MITRE Corporation awarded $753.8M for DoD systems engineering R&D, a sole-source contract

Contract Overview

Contract Amount: $753,856,408 ($753.9M)

Contractor: THE Mitre Corporation

Awarding Agency: Department of Defense

Start Date: 2024-10-01

End Date: 2025-12-31

Contract Duration: 456 days

Daily Burn Rate: $1.7M/day

Competition Type: NOT COMPETED

Pricing Type: COST NO FEE

Sector: R&D

Official Description: FY25 TASK ORDER 7 - TO PROVIDE SYSTEMS ENGINEERING RESEARCH AND DEVELOPMENT SERVICES FOR THE DEPARTMENT OF DEFENSE (DOD) AND OTHER FEDERAL GOVERNMENT AGENCIES.

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $753.9 million to THE MITRE CORPORATION for work described as: FY25 TASK ORDER 7 - TO PROVIDE SYSTEMS ENGINEERING RESEARCH AND DEVELOPMENT SERVICES FOR THE DEPARTMENT OF DEFENSE (DOD) AND OTHER FEDERAL GOVERNMENT AGENCIES. Key points: 1. Contract awarded to a single, highly specialized entity, raising questions about competitive pricing. 2. Significant investment in systems engineering R&D suggests a focus on complex defense modernization. 3. Long-term contract duration (456 days) indicates a need for sustained technical expertise. 4. The absence of small business set-asides may limit opportunities for smaller innovative firms. 5. Performance is tied to a cost-plus-fixed-fee structure, requiring careful oversight of expenditures. 6. This contract falls under the broad category of physical, engineering, and life sciences R&D.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging without comparable bids. The Cost Plus Fixed Fee (CPFF) structure necessitates rigorous oversight to ensure costs remain reasonable and aligned with the research objectives. Given MITRE's unique position as a federally funded research and development center (FFRDC), direct price comparisons to commercial entities are not always appropriate, but the scale of the award warrants scrutiny of efficiency and cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. MITRE Corporation, as a designated FFRDC, often receives sole-source contracts due to its unique capabilities and established relationship with the government. While this ensures access to specialized expertise, it bypasses the competitive process, potentially leading to higher costs than if multiple vendors had bid.

Taxpayer Impact: Taxpayers may not benefit from the cost savings typically achieved through a competitive bidding process. The government relies on MITRE's unique expertise, but the lack of competition means there is less downward pressure on pricing.

Public Impact

The Department of Defense and potentially other federal agencies will benefit from advanced systems engineering research and development. Services delivered will likely enhance the design, integration, and lifecycle management of complex defense systems. The geographic impact is national, supporting federal government operations across various locations. Workforce implications include the engagement of highly skilled engineers and researchers, primarily at MITRE's facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings for taxpayers.
Cost-plus-fixed-fee contract requires robust government oversight to manage expenditures effectively.
Lack of small business participation may reduce opportunities for innovative smaller firms in this R&D space.

Positive Signals

Award to MITRE Corporation, a recognized FFRDC, ensures access to specialized and critical systems engineering expertise.
Contract supports vital research and development for national defense and federal agency modernization.
Long-term engagement allows for sustained focus on complex, long-range R&D objectives.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The market for systems engineering R&D is characterized by highly specialized firms and FFRDCs like MITRE, often engaged in complex, long-term projects for government clients. Comparable spending in this niche R&D area is substantial, driven by the need for technological advancement in defense and other critical government functions.

Small Business Impact

This contract does not appear to include a small business set-aside. As a sole-source award to MITRE Corporation, a large FFRDC, there are no direct subcontracting opportunities mandated for small businesses through this specific contract vehicle. This means that the broader ecosystem of small businesses specializing in R&D may not directly benefit from this particular award, although MITRE may engage them independently.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Defense, given its agency. As a Cost Plus Fixed Fee (CPFF) contract, rigorous financial and performance oversight is crucial to ensure that costs are reasonable and that the research objectives are met efficiently. Transparency will depend on the reporting requirements stipulated in the contract and the agency's commitment to public disclosure of R&D outcomes.

Related Government Programs

Systems Engineering Research
Department of Defense Research and Development
Federally Funded Research and Development Centers (FFRDCs)
Advanced Technology Development

Risk Flags

Sole-source award
Cost-plus contract type
Lack of small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $753.9 million to THE MITRE CORPORATION. FY25 TASK ORDER 7 - TO PROVIDE SYSTEMS ENGINEERING RESEARCH AND DEVELOPMENT SERVICES FOR THE DEPARTMENT OF DEFENSE (DOD) AND OTHER FEDERAL GOVERNMENT AGENCIES.

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 $753.9 million.

What is the period of performance?

Start: 2024-10-01. End: 2025-12-31.

What is MITRE Corporation's track record with sole-source R&D contracts for the Department of Defense?

The MITRE Corporation has a long-standing history of receiving sole-source contracts from the Department of Defense and other federal agencies, primarily due to its designation as a Federally Funded Research and Development Center (FFRDC). FFRDCs are uniquely positioned to provide objective, independent research and analysis on complex national security issues. MITRE's extensive experience includes developing and improving systems engineering processes, conducting advanced research in various technological domains, and providing strategic guidance. Their track record with sole-source awards is extensive, reflecting the government's reliance on their specialized expertise and the nature of the critical, often classified, research they undertake. This specific contract builds upon that established relationship and expertise in systems engineering.

How does the Cost Plus Fixed Fee (CPFF) structure impact the value proposition of this contract?

The Cost Plus Fixed Fee (CPFF) contract structure means the government agrees to pay the contractor's allowable costs plus a fixed fee representing profit. For value, this structure can be beneficial when the scope of work is not precisely defined, as is common in R&D, allowing flexibility. However, it places a significant burden on the government to meticulously track and audit costs to ensure they are reasonable and allocable to the contract. The 'fixed fee' component provides some predictability in profit, but the overall cost can escalate if the contractor's expenses are higher than anticipated. Effective oversight is paramount to ensure that the government receives good value and that costs are controlled, preventing potential overruns that could diminish the value proposition compared to a fixed-price contract.

What are the primary risks associated with a sole-source award for complex R&D services?

The primary risks associated with a sole-source award for complex R&D services like this one include a lack of competitive pressure on pricing, potentially leading to higher costs for the government. Without competing bids, it's difficult to benchmark the fairness of the proposed costs against market rates. There's also a risk of complacency from the contractor, as the absence of competition might reduce the incentive to innovate or optimize efficiency aggressively. Furthermore, if the contractor's unique capabilities are not as robust as assumed, or if their performance falters, the government has limited recourse to switch to a more capable provider without significant disruption. Ensuring robust contract management and performance metrics becomes even more critical in sole-source scenarios.

How does this contract align with the Department of Defense's broader strategic goals in systems engineering?

This contract directly aligns with the Department of Defense's (DoD) strategic goals by investing in critical systems engineering research and development. The DoD faces increasingly complex technological challenges, from modernizing legacy systems to developing next-generation platforms. Effective systems engineering is fundamental to ensuring interoperability, reliability, security, and affordability across its vast array of weapon systems and IT infrastructure. By funding R&D in this area, the DoD aims to enhance its ability to design, integrate, and manage these complex systems, thereby improving overall mission effectiveness, reducing lifecycle costs, and maintaining a technological edge over adversaries. The focus on R&D suggests a forward-looking approach to anticipating and addressing future defense needs.

What is the historical spending trend for systems engineering R&D by the Department of Defense?

Historical spending by the Department of Defense (DoD) on systems engineering R&D has been substantial and generally increasing, reflecting the growing complexity of military systems and the imperative to maintain technological superiority. While specific figures for 'systems engineering R&D' as a distinct category can be difficult to isolate due to its integration across various defense programs, overall R&D spending by the DoD consistently ranks among the largest government investments in research. Trends show a continuous push towards advanced technologies, digital engineering, artificial intelligence integration, and cybersecurity, all of which heavily rely on robust systems engineering principles. The consistent allocation of significant resources underscores the DoD's recognition of systems engineering as a foundational capability for its modernization efforts and future operational success.

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 › C – National Defense R&D Services

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: $787,150,585

Exercised Options: $787,150,585

Current Obligation: $753,856,408

Actual Outlays: $16,852,658

Subaward Activity

Number of Subawards: 43

Total Subaward Amount: $15,741,966

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