DOT's FAA awards $167.6M for voice communication systems, with limited competition

Contract Overview

Contract Amount: $167,600,707 ($167.6M)

Contractor: Rohde & Schwarz USA, Inc.

Awarding Agency: Department of Transportation

Start Date: 2026-03-19

End Date: 2028-02-28

Contract Duration: 711 days

Daily Burn Rate: $235.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: DELIVERY ORDER FOR SUPPLIES AND SERVICES FOR VOICE COMMUNICATION SYSTEMS (VCS'). THIS DELIVERY ORDER DEFINITIZES LETTER CONTRACT 693KA8-25-C-00010 IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF IDIQ CONTRACT 693KA8-26-D-00002.

Place of Performance

Location: COLUMBIA, HOWARD County, MARYLAND, 21046

State: Maryland Government Spending

Plain-Language Summary

Department of Transportation obligated $167.6 million to ROHDE & SCHWARZ USA, INC. for work described as: DELIVERY ORDER FOR SUPPLIES AND SERVICES FOR VOICE COMMUNICATION SYSTEMS (VCS'). THIS DELIVERY ORDER DEFINITIZES LETTER CONTRACT 693KA8-25-C-00010 IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF IDIQ CONTRACT 693KA8-26-D-00002. Key points: 1. The contract value of $167.6 million over its period of performance represents a significant investment in critical communication infrastructure. 2. The 'NOT COMPETED' status raises questions about potential missed opportunities for cost savings through broader market engagement. 3. The firm-fixed-price contract type shifts performance risk to the contractor, Rohde & Schwarz USA, Inc. 4. The delivery order extends an existing IDIQ contract, suggesting a continued need for these specific voice communication systems. 5. The contract's duration of 711 days indicates a medium-term requirement for the specified supplies and services. 6. The primary location for performance is Maryland, suggesting a concentration of this spending within a specific geographic region.

Value Assessment

Rating: fair

Benchmarking the value of this $167.6 million delivery order is challenging without detailed cost breakdowns and comparisons to similar voice communication system procurements. The firm-fixed-price nature suggests an agreed-upon value, but the lack of competition limits the ability to assess if this price represents optimal value for the government. Further analysis would require understanding the specific technical requirements and market rates for comparable systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This delivery order was issued under a 'NOT COMPETED' status, indicating that the Federal Aviation Administration did not solicit bids from multiple offerors. This approach is typically reserved for situations where only one source is capable of meeting the requirement, or in specific circumstances defined by procurement regulations. The lack of competition means that price discovery through market forces was not utilized for this specific order.

Taxpayer Impact: The absence of competition for this substantial contract may result in higher costs for taxpayers compared to a scenario where multiple vendors could have bid, potentially driving down prices.

Public Impact

The Federal Aviation Administration (FAA) is the primary beneficiary, receiving essential voice communication systems. These systems are critical for air traffic control operations, ensuring safety and efficiency in the National Airspace System. The contract supports the modernization and maintenance of vital communication infrastructure. The geographic impact is primarily centered in Maryland, where the contractor is located and likely where services will be performed or managed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to suboptimal pricing for taxpayers.
Limited transparency into the justification for sole-source award.
Potential for vendor lock-in if this system becomes proprietary.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor.
Delivery order defines clear scope and period of performance.
Existing IDIQ contract suggests a pre-vetted and capable vendor.

Sector Analysis

The procurement falls within the telecommunications equipment and services sector, specifically focusing on voice communication systems crucial for critical infrastructure like air traffic control. The market for such specialized systems can be concentrated, with a few key players offering advanced solutions. The $167.6 million award is a significant sum, indicating a substantial requirement for these capabilities within the Federal Aviation Administration.

Small Business Impact

The data indicates that small business participation was not a stated factor in this specific delivery order, as the 'sb' field is false and the 'ss' field is also false. There is no explicit mention of small business set-asides or subcontracting requirements. This suggests that the primary contractor, Rohde & Schwarz USA, Inc., is likely a large business, and opportunities for small businesses may be limited unless they are lower-tier subcontractors.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Transportation's Office of Inspector General, which is responsible for auditing and investigating federal programs to ensure efficiency and prevent fraud. The firm-fixed-price nature of the contract provides some level of accountability by tying payment to delivery of goods and services. Transparency is limited by the sole-source award, making it harder to assess the full extent of oversight applied during the competition phase.

Related Government Programs

Federal Aviation Administration Communications Systems
Air Traffic Control Modernization Programs
Department of Transportation IT and Communications Contracts
Voice Communication System Procurements

Risk Flags

Sole-source award raises concerns about competition and potential cost overruns.
Lack of transparency regarding the justification for not competing the contract.
Potential for vendor lock-in with specialized communication systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $167.6 million to ROHDE & SCHWARZ USA, INC.. DELIVERY ORDER FOR SUPPLIES AND SERVICES FOR VOICE COMMUNICATION SYSTEMS (VCS'). THIS DELIVERY ORDER DEFINITIZES LETTER CONTRACT 693KA8-25-C-00010 IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF IDIQ CONTRACT 693KA8-26-D-00002.

Who is the contractor on this award?

The obligated recipient is ROHDE & SCHWARZ 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 $167.6 million.

What is the period of performance?

Start: 2026-03-19. End: 2028-02-28.

What is the specific justification for awarding this delivery order on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED'. A full justification would typically be documented in a Justification for Other Than Full and Open Competition (JOFOC) or a similar document. Common reasons for sole-source awards include that only one responsible source is available to meet the agency's needs, or that the agency is a sole-source provider of a unique item or service. For this specific contract, the justification would need to detail why Rohde & Schwarz USA, Inc. was the only viable option for these voice communication systems, potentially due to proprietary technology, unique integration requirements with existing FAA systems, or specific security certifications that only this vendor possesses. Without access to the JOFOC, the exact rationale remains speculative but is a critical area for further inquiry.

How does the pricing of this contract compare to similar voice communication system procurements by other federal agencies?

Direct comparison of pricing for this $167.6 million delivery order is difficult without access to detailed cost breakdowns and specific technical specifications. However, the 'NOT COMPETED' status inherently limits the ability to benchmark against market rates derived from competitive bidding. To perform a robust comparison, one would need to identify contracts for similar voice communication systems (e.g., for air traffic control, command and control, or emergency services) awarded by agencies like the Department of Defense or NASA. Analyzing the per-unit costs, total contract values relative to system capabilities, and the duration of performance for those comparable contracts would provide a clearer picture of whether the pricing here is within an expected range, or potentially inflated due to the lack of competition.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

The provided data does not specify the key performance indicators (KPIs) or service level agreements (SLAs) for this delivery order. However, for voice communication systems critical to the Federal Aviation Administration's operations, one would expect KPIs to focus on system uptime, call clarity, latency, reliability, and response times for maintenance and support. SLAs would likely define acceptable thresholds for these metrics, along with remedies or penalties for non-performance. Given the firm-fixed-price nature, the contractor is incentivized to meet these performance standards to ensure full payment and maintain a positive contractual relationship. Further details would be found in the contract's statement of work and performance requirements.

What is the track record of Rohde & Schwarz USA, Inc. in delivering similar voice communication systems to the federal government?

Rohde & Schwarz USA, Inc. is a known entity in the telecommunications and defense sectors, often providing advanced radio communication and broadcasting equipment. Their track record with the federal government would need to be assessed by reviewing past contract awards, performance evaluations (such as Contractor Performance Assessment Reporting System - CPARS), and any documented issues or successes. For this specific contract, the fact that this delivery order is part of an existing IDIQ contract (IDIQ Contract 693KA8-26-D-00002) suggests a prior relationship and likely some level of satisfactory performance that led to the establishment of the IDIQ vehicle. However, a comprehensive review of their history, particularly concerning large-scale voice communication system deployments for critical infrastructure, would be necessary to fully evaluate their capability and reliability for this $167.6 million award.

What is the historical spending trend for voice communication systems by the Federal Aviation Administration?

Analyzing historical spending trends for voice communication systems by the FAA is crucial for contextualizing the $167.6 million award. This would involve examining procurement data over several fiscal years to identify patterns in contract values, types of systems procured, and primary vendors. A significant increase or decrease in spending could indicate shifts in technology, operational needs, or modernization efforts. Understanding past spending levels helps in assessing whether this current award is an anomaly, a continuation of a trend, or part of a larger strategic investment. Without access to historical spending databases, it's difficult to provide specific figures, but such an analysis would typically reveal if the FAA consistently invests in these systems or if this represents a major new initiative or upgrade cycle.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Telephone Apparatus Manufacturing

Product/Service Code: IT AND TELECOM - NETWORK

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6821 BENJAMIN FRANKLIN DR, COLUMBIA, MD, 21046

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

Financial Breakdown

Contract Ceiling: $250,000,000

Exercised Options: $167,600,707

Current Obligation: $167,600,707

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: 693KA826D00002

IDV Type: IDC

Timeline