NOAA awards $9.3M contract for weather services in Micronesia, raising questions about competition and value

Contract Overview

Contract Amount: $9,312,742 ($9.3M)

Contractor: FSM National Government

Awarding Agency: Department of Commerce

Start Date: 2023-05-01

End Date: 2027-04-30

Contract Duration: 1,460 days

Daily Burn Rate: $6.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: WEATHER SERVICE OFFICE SUPPORT - FEDERATED STATES OF MICRONESIA

Place of Performance

Location: MICRONESIA

Plain-Language Summary

Department of Commerce obligated $9.3 million to FSM NATIONAL GOVERNMENT for work described as: WEATHER SERVICE OFFICE SUPPORT - FEDERATED STATES OF MICRONESIA Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The firm fixed-price structure provides cost certainty but may not incentivize efficiency. 3. Lack of competition raises concerns about whether the government secured the best possible value. 4. The contract duration of four years suggests a long-term need for these services. 5. Geographic location in the Federated States of Micronesia presents unique logistical challenges. 6. The service category, 'All Other Professional, Scientific, and Technical Services,' is broad and requires further definition of deliverables.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its unique geographic scope and the lack of competitive bidding. The awarded amount of $9.3 million over four years suggests an average annual cost of $2.3 million. Without comparable contracts for similar services in remote Pacific island nations, it's difficult to definitively assess if the pricing is competitive. The firm fixed-price nature offers predictability but doesn't inherently guarantee optimal value compared to a competitively bid contract where price pressures typically drive down costs.

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 potential vendors. This approach is typically used when only one vendor can provide the required services, or in cases of urgent need. The absence of competition means there was no opportunity for multiple companies to bid, which could have led to lower prices and a wider range of innovative solutions. The lack of a competitive process limits the government's ability to ensure it received the most cost-effective option available.

Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competitive pressure. Without competing bids, there's a risk that the awarded price is higher than it would have been in a more open market, meaning less efficient use of public funds.

Public Impact

The primary beneficiaries are the residents and infrastructure within the Federated States of Micronesia, who will receive essential weather forecasting and related services. The contract supports critical meteorological operations, including data collection, analysis, and dissemination of weather information. This service is vital for disaster preparedness, public safety, and economic activities such as agriculture and fishing in the region. The contract ensures the continuity of weather services, which are particularly crucial for small island developing states vulnerable to climate change and extreme weather events.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits transparency and potential cost savings.
Broad service description ('All Other Professional, Scientific, and Technical Services') lacks specificity, increasing risk of scope creep or unmet needs.
Geographic isolation may lead to higher operational costs and logistical complexities.
Contract duration of four years without clear performance milestones could reduce contractor incentive for exceptional performance.

Positive Signals

Firm fixed-price contract provides budget certainty for the agency.
Contract ensures essential weather services for a vulnerable region.
Long-term contract indicates a stable, ongoing requirement for these critical services.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically related to meteorological support. The market for such specialized services, particularly in remote international locations, can be limited. While the broader market for scientific and technical services is vast, niche requirements like this often involve a smaller pool of qualified contractors. Benchmarking is difficult without more specific details on the services provided and comparable international agreements.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the specialized nature and geographic location, it is unlikely that small businesses were primary targets for this specific award. Subcontracting opportunities for small businesses are not explicitly mentioned and would depend on the prime contractor's approach.

Oversight & Accountability

Oversight will primarily be conducted by the National Oceanic and Atmospheric Administration (NOAA) within the Department of Commerce. The contract's firm fixed-price nature simplifies financial oversight, focusing on deliverable completion. Transparency is limited due to the sole-source nature. Accountability rests on the contractor's ability to meet the defined service requirements within the specified timeframe and budget. Further oversight details would depend on internal NOAA procedures and any specific reporting requirements outlined in the contract.

Related Government Programs

NOAA Weather Radio
National Weather Service
Climate Prediction Center
National Hurricane Center
International Weather and Climate Services

Risk Flags

Sole-source award
Lack of competition
Broad service description
Geographic remoteness

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $9.3 million to FSM NATIONAL GOVERNMENT. WEATHER SERVICE OFFICE SUPPORT - FEDERATED STATES OF MICRONESIA

Who is the contractor on this award?

The obligated recipient is FSM NATIONAL GOVERNMENT.

Which agency awarded this contract?

Awarding agency: Department of Commerce (National Oceanic and Atmospheric Administration).

What is the total obligated amount?

The obligated amount is $9.3 million.

What is the period of performance?

Start: 2023-05-01. End: 2027-04-30.

What specific technical services are included under 'All Other Professional, Scientific, and Technical Services' for this contract?

The contract's description as 'All Other Professional, Scientific, and Technical Services' (NAICS code 541990) is quite broad. For this specific NOAA contract supporting the Federated States of Micronesia, it likely encompasses a range of meteorological and related technical support activities. This could include maintaining and operating weather monitoring equipment, data collection and transmission, basic weather analysis, forecasting support, and potentially technical assistance to local meteorological staff. However, without the full contract statement of work, the precise deliverables, performance standards, and reporting requirements remain undefined. This ambiguity necessitates careful monitoring by NOAA to ensure the contractor provides the necessary services effectively and efficiently, and that the services align with the agency's mission objectives in the region.

Why was this contract awarded on a sole-source basis instead of being competed?

Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For this contract supporting weather services in the Federated States of Micronesia, potential justifications could include unique expertise, existing infrastructure, or specific relationships with the FSM government that only one contractor possesses. Alternatively, urgent and compelling circumstances might have necessitated a sole-source award to ensure continuity of essential services. The Department of Commerce, through NOAA, would have had to document the rationale for not competing the award, likely citing factors such as specialized knowledge of the region's meteorological conditions, established operational presence, or the lack of other qualified vendors capable of performing the work under the given constraints. This decision, however, bypasses the competitive process, which normally ensures the government receives the best value through price and performance trade-offs.

How does the firm fixed-price (FFP) contract type affect cost control and contractor performance?

A Firm Fixed-Price (FFP) contract type, like the one used here, obligates the contractor to complete the work for a predetermined price, regardless of the actual costs incurred. This structure offers significant cost certainty for the government, as the total expenditure is known upfront. It also places the risk of cost overruns on the contractor. For performance, FFP contracts incentivize the contractor to control costs and manage resources efficiently to maximize profit. However, they may offer less incentive for the contractor to exceed basic performance standards or to innovate beyond the contract requirements, as there is no direct financial reward for doing so. In a sole-source context, the FFP structure still provides budget predictability but doesn't inherently guarantee that the fixed price represents the best possible value achievable through competition.

What are the potential risks associated with providing weather services in the Federated States of Micronesia?

Providing weather services in the Federated States of Micronesia presents several unique risks. Geographically, the region is vast, consisting of numerous islands spread across a large ocean area, which can complicate the deployment, maintenance, and operation of weather monitoring equipment. Logistical challenges related to transportation, communication infrastructure, and access to remote locations can increase operational costs and potentially delay service delivery or equipment repair. Furthermore, the region is highly susceptible to tropical cyclones and other severe weather phenomena, requiring robust forecasting capabilities and rapid response mechanisms. The contractor must also navigate potential cultural and regulatory differences, and ensure reliable power and communication links, which may be less stable than in more developed regions. These factors collectively increase the complexity and risk profile of the contract.

What is the historical spending pattern for similar weather support services by NOAA or other agencies?

Historical spending data for similar weather support services, especially those provided internationally and on a sole-source basis, is not readily available in a directly comparable format. NOAA and other agencies like the Department of Defense (through its meteorological units) do spend significant amounts on weather data, forecasting, and related technical services. However, these contracts often involve large-scale domestic operations, advanced research, or specific defense-related applications. International support contracts, particularly for remote locations like Micronesia, are less common and often tailored to specific geopolitical or developmental aid contexts. Without access to NOAA's internal procurement history or detailed contract databases, it's difficult to establish a precise historical spending benchmark. The $9.3 million awarded here over four years represents a substantial investment for services in a specific, limited geographic area, highlighting the unique costs associated with such operations.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 1305M323QNWWW0005

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: RAHN ANNIM BLDG 2ND FLOOR PALIKIR, PALIKIR, FM, 96941

Business Categories: Category Business, DoT Certified Disadvantaged Business Enterprise, Foreign Government, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $11,801,852

Exercised Options: $9,312,742

Current Obligation: $9,312,742

Actual Outlays: $5,387,793

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline