DoD's $17.4M Cost-Plus Fixed Fee Contract with Draper Lab: A Decade of Sole-Source Spending

Contract Overview

Contract Amount: $17,405,943 ($17.4M)

Contractor: THE Charles Stark Draper Laboratory, Inc.

Awarding Agency: Department of Defense

Start Date: 1999-10-01

End Date: 2009-06-30

Contract Duration: 3,560 days

Daily Burn Rate: $4.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92155

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $17.4 million to THE CHARLES STARK DRAPER LABORATORY, INC. for work described as: Key points: 1. Significant long-term award to a single entity suggests potential lack of competition. 2. The contract's duration (10 years) and cost-plus structure warrant scrutiny for cost efficiency. 3. Sole-source nature raises questions about price discovery and taxpayer value. 4. The award falls within the broad Defense sector, requiring specific technical expertise.

Value Assessment

Rating: questionable

The contract's Cost Plus Fixed Fee structure over a decade without clear competition benchmarks makes value assessment difficult. The total award of $17.4M over 10 years averages $1.74M annually, which needs comparison to similar R&D or specialized services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery mechanisms and may lead to higher costs compared to a competitive environment.

Taxpayer Impact: The lack of competition for a decade-long contract raises concerns about whether taxpayers received the best possible value for the funds expended.

Public Impact

Taxpayers funded a decade-long sole-source contract, potentially missing out on cost savings from competition. The Department of Defense relied on a single contractor for specialized services over an extended period. Lack of transparency in the procurement process could indicate missed opportunities for innovation from other vendors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Long contract duration
Cost-plus contract type
Lack of competition

Positive Signals

Contract awarded to a known entity
Potential for specialized expertise

Sector Analysis

This contract falls under the Defense sector, likely involving specialized research, development, or engineering services. Benchmarking requires comparison with similar sole-source R&D contracts within DoD.

Small Business Impact

The data does not indicate any specific provisions or awards made to small businesses under this contract. The sole-source nature further suggests limited opportunities for small business participation.

Oversight & Accountability

The long duration and sole-source nature of this contract warrant review by oversight bodies to ensure proper justification and value for taxpayer money.

Related Government Programs

Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Potential for cost overruns due to cost-plus structure.
Lack of competitive pressure may lead to reduced innovation.
Difficulty in assessing true market value and cost-effectiveness.
Risk of contractor lock-in and dependency.
Limited transparency in pricing and fee determination.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.4 million to THE CHARLES STARK DRAPER LABORATORY, INC.. See the official description on USAspending.

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 $17.4 million.

What is the period of performance?

Start: 1999-10-01. End: 2009-06-30.

What specific justification was provided for awarding this contract on a sole-source basis for such an extended period?

Sole-source awards typically require a documented justification, such as the unique capability of the contractor or the absence of other responsible sources. For a decade-long contract, this justification would need to be exceptionally strong and regularly re-evaluated to ensure continued necessity and prevent market distortion.

How was the 'fixed fee' component determined, and was it adjusted over the contract's 10-year lifespan?

In a Cost Plus Fixed Fee (CPFF) contract, the fixed fee is negotiated upfront and represents the contractor's profit. Determining this fee requires careful analysis of the estimated costs and the complexity of the work. Without transparency into the negotiation process and any subsequent adjustments, it's difficult to assess if the fee remained fair and reasonable throughout the contract's duration.

What performance metrics or deliverables were established to ensure the effectiveness and value of the services provided?

Effectiveness is typically measured against defined performance metrics and deliverables. For a contract of this nature and duration, clear milestones, technical objectives, and quality standards should have been established. Regular reviews and acceptance of these deliverables would be crucial to ensure the government received the intended value and that the contractor met its obligations.

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Address: 555 TECHNOLOGY SQ, CAMBRIDGE, MA, 90

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline