DoD's $20.3M purchase of modular jacks highlights potential overspending in electronic parts procurement
Contract Overview
Contract Amount: $20,360,218 ($20.4M)
Contractor: Communications Supply Corporation
Awarding Agency: Department of Defense
Start Date: 2011-09-20
End Date: 2011-10-11
Contract Duration: 21 days
Daily Burn Rate: $969.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 6
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: CAT5E MODULAR JACK 8W8P T568A/B MINI-COM
Place of Performance
Location: CLARKSBURG, MONTGOMERY County, MARYLAND, 20871
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $20.4 million to COMMUNICATIONS SUPPLY CORPORATION for work described as: CAT5E MODULAR JACK 8W8P T568A/B MINI-COM Key points: 1. The contract value of $20.3 million for modular jacks suggests a significant unit cost, warranting scrutiny. 2. Full and open competition was utilized, indicating a potentially robust market for these components. 3. The short duration of 21 days for a contract of this value raises questions about delivery timelines and urgency. 4. The awarded amount significantly exceeds the reported benchmark for similar items, indicating potential overpayment. 5. The contractor, Communications Supply Corporation, has a history of federal awards, but specific performance on this contract needs further review. 6. The procurement falls under 'Other Electronic Parts and Equipment Merchant Wholesalers,' a broad category that may obscure specific product value.
Value Assessment
Rating: questionable
The awarded amount of $20.3 million for modular jacks appears high when benchmarked against similar procurements. The reported benchmark of $969,534 suggests a substantial discrepancy, potentially indicating overpricing or the inclusion of ancillary services not detailed in the basic product description. Further analysis of the specific product specifications and quantity is needed to fully justify the expenditure.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, with six bidders participating. This level of competition is generally positive for price discovery and ensuring fair market value. However, the significant difference between the awarded amount and the benchmark warrants an investigation into whether the competitive process effectively drove down costs for this specific procurement.
Taxpayer Impact: Taxpayers may have overpaid due to the substantial difference between the awarded contract value and the established benchmark, despite the presence of multiple bidders.
Public Impact
The primary beneficiaries are likely the Department of Defense, receiving electronic components for its operations. The services delivered are the supply of CAT5E modular jacks, essential for network infrastructure. The geographic impact is primarily within Maryland, where the contractor is based, and wherever the components are deployed by the Army. Workforce implications are minimal, as this is a supply contract rather than a service requiring significant labor.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential overpayment indicated by benchmark comparison.
- Short contract duration for a large sum raises delivery efficiency questions.
- Broad NAICS code may obscure the true value of specialized electronic parts.
Positive Signals
- Procured under full and open competition, suggesting market availability.
- Multiple bidders participated, indicating a competitive landscape.
- Contract awarded to a known entity in federal supply.
Sector Analysis
This contract falls within the 'Other Electronic Parts and Equipment Merchant Wholesalers' sector. This is a broad category encompassing a wide range of electronic components. The market for such parts is generally competitive, but specialized or high-volume orders can command significant value. Benchmarking is crucial in this sector due to the vast differences in product specifications and quality.
Small Business Impact
The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This suggests that the procurement was focused on obtaining the best value from the broader market, potentially overlooking opportunities to engage smaller specialized suppliers.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Army's contracting and financial management divisions. Transparency is moderate, as the award details are public, but the specific justification for the high value relative to benchmarks is not immediately apparent. Inspector General jurisdiction would apply if fraud or significant mismanagement were suspected.
Related Government Programs
- Department of Defense IT Hardware Procurement
- Army Communications Equipment Purchases
- Electronic Components Supply Chain Management
- Federal Network Infrastructure Contracts
Risk Flags
- Potential overpricing compared to benchmark.
- Short contract duration for high value.
- Lack of specific quantity data hinders per-unit cost analysis.
Tags
department-of-defense, department-of-the-army, maryland, firm-fixed-price, large-contract, full-and-open-competition, electronic-parts, networking-equipment, merchant-wholesalers, high-value-procurement
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $20.4 million to COMMUNICATIONS SUPPLY CORPORATION. CAT5E MODULAR JACK 8W8P T568A/B MINI-COM
Who is the contractor on this award?
The obligated recipient is COMMUNICATIONS SUPPLY 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 $20.4 million.
What is the period of performance?
Start: 2011-09-20. End: 2011-10-11.
What is the specific product detail and quantity associated with the $20.3 million award for CAT5E modular jacks?
The provided data identifies the item as 'CAT5E MODULAR JACK 8W8P T568A/B MINI-COM'. However, the specific quantity purchased is not detailed in the provided data. The substantial award amount suggests a very large quantity or potentially a premium pricing structure. Without the quantity, a precise per-unit cost cannot be calculated, making it difficult to definitively assess value for money. Further investigation into the contract details would be required to ascertain the exact quantity and confirm if the unit price aligns with market expectations for this type of component.
How does the $20.3 million award compare to historical spending on similar electronic parts by the Department of Defense?
Historical spending data for similar electronic parts by the Department of Defense is not provided in the current dataset. However, the presence of a benchmark value of $969,534 for this contract suggests that the $20.3 million award is significantly higher. This discrepancy warrants a deeper dive into historical procurement trends for electronic components within the DoD to understand if this award represents an anomaly, a price increase over time, or a different scope of work. Analyzing past contracts for modular jacks or related networking hardware could reveal patterns of spending and identify potential areas for cost savings.
What are the specific performance metrics or quality standards associated with this contract?
The provided data does not specify the performance metrics or quality standards for the CAT5E modular jacks. As this is a 'FIRM FIXED PRICE' contract, the expectation is that the delivered goods meet a certain level of quality and functionality as defined in the contract's statement of work or technical specifications. Given the high value, it is reasonable to assume that stringent quality controls and performance expectations would be in place. However, without access to the full contract documentation, it is impossible to detail these specific standards or assess compliance.
What is the track record of Communications Supply Corporation in fulfilling federal contracts, particularly for electronic components?
Communications Supply Corporation (co: COMMUNICATIONS SUPPLY CORPORATION) has a history of federal awards, as indicated by its presence in federal procurement databases. The provided data does not offer specific details on the success rate or performance quality of their past contracts. To assess their track record thoroughly, one would need to examine past contract performance reports (e.g., Contractor Performance Assessment Reporting System - CPARS), payment histories, and any documented disputes or terminations. A review of their portfolio would reveal if they have consistently delivered electronic components to federal agencies and the general satisfaction levels reported.
Could the short contract duration (21 days) for a $20.3 million award indicate an urgent need or potential logistical challenges?
A contract duration of 21 days for an award of $20.3 million is exceptionally short and could indicate several possibilities. It might reflect an urgent operational requirement where rapid deployment of network infrastructure was critical for the Department of the Army. Alternatively, it could suggest that the 21 days represent the delivery window for the components, rather than the entire contract performance period, which might be longer. If it is indeed the total performance period, it raises questions about the feasibility of sourcing, quality assurance, and delivery of such a large quantity of goods within that timeframe, potentially leading to rushed processes or increased logistical costs.
Industry Classification
NAICS: Wholesale Trade › Household Appliances and Electrical and Electronic Goods Merchant Wholesalers › Other Electronic Parts and Equipment Merchant Wholesalers
Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 6
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Wesco International, Inc (UEI: 884051616)
Address: 22535 GATEWAY CTR DR, CLARKSBURG, MD, 06
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $20,360,218
Exercised Options: $20,360,218
Current Obligation: $20,360,218
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W52P1J10D0078
IDV Type: IDC
Timeline
Start Date: 2011-09-20
Current End Date: 2011-10-11
Potential End Date: 2011-10-11 00:00:00
Last Modified: 2011-11-08
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