Department of Defense awards $572.6M to MITRE Corporation for R&D services, with no competition

Contract Overview

Contract Amount: $572,597,272 ($572.6M)

Contractor: THE Mitre Corporation

Awarding Agency: Department of Defense

Start Date: 2019-10-01

End Date: 2020-12-31

Contract Duration: 457 days

Daily Burn Rate: $1.3M/day

Competition Type: NOT COMPETED

Pricing Type: COST NO FEE

Sector: R&D

Official Description: AWARD TASK ORDER 2, INCREMENTALLY FUNDING AND UPDATING PWS.

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $572.6 million to THE MITRE CORPORATION for work described as: AWARD TASK ORDER 2, INCREMENTALLY FUNDING AND UPDATING PWS. Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. Significant funding allocated for research and development, indicating a focus on advanced technological capabilities. 3. The contract spans over 1.5 years, suggesting a substantial and ongoing need for the services provided. 4. MITRE Corporation, a federally funded research and development center (FFRDC), often receives sole-source awards due to its unique capabilities. 5. The 'Research and Development in the Physical, Engineering, and Life Sciences' NAICS code covers a broad range of scientific endeavors. 6. The contract type is 'COST NO FEE', which means the government reimburses allowable costs but does not pay a fee to the contractor.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the broad scope of R&D services. Without competitive bids, it's difficult to assess if the $572.6 million represents a fair market price. The 'COST NO FEE' contract type implies that the government is primarily covering expenses incurred by MITRE, which can sometimes lead to less stringent cost control compared to fixed-price contracts. However, as an FFRDC, MITRE's primary mission is to serve the government's interests, which may justify a different pricing structure.

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 among multiple vendors. MITRE Corporation is a Federally Funded Research and Development Center (FFRDC), and such entities are often awarded contracts without full and open competition due to their specialized knowledge, infrastructure, and established relationship with government agencies. This approach can streamline acquisition for complex or unique requirements but limits the potential for price competition.

Taxpayer Impact: The lack of competition means taxpayers may not benefit from the cost savings that typically arise from a competitive bidding process. The government relies on MITRE's unique capabilities, but the absence of bids prevents direct price comparisons with other potential providers.

Public Impact

The Department of the Army benefits from advanced research and development services to support its technological needs. Services delivered likely contribute to advancements in physical, engineering, and life sciences relevant to defense applications. The geographic impact is primarily national, supporting federal research initiatives, though specific project locations may vary. Workforce implications include highly skilled researchers and scientists employed by MITRE Corporation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Broad R&D scope makes precise value assessment difficult without benchmarks.
Cost-plus contract type may incentivize less aggressive cost management.

Positive Signals

MITRE Corporation is a trusted FFRDC with a proven track record supporting government R&D.
The contract addresses critical research needs within the Department of Defense.
The 'COST NO FEE' structure ensures reimbursement for necessary expenses in complex research.

Sector Analysis

This contract falls within the Research and Development sector, specifically NAICS code 541715, which covers R&D in physical, engineering, and life sciences. This is a critical sector for national security and technological advancement. Spending in this area is often characterized by long-term investments, high intellectual property value, and a reliance on specialized expertise. Comparable spending benchmarks are difficult to establish due to the unique nature of FFRDC work and the specific research objectives.

Small Business Impact

As a sole-source award to a large FFRDC, this contract does not appear to include specific small business set-asides. There is no indication of subcontracting requirements for small businesses within the provided data. The focus is on MITRE's direct capabilities, suggesting limited direct impact on the small business ecosystem for this specific award.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting agency within the Department of the Army, ensuring adherence to the Performance Work Statement (PWS) and cost reimbursement guidelines. As an FFRDC, MITRE operates under specific agreements with the government that include oversight mechanisms. Transparency is generally maintained through reporting requirements, though detailed project specifics might be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Federally Funded Research and Development Centers (FFRDCs)
Department of Defense Research and Development Programs
Advanced Technology Development Contracts
Scientific and Technical Services

Risk Flags

Sole-source award
Lack of competitive pricing benchmarks
Cost-plus contract type requires strong oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $572.6 million to THE MITRE CORPORATION. AWARD TASK ORDER 2, INCREMENTALLY FUNDING AND UPDATING PWS.

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 $572.6 million.

What is the period of performance?

Start: 2019-10-01. End: 2020-12-31.

What is MITRE Corporation's track record with the Department of Defense?

MITRE Corporation has a long-standing and extensive track record of supporting the Department of Defense (DoD) and other federal agencies. As a Federally Funded Research and Development Center (FFRDC), MITRE is specifically chartered to provide objective, independent research and analysis to the government. They have been instrumental in developing and advancing critical technologies, systems engineering, and policy recommendations across various defense domains. Their work often involves complex problem-solving, strategic planning, and the integration of new technologies into military operations. The DoD relies heavily on MITRE's expertise for objective insights and technical support, making them a consistent and trusted partner.

How does the 'COST NO FEE' contract type compare to other contract types in terms of value for money?

The 'COST NO FEE' (CNF) contract type is primarily used when the contractor, like an FFRDC, is expected to operate in the government's best interest without seeking profit. In this structure, the government reimburses the contractor for all allowable costs incurred in performing the contract but does not pay any additional fee. This differs significantly from cost-plus-incentive-fee (CPIF) or cost-plus-award-fee (CPAF) contracts, which include performance incentives or award fees tied to achieving specific goals, thereby encouraging better performance and cost control. CNF contracts can offer value by ensuring that critical R&D is performed without the contractor prioritizing profit over mission objectives. However, they require robust government oversight to ensure costs are reasonable and allocable, as there's less inherent financial incentive for the contractor to minimize expenses compared to fixed-price contracts.

What are the primary risks associated with sole-source R&D contracts of this magnitude?

The primary risks associated with sole-source R&D contracts of this magnitude include potential lack of price competition, leading to higher costs for taxpayers than might be achieved through a competitive process. There's also a risk of vendor lock-in, where the government becomes overly reliant on a single provider, potentially stifling innovation from other sources. For R&D specifically, the inherent uncertainty of research outcomes poses a risk; the contract might fund extensive work that does not yield the desired technological advancements. Furthermore, without competitive benchmarking, assessing the true value and efficiency of the spending can be challenging. Robust oversight and clear performance metrics are crucial to mitigate these risks.

How does this contract fit within the broader landscape of federal R&D spending?

This contract represents a significant investment within the federal R&D landscape, specifically for the Department of Defense. Federal R&D spending is a critical component of national security, economic competitiveness, and technological advancement. Contracts like this, particularly those awarded to FFRDCs, are essential for tackling complex, long-term research challenges that require specialized expertise and infrastructure. While the total federal R&D budget is vast, individual awards of this size highlight specific strategic priorities. This contract's focus on physical, engineering, and life sciences aligns with DoD's ongoing efforts to maintain technological superiority and develop next-generation capabilities across various operational domains.

What are the implications of awarding R&D contracts to FFRDCs like MITRE versus other types of contractors?

Awarding R&D contracts to FFRDCs like MITRE has distinct implications compared to contracting with traditional for-profit companies. FFRDCs are established to provide objective, independent research and analysis, free from commercial conflicts of interest. They often possess unique technical capabilities, long-term strategic insights, and a deep understanding of government needs. This can lead to higher quality, more objective research outcomes. However, FFRDCs typically operate under specific charter agreements and are often awarded sole-source contracts, which means less direct price competition. For-profit contractors might offer more competitive pricing through bidding but may have different motivations (e.g., profit maximization) and potentially less objectivity on certain strategic issues. The choice often depends on the specific nature of the R&D requirement and the government's need for independent analysis versus market-driven solutions.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › OTHER RESEARCH/DEVELOPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

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, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $572,597,272

Exercised Options: $572,597,272

Current Obligation: $572,597,272

Actual Outlays: $100,822,573

Subaward Activity

Number of Subawards: 106

Total Subaward Amount: $11,501,456

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Parent Contract

Parent Award PIID: W56KGU18D0004

IDV Type: IDC

Timeline