DoD's $938M R&D Contract with Draper Lab: A Decade of Cost-Plus Fixed Fee Spending
Contract Overview
Contract Amount: $93,793,173 ($93.8M)
Contractor: THE Charles Stark Draper Laboratory, Inc.
Awarding Agency: Department of Defense
Start Date: 2002-11-25
End Date: 2011-07-16
Contract Duration: 3,155 days
Daily Burn Rate: $29.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Place of Performance
Location: CAMBRIDGE, MIDDLESEX County, MASSACHUSETTS, 02139
Plain-Language Summary
Department of Defense obligated $93.8 million to THE CHARLES STARK DRAPER LABORATORY, INC. for work described as: Key points: 1. Significant investment of $938M over 9 years in R&D. 2. Sole-source award to a single, established contractor. 3. Potential for cost overruns inherent in Cost Plus Fixed Fee contracts. 4. Focus on advanced physical, engineering, and life sciences research.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee (CPFF) contract structure can incentivize contractors to increase costs to achieve a higher fee, especially without strong oversight. The total award amount of $937,931,73.31 over nearly a decade suggests significant spending, but the lack of competitive bidding makes direct value assessment difficult.
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 and potentially leads to higher costs for taxpayers compared to a competitive environment. The rationale for sole-sourcing is not provided but may relate to specialized capabilities.
Taxpayer Impact: The lack of competition likely resulted in a higher cost to taxpayers than if the contract had been competitively awarded.
Public Impact
Taxpayers funded nearly a billion dollars for research and development over nine years. The contract supported advanced scientific and engineering work at a specific laboratory. Long-term, sole-source contracts can reduce innovation incentives for the contractor.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Long contract duration
- Lack of transparency on specific deliverables
Positive Signals
- Supported critical R&D
- Long-term relationship with a known entity
Sector Analysis
This contract falls under Research and Development in the Physical, Engineering, and Life Sciences (NAICS 541710). Spending in this sector is crucial for technological advancement but can be prone to cost overruns due to the inherent uncertainties in research.
Small Business Impact
The contract was awarded to THE CHARLES STARK DRAPER LABORATORY, INC., a large, established entity. There is no indication that small businesses were involved as subcontractors or partners in this specific award.
Oversight & Accountability
The long duration and sole-source nature of this contract necessitate robust oversight to ensure funds are used effectively and for intended research purposes. Without competitive pressure, accountability mechanisms are critical to prevent cost creep and ensure value.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- Cost-plus contract type can incentivize higher spending.
- Long contract duration (9 years) increases risk of cost escalation.
- Lack of detailed performance metrics or outcomes in provided data.
- Potential for contractor to prioritize fee over cost efficiency.
Tags
research-and-development-in-the-physical, department-of-defense, ma, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $93.8 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 $93.8 million.
What is the period of performance?
Start: 2002-11-25. End: 2011-07-16.
What specific research outcomes or technological advancements were achieved with the $938M investment?
The contract details do not specify the exact research outcomes or technological advancements. As a sole-source, cost-plus fixed fee contract for R&D, the focus was likely on exploration and development in physical, engineering, and life sciences. Without further documentation or reporting, it's difficult to quantify the precise return on investment in terms of tangible products or breakthroughs.
What was the justification for awarding this contract on a sole-source basis?
The provided data does not include the justification for the sole-source award. Typically, sole-sourcing is employed when a unique capability or specialized expertise is required that only one contractor can provide. For R&D contracts, this might involve proprietary technology, highly specialized facilities, or critical national security research that cannot be replicated or developed competitively within the required timeframe.
How did the fixed fee component of the contract align with the actual costs incurred over the contract's life?
The contract type is Cost Plus Fixed Fee (CPFF). In CPFF contracts, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. The fixed fee is intended to remain constant regardless of the final cost. However, the effectiveness of this structure depends heavily on accurate initial cost estimation and robust oversight to prevent cost inflation that could indirectly impact future contract negotiations or overall program value.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Contractor Details
Address: 555 TECHNOLOGY SQUARE, CAMBRIDGE, MA, 90
Business Categories: Category Business, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $93,793,173
Exercised Options: $93,793,173
Current Obligation: $93,793,173
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2002-11-25
Current End Date: 2011-07-16
Potential End Date: 2011-07-16 00:00:00
Last Modified: 2011-03-31
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