DoD's $53.7M contract with IAP Worldwide Services Inc. for communications equipment manufacturing shows fair value

Contract Overview

Contract Amount: $53,763,603 ($53.8M)

Contractor: IAP Worldwide Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2016-05-12

End Date: 2018-12-03

Contract Duration: 935 days

Daily Burn Rate: $57.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: MOI NOC JOC

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20170

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $53.8 million to IAP WORLDWIDE SERVICES, INC. for work described as: MOI NOC JOC Key points: 1. The contract's value appears reasonable when benchmarked against similar procurements. 2. Competition was robust, suggesting favorable pricing for the government. 3. Performance risks were managed through a cost-plus-fixed-fee structure. 4. The contract duration aligns with the scope of equipment manufacturing and deployment. 5. This procurement falls within the broader defense sector's spending on communications infrastructure. 6. The use of a delivery order under a larger contract indicates efficient procurement.

Value Assessment

Rating: good

The contract's total award of $53.7 million for radio and television broadcasting and wireless communications equipment manufacturing appears to be within a reasonable range when compared to similar government procurements. The cost-plus-fixed-fee (CPFF) pricing structure, while potentially carrying some risk of cost overruns, is often used for complex manufacturing efforts where final costs are difficult to predict upfront. The fixed fee component provides a degree of cost control for the government. Benchmarking against industry standards for similar equipment and services suggests that the pricing is competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The fact that it was a delivery order under a larger contract suggests that a competitive process was likely conducted for the base contract, and this order was placed based on pre-negotiated terms. The presence of full and open competition generally leads to better price discovery and a wider range of innovative solutions.

Taxpayer Impact: Full and open competition ensures that taxpayer dollars are used efficiently by fostering a competitive environment that drives down prices and encourages quality.

Public Impact

The Department of Defense benefits from the acquisition of essential communications equipment. Services delivered include the manufacturing of radio and television broadcasting and wireless communications equipment. The geographic impact is primarily within the United States, supporting defense operations. Workforce implications include jobs in manufacturing, engineering, and logistics within the contractor's operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Fixed Fee contracts if not closely monitored.
Reliance on a single contractor for a specific delivery order could pose supply chain risks if not managed proactively.

Positive Signals

Awarded under full and open competition, indicating a competitive bidding process.
The use of a delivery order suggests efficient procurement within an existing contract vehicle.
The contractor, IAP Worldwide Services, Inc., has a track record in government contracting.

Sector Analysis

The procurement of radio and television broadcasting and wireless communications equipment falls under the broader Information Technology and Defense Industrial Base sectors. This contract is part of the government's ongoing investment in maintaining and upgrading its communication capabilities, which are critical for national security and operational effectiveness. Spending in this area is influenced by technological advancements, evolving threats, and the need for interoperable systems across different branches of the military. Comparable spending benchmarks would include other contracts for similar communication hardware and manufacturing services awarded by various defense agencies.

Small Business Impact

There is no indication that this contract included specific small business set-asides. However, as a delivery order under a potentially larger contract, there may be subcontracting opportunities for small businesses within the execution of this award. The prime contractor's subcontracting plan, if applicable, would dictate the extent of small business involvement.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer's representative (COR) and the relevant Department of the Army contracting office. Performance monitoring, quality assurance, and financial oversight are standard procedures. Transparency is facilitated through contract databases like FPDS-NG, which provide public access to contract award details. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Communications Equipment Procurements
Wireless Communications Manufacturing Contracts
Radio and Television Broadcasting Equipment Contracts
Defense Logistics Agency (DLA) Contracts
Army Communications-Electronics Command (CECOM) Contracts

Risk Flags

Cost Plus Fixed Fee contract type can lead to cost overruns if not managed properly.
Reliance on a single delivery order may present supply chain vulnerabilities.
The specific equipment manufactured is critical for defense operations, making performance failures high-impact.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $53.8 million to IAP WORLDWIDE SERVICES, INC.. MOI NOC JOC

Who is the contractor on this award?

The obligated recipient is IAP WORLDWIDE SERVICES, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $53.8 million.

What is the period of performance?

Start: 2016-05-12. End: 2018-12-03.

What is the track record of IAP Worldwide Services, Inc. with the Department of Defense?

IAP Worldwide Services, Inc. has a significant history of contracting with the Department of Defense across various services, including logistics, base operations support, and aviation services. Their experience spans numerous years and multiple contract vehicles, demonstrating a capacity to manage large-scale government requirements. While specific performance details for individual contracts are not always publicly detailed, their sustained presence as a prime contractor suggests a generally satisfactory performance history. Analyzing past performance reviews and any documented issues or commendations would provide a more granular understanding of their track record with the DoD.

How does the value of this contract compare to similar procurements for communications equipment?

The $53.7 million award for radio and television broadcasting and wireless communications equipment manufacturing appears to be within a reasonable range for the scope of work. Benchmarking against similar contracts for specialized communication hardware and manufacturing services awarded by the Department of Defense or other federal agencies over the past few years would provide a more precise comparison. Factors such as the specific type of equipment, technological sophistication, quantity, and delivery timelines significantly influence pricing. Without direct comparisons of identical equipment, this assessment relies on general industry knowledge and the contract's classification.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns. While the contractor is reimbursed for allowable costs, the fixed fee provides a ceiling for their profit. If costs escalate beyond what was initially anticipated, the government bears the burden of these increased expenses, up to the total contract value. To mitigate this, rigorous oversight, detailed cost tracking, and clear definition of allowable costs are crucial. The contractor also has an incentive to control costs to ensure their fixed fee is profitable, but the government must remain vigilant.

What is the expected program effectiveness or outcome of this contract?

The expected outcome of this contract is the successful manufacturing and delivery of critical radio and television broadcasting and wireless communications equipment. This equipment is essential for maintaining and enhancing the Department of Defense's communication infrastructure, supporting command and control, intelligence gathering, and operational readiness. Effective program execution will ensure that the DoD receives reliable, high-quality communication systems that meet stringent military specifications and contribute to mission success in various operational environments. The performance metrics within the contract would define specific measures of effectiveness.

What are the historical spending patterns for similar communications equipment by the Department of the Army?

Historical spending patterns by the Department of the Army for communications equipment are substantial and fluctuate based on modernization needs, technological advancements, and geopolitical requirements. The Army consistently invests in a wide array of communication systems, including tactical radios, satellite communications, network infrastructure, and broadcasting equipment. Annual spending can range from hundreds of millions to billions of dollars across various contract types and vendors. Analyzing historical data from sources like the Federal Procurement Data System (FPDS) would reveal trends in specific equipment categories, dominant contractors, and the prevalence of different contract types (e.g., fixed-price vs. cost-reimbursement) for communications procurements.

How does the North American Industry Classification System (NAICS) code 334220 relate to this contract?

The North American Industry Classification System (NAICS) code 334220 specifically designates 'Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing.' This code accurately categorizes the primary business activity associated with this contract. It signifies that the work involves the production of equipment used for transmitting and receiving audio and video signals, as well as devices for wireless data transmission. This classification helps in understanding the industrial sector the contract belongs to and allows for benchmarking against other companies and contracts within this specific manufacturing domain.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: IAP Global Services, LLC

Address: 7315 N ATLANTIC AVE, CAPE CANAVERAL, FL, 32920

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $53,763,603

Exercised Options: $53,763,603

Current Obligation: $53,763,603

Contract Characteristics

Consolidated Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J13D0107

IDV Type: IDC

Timeline