State Department Awards $86M for Network Infrastructure Services, Lacking Competition

Contract Overview

Contract Amount: $86,356,818 ($86.4M)

Contractor: HCI Management Services Company

Awarding Agency: Department of State

Start Date: 2017-11-22

End Date: 2023-03-31

Contract Duration: 1,955 days

Daily Burn Rate: $44.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: TIME AND MATERIALS

Sector: Construction

Official Description: THE SERVICES PROVIDED UNDER THE CONTRACT WILL INCLUDE NETWORK ASSESSMENTS, DESIGN AND DOCUMENTATION SERVICES, CONFIGURATION MANAGEMENT, PROVISION OF INSTALLATION MATERIALS, INVENTORY MANAGEMENT, INSTALLATION OF SPECIALIZED NETWORK SYSTEMS, INSTALLATION OF VOICE; AUDIO; AND VIDEO NETWORKS; INSTALLATION AND INTEGRATION OF NETWORK EQUIPMENT, AND SUPPORT OF LARGE-SCALE CABLE AND CONDUIT INSTALLATION EFFORTS, WHICH MAY BE CONDUCTED SIMULTANEOUSLY AT VARIOUS GEOGRAPHICAL DOS FACILITIES, OTHER GOVERNMENT AGENCIES, AND/OR AFFILIATED ORGANIZATIONS.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20006

State: District of Columbia Government Spending

Plain-Language Summary

Department of State obligated $86.4 million to HCI MANAGEMENT SERVICES COMPANY for work described as: THE SERVICES PROVIDED UNDER THE CONTRACT WILL INCLUDE NETWORK ASSESSMENTS, DESIGN AND DOCUMENTATION SERVICES, CONFIGURATION MANAGEMENT, PROVISION OF INSTALLATION MATERIALS, INVENTORY MANAGEMENT, INSTALLATION OF SPECIALIZED NETWORK SYSTEMS, INSTALLATION OF VOICE; AUDIO; AND VIDEO… Key points: 1. Significant contract value of $86.4M for comprehensive network services. 2. Limited competition noted, raising questions about price discovery. 3. Risk of cost overruns due to Time and Materials pricing. 4. Construction sector focus on power and communication lines.

Value Assessment

Rating: questionable

The contract is Time and Materials, which can lead to higher costs without fixed price controls. Benchmarking is difficult without specific task orders and detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract is listed as 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source or limited competition award. This lack of robust competition may hinder effective price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: The absence of competitive bidding could result in taxpayers paying more than necessary for these critical network services.

Public Impact

Ensures critical network infrastructure for the Department of State and other agencies. Supports large-scale installation efforts across various geographical locations. Covers a wide range of services from design to installation and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of Competition
Time and Materials Pricing
Broad Scope of Services

Positive Signals

Essential Network Services
Support for Multiple Agencies

Sector Analysis

This contract falls within the construction sector, specifically focusing on power and communication line construction. The $86.4M award is substantial for this type of service, especially given the broad scope of network infrastructure needs.

Small Business Impact

The data does not indicate whether small businesses were involved in this contract. Further analysis would be needed to determine small business participation.

Oversight & Accountability

The contract is a Delivery Order under a larger award, suggesting it may have undergone some level of review. However, the lack of competition warrants closer oversight to ensure fair pricing and effective service delivery.

Related Government Programs

Power and Communication Line and Related Structures Construction
Department of State Contracting
Department of State Programs

Risk Flags

Lack of competitive bidding may lead to inflated costs.
Time and Materials contract type increases cost uncertainty.
Broad scope could lead to scope creep and cost overruns.
Potential for vendor lock-in due to specialized services.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $86.4 million to HCI MANAGEMENT SERVICES COMPANY. THE SERVICES PROVIDED UNDER THE CONTRACT WILL INCLUDE NETWORK ASSESSMENTS, DESIGN AND DOCUMENTATION SERVICES, CONFIGURATION MANAGEMENT, PROVISION OF INSTALLATION MATERIALS, INVENTORY MANAGEMENT, INSTALLATION OF SPECIALIZED NETWORK SYSTEMS, INSTALLATION OF VOICE; AUDIO; AND VIDEO NETWORKS; INSTALLATION AND INTEGRATION OF NETWORK EQUIPMENT, AND SUPPORT OF LARGE-SCALE CABLE AND CONDUIT INSTALLATION EFFORTS, WHICH MAY BE CONDUCTED SIMULTANEOUSLY AT VARIOUS GEOGRAPHICAL DOS FACILITIES, OTHER GOVERN

Who is the contractor on this award?

The obligated recipient is HCI MANAGEMENT SERVICES COMPANY.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $86.4 million.

What is the period of performance?

Start: 2017-11-22. End: 2023-03-31.

What specific factors led to this contract being 'NOT AVAILABLE FOR COMPETITION'?

The contract's designation as 'NOT AVAILABLE FOR COMPETITION' suggests a sole-source justification or a limited competition scenario. This could be due to highly specialized requirements, existing infrastructure dependencies, or urgent needs where only a specific vendor could meet the demands within the required timeframe. Further documentation would be needed to confirm the exact reasons.

How can the Department of State mitigate the risks associated with Time and Materials pricing on this contract?

To mitigate Time and Materials risks, the Department of State should implement stringent oversight, including detailed review of all labor hours and material costs. Establishing clear not-to-exceed limits for specific tasks, requiring detailed progress reports, and conducting regular performance reviews can help control costs and ensure value for taxpayer money.

What is the potential long-term impact of awarding such a large contract without full and open competition?

Awarding large contracts without full and open competition can stifle innovation and lead to higher prices over time. It may also discourage new entrants from developing capabilities, potentially creating a reliance on incumbent contractors. This can reduce overall government efficiency and increase long-term costs for essential services.

Industry Classification

NAICS: Construction › Utility System Construction › Power and Communication Line and Related Structures Construction

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 1 MISSION DR, WINNEBAGO, NE, 68071

Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Tax Exempt, HUBZone Firm, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $88,581,727

Exercised Options: $88,581,727

Current Obligation: $86,356,818

Actual Outlays: $43,500,995

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 19AQMM18D0010

IDV Type: IDC

Timeline