State Department awards $50M telecommunications support task order to HCI Management Services Company

Contract Overview

Contract Amount: $50,000,000 ($50.0M)

Contractor: HCI Management Services Company

Awarding Agency: Department of State

Start Date: 2023-04-01

End Date: 2024-12-31

Contract Duration: 640 days

Daily Burn Rate: $78.1K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: LABOR HOURS

Sector: Other

Official Description: ONE YEAR TASK ORDER UNDER 19AQMM18D0010 FOR TELECOMMUNICATIONS SUPPORT

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 $50.0 million to HCI MANAGEMENT SERVICES COMPANY for work described as: ONE YEAR TASK ORDER UNDER 19AQMM18D0010 FOR TELECOMMUNICATIONS SUPPORT Key points: 1. Contract value of $50 million over approximately 20 months indicates significant investment in telecommunications infrastructure. 2. The contract was not competed, raising questions about potential price efficiencies and market-driven innovation. 3. Performance period extends into late 2024, suggesting ongoing need for these services. 4. The North American Industry Classification System (NAICS) code 237130 points to construction of power and communication lines, though the description focuses on telecommunications support. 5. The contract type is 'Labor Hours', which can sometimes lead to cost overruns if not carefully managed. 6. The awardee, HCI Management Services Company, has secured this contract without a competitive bidding process.

Value Assessment

Rating: questionable

The contract value of $50 million for approximately 20 months of telecommunications support appears substantial. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar contracts. The 'Labor Hours' contract type also introduces a degree of uncertainty regarding the final cost, as it is directly tied to the hours worked by personnel. Further analysis would be needed to determine if this represents a fair and reasonable price for the services rendered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a sole-source or 'not available for competition' basis. This means that only one vendor, HCI Management Services Company, was solicited for this requirement. The lack of competition limits the government's ability to explore a wider range of solutions and potentially secure more favorable pricing through a bidding process. It also raises questions about the justification for not opening the contract to other qualified vendors.

Taxpayer Impact: Taxpayers may not benefit from the most competitive pricing or innovative solutions that could have emerged from a broader competition. The absence of multiple bids means there was no direct pressure on pricing from market forces.

Public Impact

The Department of State is the primary beneficiary, receiving essential telecommunications support services. The services delivered are critical for maintaining and potentially upgrading the department's communication networks. The contract is geographically focused on the District of Columbia, indicating support for operations within the capital. The contract likely supports a workforce involved in telecommunications management and potentially infrastructure maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source award requires strong justification to ensure fairness and value.
Labor hours contract type can be susceptible to scope creep and cost overruns if not meticulously managed.

Positive Signals

Award to a single vendor suggests a potentially specialized capability or a pre-existing relationship deemed necessary.
The contract duration indicates a sustained need for the services provided.

Sector Analysis

Telecommunications services are a critical component of modern government operations, supporting everything from internal communications to diplomatic outreach. The market for these services is diverse, ranging from large telecommunications providers to specialized IT and support firms. This contract, valued at $50 million, represents a significant, albeit specific, investment within this sector. Benchmarking this spending would require comparing it to other government contracts for similar telecommunications support, particularly those awarded on a sole-source basis versus competitively.

Small Business Impact

Information regarding small business participation, including set-asides or subcontracting plans, was not provided in the available data. As this was a sole-source award, the typical mechanisms for ensuring small business involvement through competition may not have been applicable. Further investigation would be needed to determine if HCI Management Services Company has any small business subcontracting commitments or if the nature of the requirement precluded such opportunities.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's contracting and program management offices. Given the sole-source nature, robust justification and documentation are crucial for accountability. Transparency regarding the specific services rendered and the justification for the sole-source award would be key oversight elements. The Inspector General's office for the Department of State would have jurisdiction to investigate any potential fraud, waste, or abuse.

Related Government Programs

Department of State IT Services Contracts
Federal Telecommunications Infrastructure Contracts
Government Wide Acquisition Contracts (GWACs) for IT Support

Risk Flags

Sole-source award lacks competitive justification.
Labor hours contract type poses risk of cost overruns.
Limited transparency on contractor's past performance.
Potential for suboptimal value due to lack of competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $50.0 million to HCI MANAGEMENT SERVICES COMPANY. ONE YEAR TASK ORDER UNDER 19AQMM18D0010 FOR TELECOMMUNICATIONS SUPPORT

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 $50.0 million.

What is the period of performance?

Start: 2023-04-01. End: 2024-12-31.

What is the specific nature of the telecommunications support being provided under this contract?

The provided data indicates the contract is for 'TELECOMMUNICATIONS SUPPORT' under a task order for '237130 Power and Communication Line and Related Structures Construction'. However, the description focuses on support rather than direct construction. This suggests the services likely encompass the management, maintenance, and potentially upgrade of telecommunications systems, networks, and related infrastructure. This could include network operations, cybersecurity for communication systems, technical support, and potentially project management for telecommunications initiatives. The NAICS code might be a broader categorization under which this specific service falls, or it could indicate support related to the physical infrastructure of communication lines.

What is the justification for awarding this contract on a sole-source basis?

The provided data states the contract was 'NOT AVAILABLE FOR COMPETITION', indicating a sole-source award. The specific justification for this determination is not included in the data. Typically, sole-source awards are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. Without the official justification document, it is impossible to definitively state why this contract was not competed. This lack of competition warrants scrutiny to ensure it was appropriate and in the government's best interest.

How does the 'Labor Hours' contract type impact cost control and value for money?

A 'Labor Hours' contract type means the government pays for the direct labor hours expended by the contractor at specified fixed hourly rates. This type of contract is often used when the extent or duration of the work cannot be determined in advance. While it allows for flexibility, it places a significant burden on the government to closely monitor contractor hours and ensure efficiency. Without strict oversight and well-defined task orders, there is a risk of cost overruns if labor hours exceed initial estimates or if productivity is low. For value for money, it is crucial that the hourly rates are competitive and that the total hours worked are reasonable for the services delivered.

What is HCI Management Services Company's track record with the Department of State or similar federal agencies?

The provided data identifies HCI Management Services Company as the awardee but does not offer details on their past performance or track record with the Department of State or other federal agencies. To assess their suitability and reliability for this $50 million telecommunications support contract, a review of their contract history, past performance evaluations, and any prior awards from the Department of State or agencies with similar needs would be necessary. This information is crucial for understanding their experience in delivering complex telecommunications services and their ability to manage large-value contracts.

Are there comparable telecommunications support contracts awarded by the Department of State or other agencies that can serve as benchmarks?

Without access to a broader database of federal contracts, it is challenging to provide specific comparable benchmarks. However, the Department of State, like many federal agencies, relies heavily on telecommunications infrastructure and support. Contracts for similar services, especially those involving network management, IT support, and infrastructure maintenance, would serve as relevant benchmarks. Comparing the $50 million value and the 'Labor Hours' pricing structure of this award to other sole-source or competitively awarded contracts for comparable services would help assess its reasonableness. The duration of approximately 20 months is also a factor in such comparisons.

What are the potential risks associated with this contract, given its sole-source nature and contract type?

The primary risks associated with this contract stem from its sole-source nature and the 'Labor Hours' contract type. The sole-source award means there is a reduced incentive for the contractor to offer the most competitive pricing, potentially leading to higher costs for the government. It also limits the government's ability to benefit from innovative solutions that might be proposed by multiple bidders. The 'Labor Hours' contract type carries the risk of cost escalation if work hours are not diligently monitored and controlled, and if the scope of work is not clearly defined and managed. There's also a risk that the government may not achieve the best possible value for its investment due to the lack of competitive pressure.

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 › IT AND TELECOM - NETWORK

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ho-Chunk, Inc.

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: $50,000,000

Exercised Options: $50,000,000

Current Obligation: $50,000,000

Actual Outlays: $12,427,342

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