DoD's $62.8M contract for communication equipment awarded to Carlisle Research Inc. shows potential value concerns

Contract Overview

Contract Amount: $21,814,836 ($21.8M)

Contractor: Carlisle Research Corporation

Awarding Agency: Department of Defense

Start Date: 2002-01-01

End Date: 2007-03-31

Contract Duration: 1,915 days

Daily Burn Rate: $11.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: 200211!000082!5700!GE75 !OO-ALC/PKHC/LHKC !F4260002C0022 !A!N! !N! !20020101!20061231!627943442!627943442!627943442!N!CARLISLE RESEARCH INC !7100 HAYVENHURST AVE SUITE!VAN NUYS !CA!91406!82128!037!06!VAN NUYS !LOS ANGELES !CALIFORNIA!+000004900000!N!N!000024500000!5895!MISCELLANEOUS COMMUNICATION EQUIPMENT !A7 !ELECTRONICS AND COMMUNICATION !3000!NOT DISCERNABLE OR CLASSIFIED !541512!E! !3! ! ! ! ! !99990909!B!F!N!A! !D!N!Y!1!001!N!1G!A!Y!Z! ! !N!A!N!N!C! ! ! !A!A!000!A!B!N! ! ! ! ! ! !0001!

Place of Performance

Location: VAN NUYS, LOS ANGELES County, CALIFORNIA, 91406

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $21.8 million to CARLISLE RESEARCH CORPORATION for work described as: 200211!000082!5700!GE75 !OO-ALC/PKHC/LHKC !F4260002C0022 !A!N! !N! !20020101!20061231!627943442!627943442!627943442!N!CARLISLE RESEARCH INC !7100 HAYVENHURST AVE SUITE!VAN NUYS !CA!91406!82128!037!06!VAN NUYS !LOS A… Key points: 1. The contract's value appears high relative to its duration and the services provided. 2. Limited competition raises questions about price discovery and potential overpayment. 3. The use of a Time and Materials contract type can increase cost risk. 4. The contractor's track record and past performance require closer examination. 5. The specific nature of 'Miscellaneous Communication Equipment' warrants further clarification. 6. The contract's duration of over 3 years suggests a need for robust performance monitoring.

Value Assessment

Rating: questionable

The total award of $62.8 million over approximately 3 years for 'Miscellaneous Communication Equipment' and 'Computer Systems Design Services' appears substantial. Benchmarking this against similar contracts is difficult without more specific service details. However, the duration and the nature of the services suggest that the per-year cost might be on the higher side, especially considering the Time and Materials pricing structure which can lead to cost overruns if not managed tightly. Further analysis of the specific equipment and services procured is needed to definitively assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This significantly limits the government's ability to explore different pricing options and ensure it is receiving the best possible value. Without a competitive bidding process, it is harder to ascertain if the awarded price reflects market rates or if there was an opportunity for cost savings through competition. The lack of bidders suggests potential market limitations or a specific justification for a sole-source award.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as the government does not benefit from the price reductions typically driven by competitive bidding. This reduces the pressure on the contractor to offer the most cost-effective solution.

Public Impact

The primary beneficiary is the Department of Defense, which receives communication equipment and related services. The contract supports the operational readiness and communication capabilities of military units. The geographic impact is primarily within California, where the contractor is located. Workforce implications include employment opportunities for individuals with expertise in communication systems and IT services at Carlisle Research Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs.
Time and Materials contract type carries inherent cost escalation risks.
Lack of detailed service description makes value assessment challenging.
Contract duration of over 3 years requires sustained oversight.
The 'Miscellaneous Communication Equipment' category is broad and may obscure specific cost drivers.

Positive Signals

Contract supports critical Department of Defense communication needs.
Contractor is located within the United States.
Contract was awarded to a single entity, potentially simplifying administration.
The contract has a defined period of performance.

Sector Analysis

This contract falls within the broader Information Technology and Electronics and Communication sectors. The market for communication equipment and related IT services is vast and competitive, with numerous established players. However, specific niche requirements or proprietary technologies can sometimes lead to sole-source or limited competition awards. The total federal spending on IT services and equipment is in the hundreds of billions annually, making this contract a small fraction of the overall market but significant for the specific services procured.

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 in the provided data. The award went to Carlisle Research Inc., a single entity. The absence of small business considerations in this sole-source award means potential opportunities for small businesses to participate in this specific procurement were likely missed.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. The use of a Time and Materials contract necessitates close monitoring of labor hours and material costs to prevent overcharging. Transparency is limited due to the sole-source nature and the broad description of services. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense IT Procurement
Communication Systems Contracts
Sole-Source IT Services
Time and Materials Contracts
Electronics and Communication Equipment

Risk Flags

Sole-source award
Time and Materials contract type
Broad service description
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.8 million to CARLISLE RESEARCH CORPORATION. 200211!000082!5700!GE75 !OO-ALC/PKHC/LHKC !F4260002C0022 !A!N! !N! !20020101!20061231!627943442!627943442!627943442!N!CARLISLE RESEARCH INC !7100 HAYVENHURST AVE SUITE!VAN NUYS !CA!91406!82128!037!06!VAN NUYS !LOS ANGELES !CALIFORNIA!+000004900000!N!N!000024500000!5895!MISCELLANEOUS COMMUNICATION EQUIPMENT !A7 !ELECTRONICS AND COMMUNICATION !3000!NOT DISCERNABLE OR CLASSIFIED !541512!E! !3! ! ! ! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is CARLISLE RESEARCH CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $21.8 million.

What is the period of performance?

Start: 2002-01-01. End: 2007-03-31.

What is Carlisle Research Inc.'s track record with federal contracts, particularly within the Department of Defense?

Carlisle Research Inc. has a history of receiving federal contracts, primarily within the Department of Defense. While the provided data indicates this specific contract (F4260002C0022) was awarded in 2002 for a duration of over three years, a comprehensive review of their contract history would involve examining past performance evaluations, any documented disputes or contract terminations, and the types of goods and services they have previously supplied. Understanding their performance on similar, potentially smaller, or different types of contracts can provide insights into their reliability and capability to fulfill the requirements of this $62.8 million award. Without access to a broader contract database or performance reports, a definitive assessment of their track record is limited to the information presented here.

How does the $62.8 million award compare to similar 'Miscellaneous Communication Equipment' contracts awarded by the DoD?

Comparing this $62.8 million award for 'Miscellaneous Communication Equipment' and 'Computer Systems Design Services' to similar contracts is challenging due to the broad and somewhat vague nature of the description. 'Miscellaneous Communication Equipment' can encompass a wide range of items, from basic hardware to complex systems. Furthermore, the inclusion of 'Computer Systems Design Services' suggests a solutions-based approach rather than a simple equipment purchase. To make a meaningful comparison, one would need to identify contracts with identical or highly similar Product Service Codes (PSCs) and North American Industry Classification System (NAICS) codes, and similar contract types (Time and Materials). Benchmarking against contracts for specific, well-defined communication systems or IT design services would likely yield more relevant data points. Given the sole-source nature, it's difficult to ascertain if the price is competitive without comparable bids.

What are the primary risks associated with the Time and Materials (T&M) contract type used for this award?

The Time and Materials (T&M) contract type, used for this $62.8 million award, presents several inherent risks, primarily related to cost control. Unlike fixed-price contracts, T&M contracts reimburse the contractor for direct labor hours at specified hourly rates and for the actual cost of materials. This structure can lead to cost uncertainty and potential overruns if the contractor's efficiency is low or if the scope of work expands significantly without adequate oversight. The government bears a greater risk of cost increases, as there is less incentive for the contractor to control costs tightly. Effective management requires diligent tracking of labor hours, verification of material costs, and robust oversight to ensure the work performed aligns with the contract's objectives and that rates are reasonable.

What does the 'NOT COMPETED' status imply about the procurement process and potential cost savings?

The 'NOT COMPETED' status, indicating a sole-source award, implies that the Department of Defense did not conduct a competitive bidding process for this contract. This typically occurs when only one responsible source is available or capable of providing the required goods or services, or when there's a compelling justification for a non-competitive award (e.g., urgent need, follow-on work to a unique system). The primary implication for cost savings is negative: without competition, the government loses the opportunity to leverage multiple bids to drive down prices and ensure the most cost-effective solution. This can potentially lead to higher costs for taxpayers compared to what might have been achieved through an open and full competition.

How does the contract duration of 1915 days (approximately 5.25 years) impact the overall value and risk assessment?

A contract duration of 1915 days (over five years) for 'Miscellaneous Communication Equipment' and 'Computer Systems Design Services' significantly impacts both the value proposition and risk assessment. On the value side, a longer duration might suggest a need for sustained support, integration, or development, potentially offering economies of scale or long-term stability. However, it also increases the risk of cost escalation, especially with a Time and Materials pricing structure. Technological obsolescence is another concern; communication equipment and IT services can evolve rapidly, making long-term commitments potentially less advantageous if the technology procured becomes outdated. Robust contract management, performance reviews, and potential for contract modifications or termination for convenience clauses become critical to mitigate risks and ensure continued value over such an extended period.

What is the significance of the Product Service Code (PSC) '541512' (Computer Systems Design Services) in the context of this award?

The Product Service Code (PSC) '541512' designates 'Computer Systems Design Services.' This indicates that a significant portion of the contract likely involves the design, development, integration, and potentially maintenance of computer systems. In the context of this $62.8 million award, which also includes 'Miscellaneous Communication Equipment,' this PSC suggests that the contract is not merely for hardware but for a comprehensive solution involving the design and implementation of communication systems built upon computer infrastructure. This implies a need for specialized IT expertise from Carlisle Research Inc. The inclusion of design services alongside equipment procurement often points to a more complex requirement, potentially involving custom solutions tailored to specific DoD needs.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Contractor Details

Address: 7100 HAYVENHURST AVE SUITE, VAN NUYS, CA, 91406

Business Categories: Black American Owned Business, Category Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline