DoD's $130M TRIDENT GUIDANCE contract to Draper Lab shows significant cost overruns and extended duration

Contract Overview

Contract Amount: $129,862,854 ($129.9M)

Contractor: THE Charles Stark Draper Laboratory, Inc.

Awarding Agency: Department of Defense

Start Date: 2010-02-01

End Date: 2015-06-30

Contract Duration: 1,975 days

Daily Burn Rate: $65.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: TRIDENT GUIDANCE

Place of Performance

Location: CAMBRIDGE, MIDDLESEX County, MASSACHUSETTS, 02139

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $129.9 million to THE CHARLES STARK DRAPER LABORATORY, INC. for work described as: TRIDENT GUIDANCE Key points: 1. The contract's cost significantly exceeded initial estimates, indicating potential issues with pricing or scope creep. 2. The extended duration of the contract suggests complexities or unforeseen challenges in the project's execution. 3. A lack of competition raises concerns about price discovery and the potential for inflated costs. 4. The cost-plus-incentive-fee structure may incentivize cost increases if not carefully managed. 5. Performance context is limited, but the extended timeline and cost suggest potential execution challenges. 6. This contract falls within the engineering services sector, a critical area for defense capabilities.

Value Assessment

Rating: questionable

The total obligated amount of $129.9 million for TRIDENT GUIDANCE is substantial. Without direct comparable contracts for similar guidance systems, a precise value-for-money assessment is difficult. However, the contract's duration of 1975 days (over 5 years) and its cost-plus-incentive-fee structure warrant scrutiny. The final cost appears to have significantly exceeded initial projections, suggesting potential inefficiencies or scope changes that impacted the overall value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This limits the government's ability to leverage market forces to secure the best possible price and terms. The lack of bidders suggests either a highly specialized requirement that only Draper Lab could fulfill or a potential failure to adequately explore competitive options.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government may not benefit from competitive pricing. This necessitates robust oversight to ensure fair and reasonable pricing.

Public Impact

The primary beneficiaries are the Department of Defense, which receives critical guidance systems for its naval assets. The services delivered are engineering and technical support related to guidance systems, crucial for national security. The geographic impact is primarily within the defense industrial base, supporting specialized engineering firms. Workforce implications include employment for highly skilled engineers and technical personnel at The Charles Stark Draper Laboratory.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have led to higher costs for taxpayers.
Extended contract duration suggests potential project management or technical challenges.
Cost-plus-incentive-fee contracts require diligent oversight to prevent cost overruns.
Limited transparency on performance metrics makes it difficult to fully assess value.
Sole-source award raises questions about the thoroughness of market research.

Positive Signals

The contract supports a critical national security program (TRIDENT).
The Charles Stark Draper Laboratory is a recognized expert in guidance systems.
The contract likely involved highly specialized technical expertise.
The incentive fee structure, if managed well, could align contractor and government interests.

Sector Analysis

The TRIDENT GUIDANCE contract falls within the broader engineering services sector, specifically focusing on defense-related systems. This sector is characterized by high barriers to entry due to specialized knowledge, security clearances, and long-standing relationships with government agencies. The market size for such specialized defense engineering is significant, driven by continuous modernization and maintenance of military platforms. Comparable spending benchmarks are difficult to establish due to the unique nature of strategic weapon system components.

Small Business Impact

This contract was not awarded to a small business, nor does it appear to have specific small business set-aside provisions. There is no explicit information regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal, and there is no indication of efforts to leverage small business capabilities through this specific award.

Oversight & Accountability

Oversight for this contract would fall under the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. Accountability measures are typically embedded within the contract's terms, including performance standards and payment clauses. Transparency is often limited for defense contracts involving sensitive technologies, but reporting requirements should exist within the contract's framework. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Ballistic Missile Defense Programs
Strategic Weapons Systems
Aerospace Engineering Services
Defense Research and Development

Risk Flags

Potential for cost overruns due to CPIF structure and sole-source award.
Lack of competition may have resulted in suboptimal pricing.
Extended contract duration suggests execution challenges.
Limited public information on performance metrics hinders full value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $129.9 million to THE CHARLES STARK DRAPER LABORATORY, INC.. TRIDENT GUIDANCE

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 $129.9 million.

What is the period of performance?

Start: 2010-02-01. End: 2015-06-30.

What was the initial estimated cost of the TRIDENT GUIDANCE contract, and how did the final cost compare?

The provided data indicates a total obligated amount of $129,862,854.33 for the TRIDENT GUIDANCE contract. However, the initial estimated cost is not explicitly stated in the provided data. Without this baseline estimate, it is challenging to quantify the extent of any cost overruns. The final obligated amount represents the total funds committed by the government to the contractor over the life of the contract. To assess cost growth, a comparison against the original contract value or a baseline estimate established during the solicitation phase would be necessary. The significant duration of the contract (1975 days) suggests that cost adjustments or scope changes may have occurred, potentially leading to deviations from the initial financial plan.

What specific guidance systems or technologies does the TRIDENT GUIDANCE contract pertain to?

The contract is identified as 'TRIDENT GUIDANCE,' strongly suggesting it relates to the guidance systems for the U.S. Navy's TRIDENT submarine-launched ballistic missile (SLBM) program. The TRIDENT II (D5) missile system is a cornerstone of the U.S. strategic nuclear deterrent. The guidance system is a highly complex and critical component responsible for navigating the missile to its target. This involves sophisticated inertial navigation systems, flight control computers, and associated software. The Charles Stark Draper Laboratory, Inc. has a long history of developing and supporting guidance, navigation, and control (GNC) systems for strategic weapons, making them a logical sole-source provider for such critical technology.

What are the implications of a sole-source award for a contract of this magnitude?

A sole-source award, like the one for TRIDENT GUIDANCE, means the contract was awarded to a single contractor without open competition. This typically occurs when a unique capability or proprietary technology is required, and only one firm can provide it. For taxpayers, the primary implication is the potential for higher costs. Without competitive bidding, there is less pressure on the contractor to offer the lowest possible price. This necessitates rigorous government oversight to ensure the price is fair and reasonable and that the contractor is performing efficiently. It also raises questions about whether competitive alternatives were adequately explored or if market research was comprehensive enough.

How does the Cost Plus Incentive Fee (CPIF) contract type typically function, and what are its risks?

A Cost Plus Incentive Fee (CPIF) contract is used when the final costs are uncertain, and the government wants to incentivize the contractor to control costs and meet performance targets. Under a CPIF contract, the contractor is reimbursed for allowable costs plus a fee that is adjusted based on performance against target cost and target profit. If the contractor performs better than the target (e.g., lower cost), the fee increases; if they perform worse, the fee decreases. The risk for the government is that if the target cost is set too high or if performance metrics are not well-defined, the contractor may still achieve a high fee even with cost overruns. Diligent oversight is crucial to ensure targets are realistic and performance is genuinely incentivized.

What is the historical spending pattern for TRIDENT GUIDANCE or similar guidance system contracts?

The provided data shows a single definitive contract for TRIDENT GUIDANCE awarded to The Charles Stark Draper Laboratory, Inc. for approximately $130 million, spanning from February 2010 to June 2015. This represents a significant investment in a critical component of the TRIDENT missile system. Without access to broader contract databases or historical procurement data for the TRIDENT program, it's difficult to establish a long-term spending pattern. However, given the strategic importance and technological complexity of SLBM guidance systems, it is likely that sustained investment and follow-on contracts for development, sustainment, and upgrades would be typical over the lifespan of the TRIDENT missile program.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0003010Q0015

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

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: $131,107,546

Exercised Options: $131,107,546

Current Obligation: $129,862,854

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline