DOT's FAA awards $2.66M for communication equipment repair, a sole-source contract with no small business set-aside

Contract Overview

Contract Amount: $2,659,979 ($2.7M)

Contractor: Frequentis USA, Inc

Awarding Agency: Department of Transportation

Start Date: 2020-12-15

End Date: 2025-12-15

Contract Duration: 1,826 days

Daily Burn Rate: $1.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: CCS-W SUSTAINMENT AND MAINTENANCE

Place of Performance

Location: WARRENTON, FAUQUIER County, VIRGINIA, 20186

State: Virginia Government Spending

Plain-Language Summary

Department of Transportation obligated $2.7 million to FREQUENTIS USA, INC for work described as: CCS-W SUSTAINMENT AND MAINTENANCE Key points: 1. The contract value of $2.66 million over five years suggests a moderate annual spend for sustainment and maintenance services. 2. As a sole-source award, the lack of competition raises questions about potential overpricing and the absence of market-driven cost efficiencies. 3. The contract's duration of 1826 days (5 years) indicates a long-term commitment to the selected vendor. 4. The absence of a small business set-aside means opportunities for smaller, specialized firms in this niche market may be limited. 5. The fixed-price contract type shifts performance risk to the contractor, but the sole-source nature may still allow for margin inflation. 6. The service category, Communication Equipment Repair and Maintenance, is critical for operational continuity within the FAA.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific niche of communication equipment repair for the FAA. Without competitive bids, it's difficult to ascertain if the $2.66 million price tag represents a fair market value or if it includes a premium due to the lack of alternatives. Comparing it to similar sustainment contracts for specialized communication systems across government agencies would be necessary for a more robust assessment, but such data is not readily available in this context. The fixed-price structure provides some cost certainty, but the absence of competition limits the ability to confirm optimal value for taxpayer dollars.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, FREQUENTIS USA, INC, was solicited. The justification for this approach is not provided but typically involves unique capabilities, proprietary technology, or a lack of viable alternatives. The absence of a competitive bidding process means that the government did not benefit from the price discovery mechanisms inherent in a multi-bidder scenario, potentially leading to higher costs than if multiple firms had competed.

Taxpayer Impact: Taxpayers may be paying a premium for this communication equipment repair and maintenance service due to the lack of competition. Without competing offers, there is less pressure on the contractor to offer the lowest possible price, and the government has limited leverage to negotiate aggressively on cost.

Public Impact

The Federal Aviation Administration (FAA) benefits directly through the continued operational readiness of its communication equipment. This contract ensures the sustainment and maintenance of critical communication systems essential for air traffic control and aviation safety. The geographic impact is likely nationwide, covering FAA facilities and operations across the United States. The contract supports specialized technical roles within FREQUENTIS USA, INC, contributing to employment in the communication equipment maintenance sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of small business participation may exclude innovative smaller firms from contributing to FAA's communication needs.
Long-term contract duration (5 years) could lock the government into a potentially suboptimal solution if market conditions change.

Positive Signals

Fixed-price contract type shifts performance risk to the contractor.
The vendor, FREQUENTIS USA, INC, is likely providing specialized expertise critical for FAA's unique communication systems.
The contract ensures continuity of essential maintenance services for a critical government function.

Sector Analysis

The Communication Equipment Repair and Maintenance sector is a specialized segment within the broader IT and telecommunications industry. This contract falls under the North American Industry Classification System (NAICS) code 811213, which covers electronic and precision equipment repair and maintenance. The market for such services is often characterized by high technical barriers to entry and a need for deep domain expertise, particularly when dealing with government-specific or legacy systems. Spending in this area is crucial for maintaining the operational integrity of critical infrastructure like the National Airspace System.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned. This means that opportunities for small businesses to participate in providing these specialized communication equipment repair and maintenance services are likely minimal. The absence of a small business focus in this sole-source award could limit the broader impact on the small business ecosystem within this niche sector.

Oversight & Accountability

Oversight for this contract would primarily fall under the Federal Aviation Administration's contracting officer and program managers. As a definitive contract, it is subject to standard federal procurement regulations and oversight. The Department of Transportation's Office of Inspector General (OIG) would have jurisdiction to investigate any potential fraud, waste, or abuse related to this award. Transparency is facilitated through contract databases like FPDS, though detailed performance metrics and justifications for sole-source awards are not always publicly accessible.

Related Government Programs

FAA Communication Systems Modernization
Air Traffic Control Equipment Maintenance
Federal Telecommunications Services
Government IT Infrastructure Support

Risk Flags

Sole-source award lacks competitive justification.
Potential for non-competitive pricing.
No small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $2.7 million to FREQUENTIS USA, INC. CCS-W SUSTAINMENT AND MAINTENANCE

Who is the contractor on this award?

The obligated recipient is FREQUENTIS USA, INC.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $2.7 million.

What is the period of performance?

Start: 2020-12-15. End: 2025-12-15.

What is the specific type of communication equipment being maintained under this contract?

The provided data does not specify the exact type of communication equipment covered by the contract. However, given the agency (Federal Aviation Administration) and the NAICS code (811213 - Communication Equipment Repair and Maintenance), it likely pertains to specialized systems used in air traffic control, aviation communication networks, navigation aids, or related infrastructure critical to the National Airspace System. Further details would typically be found in the contract's statement of work (SOW) or performance work statement (PWS), which are not included in the provided data.

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

The provided data indicates the contract was awarded as 'NOT COMPETED,' which signifies a sole-source or limited-competition award. The specific justification for this sole-source determination is not included in the abbreviated data. Typically, sole-source awards are justified when only one responsible source can provide the required supplies or services, often due to unique capabilities, proprietary technology, urgency, or a lack of market availability. The Federal Aviation Administration would have had to document and approve such a justification according to Federal Acquisition Regulation (FAR) Part 6.

How does the annual spending on this contract compare to similar FAA communication maintenance contracts?

The total contract value is approximately $2.66 million over five years, averaging around $532,000 per year. Direct comparison to similar FAA communication maintenance contracts is difficult without access to a broader dataset of FAA procurements for comparable services. However, this annual figure appears moderate for sustainment of critical infrastructure. The sole-source nature of this award complicates value assessment, as competitive benchmarks are absent. A comprehensive analysis would require examining other FAA contracts for communication equipment repair and maintenance, ideally those awarded competitively, to establish a reliable market rate.

What are the potential risks associated with a sole-source contract for critical communication equipment maintenance?

The primary risk of a sole-source contract for critical communication equipment maintenance is the potential for inflated pricing due to the absence of competitive pressure. The government may not be receiving the best possible value for its money. Additionally, there's a risk of vendor lock-in, where the government becomes dependent on a single provider, potentially hindering innovation or the adoption of newer technologies. If the sole-source contractor experiences financial difficulties or performance issues, it could significantly disrupt essential FAA operations, as there are no immediate alternative providers readily available.

What is the track record of FREQUENTIS USA, INC in providing similar services to the federal government?

Information on FREQUENTIS USA, INC's specific track record for providing similar communication equipment repair and maintenance services to the federal government is not detailed in the provided data. However, the fact that they were awarded this sole-source contract suggests they possess capabilities deemed essential by the FAA. A deeper dive into their contract history, past performance reviews, and other federal awards would be necessary to fully assess their track record. Companies like Frequentis often specialize in communication and information systems, particularly in defense and public safety sectors.

What are the implications of the firm fixed-price contract type for this sole-source award?

A firm fixed-price (FFP) contract type means the price is set and not subject to adjustment based on the contractor's cost experience. For this sole-source award, FFP provides the FAA with cost certainty, as the total amount payable is defined upfront. However, because there was no competition, the contractor (FREQUENTIS USA, INC) may have built a higher profit margin into the fixed price to account for potential risks or simply due to the lack of competitive pressure. While the FAA avoids cost overruns related to contractor inefficiency, it doesn't guarantee the lowest possible price was achieved.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Communication Equipment Repair and Maintenance

Product/Service Code: IT AND TELECOM - NETWORK

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 693KA8-20-R-00010

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8661 ROBERT FULTON DR STE 100, COLUMBIA, MD, 21046

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $3,200,000

Exercised Options: $2,659,979

Current Obligation: $2,659,979

Actual Outlays: $2,621,525

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline