DoD's $35M telecommunications contract with RETELIT S.P.A. awarded via full and open competition

Contract Overview

Contract Amount: $35,133,775 ($35.1M)

Contractor: Reti Telematiche Italiane S.P.A., in Forma Abbreviata Retelit S. P.A.

Awarding Agency: Department of Defense

Start Date: 2012-09-26

End Date: 2020-03-14

Contract Duration: 2,726 days

Daily Burn Rate: $12.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF TELECOMMUNICATIONS SERVICE ORDERED UNDER BASIC AGREEMENT HC102106H2000 (CSA) RETD W 662704

Plain-Language Summary

Department of Defense obligated $35.1 million to RETI TELEMATICHE ITALIANE S.P.A., IN FORMA ABBREVIATA RETELIT S. P.A. for work described as: IGF::OT::IGF TELECOMMUNICATIONS SERVICE ORDERED UNDER BASIC AGREEMENT HC102106H2000 (CSA) RETD W 662704 Key points: 1. Contract value represents a significant investment in wired telecommunications infrastructure. 2. Full and open competition suggests a robust bidding process, potentially leading to better pricing. 3. The contract duration of over 7 years indicates a long-term need for these services. 4. The firm fixed-price contract type shifts cost risk to the contractor. 5. This spending falls within the broader telecommunications services sector for the Defense Department. 6. The award to an Italian company highlights international sourcing for critical defense infrastructure.

Value Assessment

Rating: fair

Benchmarking the value of this specific telecommunications service order is challenging without detailed service descriptions and market rates for the specific period. However, the total award amount of over $35 million spread across nearly 7.5 years suggests an average annual expenditure of approximately $4.7 million. This figure needs to be compared against similar service orders placed by the Defense Information Systems Agency (DISA) for comparable telecommunications capabilities to assess value for money. The firm fixed-price nature of the contract provides cost certainty, but the overall value depends on the necessity and efficiency of the services procured.

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 a bid. The presence of 4 bids suggests a reasonable level of competition for this telecommunications service order. A competitive bidding process generally helps in achieving fair market prices and encourages contractors to offer their best value propositions. The specific details of the bidding process, such as the number of bidders and the spread of their proposals, would provide further insight into the effectiveness of the competition.

Taxpayer Impact: Taxpayers benefit from full and open competition as it typically drives down prices through market forces, ensuring that the government is not overpaying for necessary services. This process also promotes transparency and fairness in government contracting.

Public Impact

The primary beneficiaries are the Department of Defense and its various components, which receive essential wired telecommunications services. These services likely support critical communication networks, data transmission, and command and control systems for military operations. The geographic impact is likely global, given the nature of defense operations, though specific service locations are not detailed. The contract supports the telecommunications industry, potentially including jobs in Italy and any subcontracting entities involved.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to vendor lock-in or missed opportunities for more cost-effective solutions if technology evolves rapidly.
Reliance on a single foreign entity for critical telecommunications infrastructure may present geopolitical or supply chain risks.
Lack of detailed performance metrics makes it difficult to assess the ongoing quality and efficiency of the services provided.
The specific nature of 'telecommunications service ordered under basic agreement' requires further investigation to understand the exact services and their criticality.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
Firm fixed-price contract type provides budget certainty and transfers cost overrun risk to the contractor.
The contract was awarded to a specialized telecommunications provider, indicating access to relevant expertise.
The long duration suggests a stable, long-term requirement being met efficiently.

Sector Analysis

This contract falls within the Wired Telecommunications Carriers industry (NAICS 517110), a sector characterized by the provision of telecommunications services over wired networks. The U.S. telecommunications market is vast, with significant government spending on communication infrastructure. This specific contract represents a portion of the Defense Information Systems Agency's (DISA) broader efforts to procure and manage telecommunications services essential for national security. Comparable spending benchmarks would involve analyzing other DISA contracts for similar wired services, as well as overall federal spending on telecommunications, which often runs into billions of dollars annually.

Small Business Impact

This contract does not appear to have a small business set-aside (ss=false, sb=false). There is no explicit information provided regarding subcontracting plans or performance related to small businesses. Therefore, the direct impact on the small business ecosystem from this specific contract is likely minimal, unless the prime contractor, RETELIT S.P.A., voluntarily engages small businesses in its supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the purview of the Defense Information Systems Agency (DISA) contracting officers and program managers. As a purchase order under a basic agreement, it is subject to standard contract administration and oversight procedures. The Department of Defense's Inspector General would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract. Transparency is facilitated through contract databases like FPDS, which provide basic award information, but detailed performance and financial reporting may be less accessible to the public.

Related Government Programs

Defense Information Systems Agency Telecommunications Services
Wired Telecommunications Services
Federal Telecommunications Infrastructure
DoD IT Services
International Telecommunications Contracts

Risk Flags

Potential geopolitical risk due to foreign vendor
Lack of detailed service description
Limited public performance data for contractor
Long contract duration may not reflect current market conditions

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.1 million to RETI TELEMATICHE ITALIANE S.P.A., IN FORMA ABBREVIATA RETELIT S. P.A.. IGF::OT::IGF TELECOMMUNICATIONS SERVICE ORDERED UNDER BASIC AGREEMENT HC102106H2000 (CSA) RETD W 662704

Who is the contractor on this award?

The obligated recipient is RETI TELEMATICHE ITALIANE S.P.A., IN FORMA ABBREVIATA RETELIT S. P.A..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $35.1 million.

What is the period of performance?

Start: 2012-09-26. End: 2020-03-14.

What specific telecommunications services were provided under this contract, and how critical are they to DoD operations?

The provided data indicates the contract is for 'Wired Telecommunications Service Ordered Under Basic Agreement'. While the specific services are not detailed, this typically encompasses a range of offerings such as dedicated data lines, voice circuits, internet access, and other network connectivity solutions delivered over physical infrastructure. Given its award by the Defense Information Systems Agency (DISA) to support the Department of Defense (DoD), these services are likely critical for secure and reliable communication, data transfer, command and control, intelligence dissemination, and operational support for military personnel and systems globally. The long duration and substantial value suggest a foundational role in the DoD's communication architecture.

How does the pricing of this contract compare to similar telecommunications services procured by the DoD or other federal agencies?

Direct price comparison is difficult without knowing the exact service level agreements (SLAs), bandwidth, geographic coverage, and duration of the services provided under this specific order. However, the total award of $35.1 million over approximately 7.5 years (2726 days) averages to about $4.7 million annually, or roughly $12,888 per day. To benchmark this, one would need to analyze other DISA or DoD contracts for similar wired telecommunications services, looking at per-megabit pricing, circuit costs, or monthly service fees. Factors like international reach, security requirements, and the competitive landscape at the time of award significantly influence pricing. The firm fixed-price nature suggests the contractor assumed cost risks, which can sometimes lead to higher initial bids compared to cost-reimbursement contracts.

What is the track record of RETELIT S.P.A. in performing federal contracts, particularly with the Department of Defense?

RETELIT S.P.A. (RETI TELEMATICHE ITALIANE S.P.A.) is an Italian telecommunications company. Information on its specific track record with the U.S. federal government, particularly the DoD, is limited in the provided data. Federal procurement databases would typically show past performance ratings, contract history, and any disputes or terminations. Without access to these detailed records, it's challenging to assess their performance history comprehensively. However, being awarded a contract of this magnitude by DISA suggests they met the necessary qualifications and demonstrated capability to fulfill the government's requirements at the time of award. Further investigation into their contract performance history within federal systems would be necessary for a thorough assessment.

What are the potential risks associated with awarding a significant telecommunications contract to a foreign-based company?

Awarding significant telecommunications contracts to foreign-based companies can introduce several risks. These include geopolitical risks, where international relations could impact service continuity or access. Supply chain vulnerabilities are another concern, as disruptions in the foreign country or international shipping could affect equipment or service delivery. Security risks may arise concerning data privacy and protection, especially if data traverses networks controlled or influenced by foreign governments, potentially subject to different legal frameworks and oversight. Furthermore, reliance on foreign providers can complicate emergency response or technical support, potentially leading to longer resolution times. However, international competition can also drive innovation and cost savings.

How has federal spending on wired telecommunications carriers evolved over the years, and where does this contract fit in?

Federal spending on wired telecommunications carriers has historically been substantial, driven by the need for robust communication infrastructure across all government agencies, particularly defense and intelligence. Spending fluctuates based on technological advancements, modernization initiatives, and evolving security requirements. This contract, awarded in 2012 and ending in 2020, represents a specific instance of DISA procuring essential connectivity services. It fits within the broader trend of agencies relying on specialized providers for high-capacity, secure networks. Analyzing historical spending data for NAICS code 517110 by DISA and the DoD would reveal patterns, identify major vendors, and indicate whether this contract's value was typical, high, or low for its time and service type.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: VIALE FRANCESCO RESTELLI 3/7, MILANO

Business Categories: Category Business, Corporate Entity Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $35,133,775

Exercised Options: $35,133,775

Current Obligation: $35,133,775

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Timeline