DoD's $11.3M Installation Support Contract Awarded to Ultra Electronics Raises Questions on Competition and Value

Contract Overview

Contract Amount: $11,327,996 ($11.3M)

Contractor: Ultra Electronics Advanced Tactical Systems Inc

Awarding Agency: Department of Defense

Start Date: 2007-05-24

End Date: 2013-06-30

Contract Duration: 2,229 days

Daily Burn Rate: $5.1K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: IT

Official Description: INSTALLATION SUPPORT LAK06

Place of Performance

Location: AUSTIN, TRAVIS County, TEXAS, 78744

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $11.3 million to ULTRA ELECTRONICS ADVANCED TACTICAL SYSTEMS INC for work described as: INSTALLATION SUPPORT LAK06 Key points: 1. Contract awarded on a non-competitive basis, limiting price discovery and potentially increasing costs. 2. The contract's duration of over 6 years suggests a long-term need for these services. 3. The 'Cost No Fee' contract type may disincentivize cost control by the contractor. 4. Services fall under Computer Facilities Management, a sector with varying market rates. 5. The lack of a small business set-aside raises concerns about opportunities for smaller firms. 6. Awarded by the Defense Contract Management Agency, indicating a focus on defense infrastructure support.

Value Assessment

Rating: questionable

The 'Cost No Fee' contract type is often less favorable for the government as it provides less incentive for the contractor to manage costs effectively. Without competitive bidding, it's difficult to benchmark the pricing against market rates or similar contracts. The total value of over $11.3 million over 2229 days (approximately 6 years) requires closer scrutiny to ensure it represents a fair price for the installation support services provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'NOT AVAILABLE FOR COMPETITION' basis, indicating a sole-source procurement. This means that only one contractor, Ultra Electronics Advanced Tactical Systems Inc., was considered for this award. The lack of competition means there was no opportunity for other qualified vendors to bid, which can lead to higher prices and reduced innovation.

Taxpayer Impact: Sole-source awards limit taxpayer value by preventing the government from leveraging competitive market forces to secure the best possible pricing and terms.

Public Impact

The primary beneficiaries are likely Department of Defense facilities requiring installation support services. Services delivered include computer facilities management, crucial for maintaining operational readiness. The contract is geographically focused on Texas (TX), impacting facilities within that state. The contract supports the defense sector's IT infrastructure, indirectly benefiting military personnel and operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award limits price discovery and potentially inflates costs for taxpayers.
Cost No Fee contract type may reduce contractor incentive for cost efficiency.
Lack of small business participation limits opportunities for smaller, specialized firms.
Long contract duration (over 6 years) could lock the government into potentially suboptimal terms.

Positive Signals

Award to an established entity (Ultra Electronics) may suggest a level of trust or specific capability.
Focus on essential installation support ensures critical infrastructure remains functional.
Contract managed by DCMA, an agency focused on contract oversight.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically under Computer Facilities Management Services. The IT services market is vast and competitive, but specialized support for defense installations can be niche. Benchmarking this contract's value is challenging without competitive data, but IT infrastructure support is a critical component of defense operations, with significant government spending allocated annually across various agencies.

Small Business Impact

The contract was not set aside for small businesses, and the data indicates 'sb' is false. This suggests that opportunities for small businesses to participate in this specific contract, either as prime contractors or potentially through subcontracting, were not prioritized or mandated. This could limit the ecosystem of small businesses supporting defense IT infrastructure.

Oversight & Accountability

The contract is managed by the Defense Contract Management Agency (DCMA), which is responsible for overseeing contract performance and ensuring compliance. However, the 'Cost No Fee' structure and sole-source nature of the award limit the typical oversight mechanisms related to price negotiation and competitive performance. Transparency is moderate, as the award details are public, but the rationale for the sole-source award and detailed cost breakdowns are not readily available.

Related Government Programs

Defense Information Technology Contracting
IT Infrastructure Support Services
Computer Facilities Management Contracts
Department of Defense IT Spending
Sole-Source IT Contracts

Risk Flags

Sole-source award may indicate lack of competition.
Cost-reimbursement contract without fee ('Cost No Fee') can reduce contractor incentive for cost control.
Long contract duration may lead to outdated technology or inflexible terms.
Lack of small business set-aside limits opportunities for smaller firms.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.3 million to ULTRA ELECTRONICS ADVANCED TACTICAL SYSTEMS INC. INSTALLATION SUPPORT LAK06

Who is the contractor on this award?

The obligated recipient is ULTRA ELECTRONICS ADVANCED TACTICAL SYSTEMS INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $11.3 million.

What is the period of performance?

Start: 2007-05-24. End: 2013-06-30.

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

The provided data indicates the contract was 'NOT AVAILABLE FOR COMPETITION,' signifying a sole-source award. Typically, sole-source awards are justified when only one responsible source is available or capable of meeting the government's needs. This could be due to unique capabilities, proprietary technology, or urgent requirements where competition is not feasible. Without further documentation (e.g., Justification for Other Than Full and Open Competition - JOFOC), the precise reason remains speculative but implies a lack of viable alternatives at the time of award.

How does the 'Cost No Fee' contract type impact contractor performance and cost control?

A 'Cost No Fee' (CNF) contract is a type of cost-reimbursement contract where the contractor is reimbursed for allowable costs but receives no fee or profit. This structure is typically used when the government has significant control over the contractor's operations or when the work is of a nature that profit is not appropriate. While it prevents the contractor from profiting, it can also reduce their incentive to control costs rigorously, as their primary motivation (profit) is absent. Oversight becomes critical to ensure costs remain reasonable and necessary.

What are the potential risks associated with a contract of this duration (over 6 years)?

A contract spanning over six years (2229 days) carries several risks. Firstly, technology and requirements can evolve rapidly in the IT sector, potentially making the contracted services obsolete or insufficient before the contract ends. Secondly, long-term contracts can lock the government into specific vendors or solutions, hindering flexibility and the adoption of newer, potentially more cost-effective technologies. Lastly, prolonged sole-source arrangements can lead to complacency and reduced contractor responsiveness over time, as competitive pressure is absent.

Can the value of this contract be benchmarked against similar IT support contracts?

Benchmarking this $11.3 million contract is challenging due to its sole-source nature and 'Cost No Fee' structure. Standard benchmarking relies on comparing pricing data from competitively awarded contracts for similar services. Without competitive bids, it's difficult to determine if the costs incurred by Ultra Electronics are aligned with market rates. Analysis would require access to detailed cost breakdowns and comparison with other DCMA or DoD contracts for Computer Facilities Management Services, ideally those awarded competitively.

What is Ultra Electronics' track record with similar government contracts?

Ultra Electronics Advanced Tactical Systems Inc. has a history of performing government contracts, particularly within the defense sector. While specific performance details for this particular $11.3 million installation support contract are not detailed here, the company's broader portfolio likely includes various IT, C4ISR, and electronic systems support for military clients. A comprehensive assessment would involve reviewing past performance evaluations (e.g., CPARS reports) and any documented issues or successes on previous DoD contracts to gauge their reliability and capability.

What is the historical spending trend for Installation Support LAK06 or similar services by the DoD?

The provided data pertains to a single contract award from 2007-2013. To understand historical spending trends for 'Installation Support LAK06' or similar Computer Facilities Management Services within the DoD, a broader analysis of federal procurement databases (like USASpending.gov) would be necessary. This would involve tracking spending across multiple fiscal years, identifying key contractors, and observing fluctuations in contract values and award types (competitive vs. sole-source) for these services to identify patterns and potential shifts in procurement strategies.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: Undersea Sensor Systems Inc (UEI: 349084822)

Address: 4101 SMITH SCHOOL RD BLDG 4 STE 100, AUSTIN, TX, 78744

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

Financial Breakdown

Contract Ceiling: $15,897,231

Exercised Options: $11,327,997

Current Obligation: $11,327,996

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline