DoD Awards $16.5M for Telephone Equipment, Raising Value Concerns Amidst Limited Competition
Contract Overview
Contract Amount: $16,538,383 ($16.5M)
Contractor: Alcatel-Lucent USA Inc.
Awarding Agency: Department of Defense
Start Date: 2006-03-31
End Date: 2009-05-31
Contract Duration: 1,157 days
Daily Burn Rate: $14.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: 200606!003500!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !DAAB0797DL023 !A!N! !N!0066 ! !20060331!20071030!015548597!015548597!933503385!N!LUCENT TECHNOLOGIES INC !5440 MILLSTREAM RD STE RE2!MC LEANSVILLE !NC!27301!28468!047!21!FORT CAMPBELL !CHRISTIAN !KENTUCKY !+000011097924!N!N!000000000000!5805!TELEPHONE AND TELEGRAPH EQUIPMENT !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !NOT DISCERNABLE !334210!E! !5!B!M! !A! !99990909!B! ! !N!Z!A!N!J!2!005!A! !Z!N!Z! ! !Y!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! ! ! ! !0001! !
Place of Performance
Location: FORT CAMPBELL, CHRISTIAN County, KENTUCKY, 42223
State: Kentucky Government Spending
Plain-Language Summary
Department of Defense obligated $16.5 million to ALCATEL-LUCENT USA INC. for work described as: 200606!003500!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !DAAB0797DL023 !A!N! !N!0066 ! !20060331!20071030!015548597!015548597!933503385!N!LUCENT TECHNOLOGIES INC !5440 MILLSTREAM RD STE RE2!MC LEANSVILLE !NC!27301!28468!047!21!FORT CAMPBELL !CHRI… Key points: 1. The contract awarded to Lucent Technologies Inc. for telephone and telegraph equipment totals $16.5 million. 2. The award was made under full and open competition, but the specific pricing and value proposition require further scrutiny. 3. Potential risks include the long performance period and the lack of detailed cost breakdowns, impacting taxpayer value. 4. The sector involves the manufacturing of telephone apparatus, a mature industry with established benchmarks.
Value Assessment
Rating: questionable
The contract's total value of $16.5 million for telephone equipment warrants closer examination. Without detailed cost breakdowns or comparisons to similar recent procurements, it's difficult to definitively assess if this represents a fair market price.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a broad outreach for potential bidders. However, the lack of specific details on the bidding process and the final price discovery mechanism makes it hard to evaluate the effectiveness of this competition in securing the best value.
Taxpayer Impact: The significant value of this contract necessitates robust oversight to ensure taxpayer funds are used efficiently and effectively, especially given the duration and potential for cost overruns.
Public Impact
Taxpayers may be overpaying for standard communication equipment if pricing is not benchmarked against industry standards. The long contract duration (over 3 years) could lead to price increases or the procurement of outdated technology. Lack of transparency in cost components hinders public understanding of the contract's value for money. The Department of Defense's reliance on specific vendors for essential communication equipment could be a point of concern.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of detailed cost breakdown
- Long contract duration
- Potential for outdated technology
- Limited transparency on price discovery
Positive Signals
- Awarded under full and open competition
- Clear contract type (Firm Fixed Price)
- Specific end-user location identified
Sector Analysis
This contract falls within the 'Telephone Apparatus Manufacturing' sector, specifically for electronics and communication equipment. Spending in this area is generally stable, but innovation cycles can impact the long-term value of procured hardware.
Small Business Impact
The data does not indicate whether small businesses were involved in this procurement, either as prime contractors or subcontractors. Further analysis would be needed to determine the extent of small business participation.
Oversight & Accountability
The contract specifies a Firm Fixed Price, which typically provides cost certainty. However, the long duration and lack of detailed cost transparency necessitate diligent oversight to ensure performance and prevent potential cost creep or quality issues.
Related Government Programs
- Telephone Apparatus Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Potential for overpayment due to lack of detailed cost analysis.
- Risk of technology obsolescence given the contract duration.
- Limited transparency on specific performance metrics and oversight activities.
- Unclear impact on small business participation.
- Long performance period increases exposure to market fluctuations.
Tags
telephone-apparatus-manufacturing, department-of-defense, ky, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $16.5 million to ALCATEL-LUCENT USA INC.. 200606!003500!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !DAAB0797DL023 !A!N! !N!0066 ! !20060331!20071030!015548597!015548597!933503385!N!LUCENT TECHNOLOGIES INC !5440 MILLSTREAM RD STE RE2!MC LEANSVILLE !NC!27301!28468!047!21!FORT CAMPBELL !CHRISTIAN !KENTUCKY !+000011097924!N!N!000000000000!5805!TELEPHONE AND TELEGRAPH EQUIPMENT !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !NOT DISCERNABLE !334210!E! !5!B!M! !A! !999
Who is the contractor on this award?
The obligated recipient is ALCATEL-LUCENT USA 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 $16.5 million.
What is the period of performance?
Start: 2006-03-31. End: 2009-05-31.
What is the specific breakdown of costs for the telephone and telegraph equipment, and how does it compare to industry benchmarks for similar products?
The provided data lacks a detailed cost breakdown for the $16.5 million contract. To assess value, a comparison with current market prices for comparable telephone and telegraph equipment from other manufacturers or government contracts is essential. Without this, determining if the price is competitive and fair to taxpayers is challenging.
Given the contract's duration and the rapid pace of technological change in communications, what measures are in place to mitigate the risk of procuring obsolete equipment?
The contract spans from March 2006 to May 2009. While the specific terms regarding technology refresh or obsolescence are not detailed, the Firm Fixed Price structure might incentivize the contractor to deliver current technology. However, proactive government oversight and clear performance standards are crucial to ensure the equipment remains functional and relevant throughout the contract period.
How effectively did the 'full and open competition' process ensure the best possible price and value for the government in this $16.5 million award?
While the contract was awarded under full and open competition, the limited information on the bidding process and the final price discovery makes it difficult to assess its effectiveness. A robust competition should ideally result in multiple competitive bids that drive down costs. Further investigation into the number of bids received and the evaluation criteria would be necessary to confirm optimal value realization.
Industry Classification
NAICS: Manufacturing › Communications Equipment Manufacturing › Telephone Apparatus Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SEALED BID
Offers Received: 5
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Alcatel Lucent (UEI: 275127975)
Address: 5440 MILLSTREAM RD STE RE2P18, MC LEANSVILLE, NC, 09
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: DAAB0797DL023
IDV Type: IDC
Timeline
Start Date: 2006-03-31
Current End Date: 2009-05-31
Potential End Date: 2011-06-11 00:00:00
Last Modified: 2009-03-11
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