel propulsion systems, sophisticated sensor technologies, advanced computing for trajectory analysis, aerodynamic research, or even human factors engineering related to missile defense operations. The 'except Biotechnology' clause suggests the R&D is not centered on genetic engineering, pharmaceuticals, or other life science applications typically associated with biotech firms. The goal is to push the boundaries of scientific knowledge and engineering capabilities to create foundational technologies or innovative solutions relevant to missile defense.

How does the 5-year performance period (2009-2014) influence the assessment of this contract's success?

A 5-year performance period for an R&D contract suggests a long-term, complex research effort where significant advancements are expected over time. Assessing the success of such a contract requires evaluating progress against defined milestones and objectives throughout its duration, not just at the end. Key indicators would include the successful development of prototypes, validation of theoretical models, achievement of specific technical performance targets, and the transition of research findings into potential applications or further development phases. If the contract concluded in 2014, a retrospective analysis would examine whether the R&D yielded the intended technological advancements and contributed to the broader goals of the Missile Defense Agency. Shortfalls in achieving key objectives or significant delays could indicate challenges in the research process, contractor performance, or the initial scope definition.

What is the significance of the contract type being a 'Definitive Contract'?

A 'Definitive Contract' is a standard, legally binding agreement that clearly outlines the rights and obligations of both the government and the contractor. Unlike other contract types like letter contracts or basic ordering agreements, a definitive contract typically contains all the necessary terms and conditions, including price, quantity, and delivery schedule, agreed upon upfront. For an R&D project spanning five years, designating it as a definitive contract implies that the core scope, objectives, and pricing structure were sufficiently defined at the outset to warrant a formal, comprehensive agreement. This provides a stable framework for the long-term research effort, ensuring clarity and reducing ambiguity for both parties throughout the contract's performance period.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 555 TECHNOLOGY SQUARE, 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: $24,832,170

Exercised Options: $24,832,170

Current Obligation: $16,704,300

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline