DoD Awards $405M to MITRE for Systems Engineering Services, Sole-Source Contract

Contract Overview

Contract Amount: $405,546,115 ($405.5M)

Contractor: THE Mitre Corporation

Awarding Agency: Department of Defense

Start Date: 2006-10-23

End Date: 2009-03-31

Contract Duration: 890 days

Daily Burn Rate: $455.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Defense

Official Description: SYSTEMS ENGINEERING SERVICES

Place of Performance

Location: MC LEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $405.5 million to THE MITRE CORPORATION for work described as: SYSTEMS ENGINEERING SERVICES Key points: 1. Significant contract value of over $405 million awarded to a single entity. 2. MITRE Corporation, a federally funded research and development center (FFRDC), is the sole awardee. 3. The contract was not competed, raising questions about price discovery and potential alternatives. 4. Services fall under Engineering Services (NAICS 541330), a critical sector for defense operations.

Value Assessment

Rating: questionable

The contract type is 'COST NO FEE', which can lead to cost overruns as the contractor is reimbursed for costs without a fixed profit margin. Benchmarking is difficult without a competitive process.

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 limits price discovery and may not ensure the government receives the best value.

Taxpayer Impact: The lack of competition for a contract of this magnitude raises concerns about potential overspending of taxpayer funds.

Public Impact

Taxpayers may be paying a premium due to the absence of competitive bidding. The reliance on a single provider for critical systems engineering services could pose a risk if performance issues arise. Lack of transparency in the procurement process limits public understanding of the value received for the funds expended.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-reimbursement contract type
Long contract duration (890 days)
No small business participation indicated

Positive Signals

MITRE is a well-established FFRDC with specialized expertise.
Services are critical for Department of Defense operations.

Sector Analysis

Engineering Services are crucial for the Department of Defense, encompassing design, development, and testing of complex systems. Spending benchmarks for such specialized services can vary widely, but large sole-source contracts warrant scrutiny.

Small Business Impact

There is no indication of small business participation in this contract. As a sole-source award to a large FFRDC, opportunities for small businesses were likely bypassed.

Oversight & Accountability

The sole-source nature of this contract suggests limited oversight on price competition. Further review would be needed to assess performance oversight and accountability for costs.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Lack of competition
Potential for cost overruns due to contract type
No small business set-aside
High contract value
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $405.5 million to THE MITRE CORPORATION. SYSTEMS ENGINEERING SERVICES

Who is the contractor on this award?

The obligated recipient is THE MITRE CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $405.5 million.

What is the period of performance?

Start: 2006-10-23. End: 2009-03-31.

What was the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of qualified sources. For MITRE, its status as an FFRDC often leads to sole-source awards for specific research and development tasks where its unique expertise is deemed essential and difficult to replicate through competition.

How does the 'COST NO FEE' contract type impact the government's risk and potential for cost overruns?

A 'COST NO FEE' contract means the government reimburses the contractor for all allowable costs but does not pay any fee or profit. This shifts the financial risk primarily to the government, as the contractor has less incentive to control costs beyond ensuring the work is completed. This can increase the risk of cost overruns if not managed diligently.

What is the potential impact on technological advancement and innovation when critical engineering services are awarded via sole-source contracts?

Sole-source contracts can limit technological advancement by reducing the exposure of government projects to a diverse range of innovative approaches from multiple vendors. Competition often drives innovation as companies vie to offer superior solutions. A sole-source award, while potentially efficient for specific tasks, may forgo the broader benefits of market-driven innovation.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 7515 COLSHIRE DR, MC LEAN, VA, 22102

Business Categories: Category Business, Corporate Entity Tax Exempt, Nonprofit Organization, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $406,453,729

Exercised Options: $406,453,729

Current Obligation: $405,546,115

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline