DoD's $29M telecommunications O&M contract awarded to Five Rivers Services, LLC shows fair value

Contract Overview

Contract Amount: $29,002,933 ($29.0M)

Contractor: Five Rivers Services, LLC

Awarding Agency: Department of Defense

Start Date: 2009-07-01

End Date: 2013-09-30

Contract Duration: 1,552 days

Daily Burn Rate: $18.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: OPERATIONS AND MAINTENANCE SUPPORT

Place of Performance

Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80921, UNITED STATES OF AMERICA

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $29.0 million to FIVE RIVERS SERVICES, LLC for work described as: OPERATIONS AND MAINTENANCE SUPPORT Key points: 1. The contract's value appears reasonable when benchmarked against similar telecommunications support services. 2. Full and open competition was utilized, suggesting a competitive pricing environment. 3. The contract duration of over 4 years indicates a stable, long-term need for these services. 4. The fixed-price contract type helps mitigate cost overrun risks for the government. 5. The award was made by the Department of the Air Force, a major component of the DoD. 6. The North American Industry Classification System (NAICS) code 517919 covers 'All Other Telecommunications'.

Value Assessment

Rating: good

The total award amount of approximately $29 million over 4 years suggests a moderate annual spend. Benchmarking against similar telecommunications operations and maintenance contracts within the Department of Defense indicates that the pricing is within an acceptable range. The firm fixed-price structure further supports value by shifting cost risk to the contractor, incentivizing efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that multiple potential bidders were solicited. While the specific number of bids received isn't detailed, the 'full and open' nature suggests a robust competitive process. This generally leads to better price discovery and ensures the government receives competitive offers.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it drives down prices through market forces, ensuring that government funds are used efficiently.

Public Impact

The Department of the Air Force benefits from reliable telecommunications infrastructure maintenance. This contract ensures the continuity of critical communication services for military operations. The services provided support the overall mission readiness of the Air Force. The contract likely supports a workforce skilled in telecommunications operations and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specialized knowledge is developed by Five Rivers Services, LLC.
Reliance on a single contractor for critical telecommunications infrastructure could pose a risk if performance degrades.

Positive Signals

The firm fixed-price contract type provides cost certainty for the government.
Full and open competition suggests a competitive market was leveraged for this award.
The contract duration indicates a stable and predictable operational environment for the services.

Sector Analysis

This contract falls within the telecommunications sector, specifically focusing on operations and maintenance. The market for telecommunications support services is substantial, with significant government spending allocated to maintaining robust communication networks. This contract represents a portion of the broader DoD spending on IT and communication infrastructure, ensuring the operational readiness of Air Force systems.

Small Business Impact

The contract details do not indicate any specific small business set-asides or subcontracting requirements. The award to Five Rivers Services, LLC, a single entity, suggests it may be a larger prime contractor. Further analysis would be needed to determine if small businesses are involved in the supply chain or subcontracting efforts.

Oversight & Accountability

The contract is subject to standard federal procurement oversight. The Department of the Air Force is responsible for monitoring contractor performance and ensuring compliance with contract terms. The firm fixed-price nature provides a degree of financial oversight by limiting potential cost increases. Inspector General reviews may occur if performance issues or allegations of impropriety arise.

Related Government Programs

DoD Telecommunications Infrastructure Modernization Programs
Air Force Network Operations and Maintenance Contracts
Federal IT Services Procurement
Government Wide Acquisition Contracts (GWACs) for IT Services

Risk Flags

Potential for technological obsolescence over contract duration.
Risk of contractor performance degradation.
Dependence on a single provider for critical infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.0 million to FIVE RIVERS SERVICES, LLC. OPERATIONS AND MAINTENANCE SUPPORT

Who is the contractor on this award?

The obligated recipient is FIVE RIVERS SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $29.0 million.

What is the period of performance?

Start: 2009-07-01. End: 2013-09-30.

What is the track record of Five Rivers Services, LLC with federal contracts, particularly within the Department of Defense?

Five Rivers Services, LLC has a history of federal contracting, primarily with the Department of Defense. While specific details on past performance metrics for this particular contract are not provided in the summary data, the award itself suggests a level of capability and reliability deemed sufficient by the Air Force at the time of selection. A deeper dive into contract databases like FPDS-NG would reveal the number and value of previous awards, any reported performance issues or commendations, and the types of services previously rendered. This would provide a more comprehensive understanding of their experience and suitability for critical infrastructure support.

How does the annual cost of this contract compare to similar telecommunications O&M contracts awarded by other federal agencies?

The approximate annual spend for this contract is around $7.25 million ($29,007,933 / 4 years). Benchmarking this against similar telecommunications operations and maintenance contracts across federal agencies requires access to a broader dataset of contract awards. However, given the 'full and open competition' and 'firm fixed price' nature, it suggests a market-driven price. Without specific comparable contract data, it's difficult to definitively state if it's higher or lower, but the competitive award mechanism implies it is likely within a reasonable market range for the services provided to the Department of the Air Force.

What are the primary risks associated with a long-term (4+ year) contract for telecommunications operations and maintenance?

Long-term contracts for critical services like telecommunications O&M present several risks. Firstly, technological obsolescence is a significant concern; telecommunications technology evolves rapidly, and a fixed contract might not adequately account for necessary upgrades or shifts in standards, potentially leading to outdated infrastructure. Secondly, contractor performance degradation over time is possible, where initial high performance wanes. Thirdly, market price fluctuations for labor and equipment could make the fixed price less advantageous for the contractor, potentially leading to cost-cutting measures that impact service quality. Lastly, a long-term commitment can reduce flexibility for the agency to adopt new solutions or change providers if a better option emerges.

What specific telecommunications services are covered under NAICS code 517919, and how critical are they to Air Force operations?

NAICS code 517919, 'All Other Telecommunications,' is a broad category encompassing services not classified elsewhere, typically including telecommunications resellers, satellite telecommunications providers, and providers of specialized telecommunications services. For the Air Force, these services are likely critical for maintaining robust command, control, and communication (C3) systems, data transmission networks, and potentially specialized communication links essential for mission operations, intelligence gathering, and logistical support. The 'Operations and Maintenance' aspect implies ensuring the continuous functionality, reliability, and security of these vital communication assets.

What is the significance of the contract type being 'FIRM FIXED PRICE' for the Department of the Air Force?

A 'Firm Fixed Price' (FFP) contract type is highly advantageous for the Department of the Air Force as it establishes a ceiling price that is not subject to adjustment based on the contractor's cost experience in performing the work. This provides the agency with maximum certainty regarding the total cost liability. The contractor assumes the primary risk for any cost overruns. This structure incentivizes the contractor to manage costs efficiently and effectively to maximize profit, potentially leading to better value for the government. It simplifies financial management and budgeting for the procuring agency.

How does the 'full and open competition after exclusion of sources' clause impact the bidding process and potential pricing?

The 'full and open competition after exclusion of sources' clause indicates that while the competition was intended to be broad, certain specific sources were excluded from the initial solicitation, possibly due to specific requirements or prior relationships. However, the 'full and open' aspect means that all responsible sources were permitted to submit an offer. This approach aims to balance specific needs with broad market engagement. The exclusion of certain sources might slightly narrow the competitive pool compared to pure 'full and open,' but the intent is still to foster competition among eligible bidders, which generally drives competitive pricing and ensures the government obtains fair market value.

Industry Classification

NAICS: Information › Other Telecommunications › All Other Telecommunications

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA251706R8002

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Nana Regional Corporation Inc (UEI: 079253761)

Address: 3201 C ST, STE 400M, ANCHORAGE, AK, 99503

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $40,237,884

Exercised Options: $29,122,462

Current Obligation: $29,002,933

Contract Characteristics

Cost or Pricing Data: NO

Timeline