DoD's $44.7M telecommunications order to undisclosed foreign awardees lacked competition, raising value concerns

Contract Overview

Contract Amount: $44,668,880 ($44.7M)

Contractor: Foreign Awardees (undisclosed)

Awarding Agency: Department of Defense

Start Date: 2010-03-07

End Date: 2015-06-05

Contract Duration: 1,916 days

Daily Burn Rate: $23.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: AFGNW000155 (CSA) TELECOMMUNICATIONS SERVICE ORDERED UNDER BASIC AGREEMENT HC102112H2013

Plain-Language Summary

Department of Defense obligated $44.7 million to FOREIGN AWARDEES (UNDISCLOSED) for work described as: AFGNW000155 (CSA) TELECOMMUNICATIONS SERVICE ORDERED UNDER BASIC AGREEMENT HC102112H2013 Key points: 1. The contract was awarded as a purchase order under a basic agreement, bypassing competitive bidding. 2. Lack of competition suggests potential for overpayment and reduced value for taxpayer funds. 3. The undisclosed foreign awardees present transparency and accountability challenges. 4. The contract duration of over five years indicates a significant, long-term commitment. 5. The firm-fixed-price contract type offers some cost certainty but doesn't mitigate the lack of competition. 6. The telecommunications sector is critical, but this award method is not ideal for ensuring best value.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is difficult due to the undisclosed foreign awardees and the lack of a competitive process. Without competing bids, it's impossible to determine if the $44.7 million price represents a fair market value for the telecommunications services provided. The absence of transparency regarding the contractor's pricing structure further hinders a robust value assessment. Compared to similar, competitively awarded telecommunications contracts, this award is likely at a disadvantage in terms of cost-effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'NOT COMPETED' status, indicating a sole-source or limited competition scenario. Specifically, it was a purchase order issued under a basic agreement, which often allows for streamlined ordering but can bypass full and open competition. The lack of a competitive solicitation means there were likely no other bidders considered, preventing price discovery and potentially leading to a higher cost for the government.

Taxpayer Impact: Taxpayers may have paid more than necessary due to the absence of competitive pressure to drive down prices. The lack of transparency in the award process also makes it harder to ensure funds were used efficiently.

Public Impact

The Department of Defense, specifically the Defense Information Systems Agency, is the direct beneficiary of these telecommunications services. These services are crucial for maintaining secure and reliable communication networks essential for military operations. The geographic impact is likely global, supporting deployed forces and command centers. The contract supports the telecommunications infrastructure workforce, though specific job creation details are not provided.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about fair pricing and potential overspending.
Undisclosed foreign awardees create transparency and accountability challenges.
The long contract duration (over 5 years) locks the government into this arrangement without ongoing competitive review.
Limited information available on the specific services rendered and their performance metrics.
The award mechanism (purchase order under basic agreement) bypasses standard competitive procedures.

Positive Signals

The firm-fixed-price contract type provides cost certainty for the awarded amount.
The Defense Information Systems Agency is a key entity for critical communication infrastructure.
The contract falls under a basic ordering agreement, which can streamline procurement for established needs.

Sector Analysis

This contract falls within the Wired Telecommunications Carriers industry (NAICS code 517110), a sector vital for national security and government operations. The market is characterized by significant infrastructure investment and a mix of large established providers and specialized service companies. Government spending in this area is substantial, often involving complex, long-term service agreements. This specific award, valued at $44.7 million over approximately five years, represents a moderate-sized commitment within the broader federal telecommunications spending landscape, which can total billions annually across various agencies.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, there is no information provided regarding subcontracting plans or performance related to small businesses. The award to undisclosed foreign entities further suggests that small business participation was likely minimal or non-existent in this specific procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense and the Defense Information Systems Agency (DISA). As a purchase order under a basic agreement, oversight might be less rigorous than for a full and open competition contract. Transparency is limited due to the undisclosed nature of the awardees and the lack of competitive bidding. Inspector General jurisdiction would apply, but the effectiveness of oversight is hampered by the initial procurement method.

Related Government Programs

Defense Information Systems Agency (DISA) Telecommunications Contracts
Federal Wired Telecommunications Services
Basic Ordering Agreements (BOA) Usage
Sole-Source Procurements in Defense

Risk Flags

Lack of Competition
Undisclosed Awardee
Foreign Awardee Concerns
Potential Lack of Transparency
Questionable Value for Money

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.7 million to FOREIGN AWARDEES (UNDISCLOSED). AFGNW000155 (CSA) TELECOMMUNICATIONS SERVICE ORDERED UNDER BASIC AGREEMENT HC102112H2013

Who is the contractor on this award?

The obligated recipient is FOREIGN AWARDEES (UNDISCLOSED).

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $44.7 million.

What is the period of performance?

Start: 2010-03-07. End: 2015-06-05.

What is the track record of the undisclosed foreign awardees for similar telecommunications services?

Information regarding the track record of the undisclosed foreign awardees is unavailable due to the nature of the award. The data provided does not specify the contractor's identity, making it impossible to assess their past performance, experience, or reliability in delivering telecommunications services. This lack of transparency is a significant concern, as it prevents a thorough evaluation of the contractor's capabilities and potential risks associated with their performance. Without this information, it is difficult to ascertain if the government is engaging with a proven and capable provider.

How does the $44.7 million price compare to market rates for similar telecommunications services over a five-year period?

Direct price comparison is challenging because the awardee is undisclosed and the procurement was not competed. However, the average annual value of this contract is approximately $8.9 million ($44.7M / 5 years). In the federal telecommunications market, prices can vary widely based on service type, bandwidth, geographic coverage, and security requirements. Without knowing the specifics of the services rendered (e.g., dedicated fiber, satellite, managed network services), it's difficult to benchmark. Generally, non-competed contracts, especially with foreign entities, carry a higher risk of being priced above market rates. Industry benchmarks for comparable enterprise-level telecommunications solutions often suggest that competitive bidding can yield savings of 10-30% or more compared to sole-source awards.

What are the specific risks associated with awarding telecommunications services to undisclosed foreign entities?

Awarding telecommunications services to undisclosed foreign entities presents several significant risks. Firstly, there are potential national security risks related to data privacy, network integrity, and the possibility of foreign government influence or espionage. Secondly, accountability is diminished; enforcing contract terms, addressing performance issues, or seeking legal recourse against an undisclosed foreign entity can be extremely difficult and costly. Thirdly, transparency is compromised, making it harder for oversight bodies and the public to understand who is providing critical infrastructure and how taxpayer money is being spent. Finally, there's a risk of non-compliance with U.S. regulations, standards, or ethical business practices.

What is the effectiveness of the Defense Information Systems Agency (DISA) in managing telecommunications contracts awarded through basic agreements?

DISA is a primary agency responsible for providing IT and telecommunications services to the Department of Defense. They manage a vast portfolio of contracts, including those issued under basic agreements or other streamlined mechanisms. While basic agreements can facilitate rapid procurement, their effectiveness in ensuring optimal value and competition depends heavily on DISA's internal processes, oversight, and adherence to procurement regulations. When used appropriately for specific, pre-defined needs with clear task orders, they can be efficient. However, when they are used to bypass full and open competition for significant procurements like this $44.7 million order, their effectiveness in achieving best value for taxpayers is questionable, as evidenced by the lack of competition here.

How has federal spending on wired telecommunications carriers evolved, and does this contract align with historical patterns?

Federal spending on wired telecommunications carriers has historically been substantial, driven by the need for secure and reliable communication networks for defense, intelligence, and civilian agencies. Spending patterns have evolved with technological advancements, shifting towards more integrated network services, cloud solutions, and cybersecurity. This contract, awarded in 2010 and ending in 2015, falls within a period where agencies were increasingly reliant on robust telecommunications infrastructure. While the total dollar amount ($44.7M) is significant, the method of award (not competed) and the duration (over 5 years) are key characteristics. Historical patterns show a mix of competitive large-scale network contracts and smaller, more direct service orders. This specific award's non-competed nature and foreign awardee status are less typical for large-value, long-term commitments aiming for maximum taxpayer value.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1800 F ST NW, WASHINGTON, DC, 20405

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $44,668,880

Exercised Options: $44,668,880

Current Obligation: $44,668,880

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Timeline