DHS awarded $158M for wired telecommunications, with contract modifications impacting its number

Contract Overview

Contract Amount: $158,237,312 ($158.2M)

Contractor: Ctsc, LLC

Awarding Agency: Department of Homeland Security

Start Date: 2010-02-01

End Date: 2011-12-31

Contract Duration: 698 days

Daily Burn Rate: $226.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: ADMINISTRATIVE ACTION CHANGING CONTRACT NUMBER ONLY FOR CONTRACT HSBP1004C00193 PRIME INTEGRATION CONTRACT. CONGRESSIONAL NOTIFICATION OF AWARD MADE SEPTEMBER 2003

Place of Performance

Location: LORTON, FAIRFAX County, VIRGINIA, 22079

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $158.2 million to CTSC, LLC for work described as: ADMINISTRATIVE ACTION CHANGING CONTRACT NUMBER ONLY FOR CONTRACT HSBP1004C00193 PRIME INTEGRATION CONTRACT. CONGRESSIONAL NOTIFICATION OF AWARD MADE SEPTEMBER 2003 Key points: 1. Contract value appears substantial, requiring careful review of services rendered against costs. 2. The contract was not competed, raising questions about potential price efficiencies. 3. Performance period spans over a year, indicating a need for ongoing monitoring. 4. The contract type (Cost Plus Award Fee) can incentivize performance but may also lead to cost overruns if not managed tightly. 5. The prime contractor, CTSC, LLC, has a significant contract with DHS. 6. The NAICS code 517110 suggests services related to telecommunications infrastructure.

Value Assessment

Rating: questionable

The total award amount of $158.2 million for wired telecommunications services over its duration is significant. Without specific details on the services provided and performance metrics, it is difficult to benchmark the value for money. The 'Cost Plus Award Fee' contract type suggests that costs are reimbursed, with an additional fee awarded based on performance. This structure can be effective but requires robust oversight to prevent cost escalation and ensure fair pricing. Comparing this to similar contracts for telecommunications infrastructure and services would be necessary for a definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not available for competition, indicating a sole-source award. Sole-source procurements can be justified when only one responsible source can provide the required supplies or services. However, the lack of competition typically limits price discovery and can lead to higher costs for the government compared to a fully competed contract. The rationale for this sole-source determination would need to be thoroughly documented and justified to ensure it served the government's best interest.

Taxpayer Impact: The absence of competition means taxpayers may not have benefited from the cost savings that could arise from a competitive bidding process. This could result in a higher overall expenditure for the services rendered.

Public Impact

The primary beneficiaries are likely U.S. Customs and Border Protection (CBP) within the Department of Homeland Security, receiving essential wired telecommunications services. The services delivered are crucial for the operational communication needs of CBP, supporting border security and law enforcement activities. The geographic impact is likely concentrated where CBP operates, potentially across various ports of entry and facilities nationwide. The contract supports the technology infrastructure necessary for federal law enforcement and national security operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced value for taxpayer dollars.
The Cost Plus Award Fee structure requires diligent oversight to manage costs effectively and prevent unnecessary expenditures.
The contract's administrative modification for number change suggests potential complexities in contract management or historical record-keeping.

Positive Signals

The contract supports critical national security functions for U.S. Customs and Border Protection.
The prime contractor, CTSC, LLC, is established and holds a significant contract with a major federal agency.
The contract duration implies a sustained need for these telecommunications services.

Sector Analysis

The wired telecommunications carriers industry (NAICS 517110) encompasses establishments primarily engaged in operating and maintaining switching and transmission equipment to provide voice, data, and video services over wired networks. This includes services like broadband internet, traditional phone lines, and private network connectivity. The federal government is a significant consumer of these services, relying on them for secure and reliable communication across its vast network of agencies and facilities. This contract represents a portion of the government's substantial spending on telecommunications infrastructure, which is essential for national security and operational efficiency.

Small Business Impact

Information regarding small business set-asides or subcontracting plans is not explicitly provided in the data. As this appears to be a sole-source award, the opportunities for small business participation through set-asides would be limited unless specifically incorporated into the contract terms. Further investigation into subcontracting requirements would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the contracting officer, contract specialists, and potentially program managers within U.S. Customs and Border Protection. The 'Cost Plus Award Fee' structure necessitates rigorous monitoring of costs incurred and performance achieved to ensure accountability. Transparency would depend on the agency's policies regarding the release of contract details and performance reports. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Homeland Security IT Services
Federal Telecommunications Infrastructure
Customs and Border Protection Communications Contracts
Cost Plus Award Fee Contracts
Sole Source IT Procurements

Risk Flags

Sole-source award may limit price competition.
Cost Plus Award Fee requires diligent oversight to manage costs.
Contract modifications suggest potential changes in scope or requirements.
Lack of detailed service description hinders value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $158.2 million to CTSC, LLC. ADMINISTRATIVE ACTION CHANGING CONTRACT NUMBER ONLY FOR CONTRACT HSBP1004C00193 PRIME INTEGRATION CONTRACT. CONGRESSIONAL NOTIFICATION OF AWARD MADE SEPTEMBER 2003

Who is the contractor on this award?

The obligated recipient is CTSC, LLC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Customs and Border Protection).

What is the total obligated amount?

The obligated amount is $158.2 million.

What is the period of performance?

Start: 2010-02-01. End: 2011-12-31.

What specific wired telecommunications services were provided under this contract, and how did they support CBP's mission?

The provided data indicates the contract is for 'Wired Telecommunications Carriers' (NAICS 517110) and was awarded to CTSC, LLC by the Department of Homeland Security (DHS) for U.S. Customs and Border Protection (CBP). While the exact services are not detailed, this NAICS code typically covers the provision and maintenance of telecommunications infrastructure such as broadband internet, dedicated data lines, voice services, and potentially private network connectivity. These services are critical for CBP's operations, which include managing border security, facilitating lawful trade and travel, and responding to threats. Reliable and high-capacity wired telecommunications are essential for data transmission, communication between agents and facilities, surveillance systems, and command and control operations. The $158.2 million award suggests a comprehensive suite of services supporting a significant portion of CBP's communication needs across its operational areas.

What is the justification for this contract being awarded on a sole-source basis?

The data explicitly states the contract was 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source award. The specific justification for this sole-source determination is not provided in the abbreviated data. Generally, sole-source awards are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required services, there is a compelling urgency, or the services are unique and specialized. For a contract of this magnitude ($158.2 million) supporting a critical agency like CBP, the justification would likely need to demonstrate a unique capability, a critical need that cannot be met by other vendors, or potentially a follow-on to a previous sole-source award where transitioning to a new vendor would be impractical or detrimental to mission accomplishment. Without the official justification documentation, it's impossible to definitively assess its validity.

How does the 'Cost Plus Award Fee' (CPAF) contract type influence cost control and value for money in this instance?

The Cost Plus Award Fee (CPAF) contract type involves reimbursing the contractor for allowable costs plus a fee that is composed of a fixed base amount and an award amount. The award amount is determined by the government based on the contractor's performance against pre-defined criteria. This structure is intended to incentivize high performance by offering a potential for increased profit (the award fee) if the contractor exceeds expectations. However, CPAF contracts require robust government oversight to ensure that costs are reasonable and allocable, and that the performance metrics are clearly defined, measurable, and aligned with mission objectives. If not managed diligently, the 'cost plus' aspect can lead to cost growth, and the 'award fee' can become a de facto entitlement if performance standards are not rigorously applied. For this $158.2 million contract, effective management of the CPAF structure is crucial for achieving value for money and controlling expenditures.

What is the historical spending pattern for wired telecommunications services by DHS or CBP, and how does this contract compare?

The provided data only includes details for this specific contract (HSBP1004C00193) awarded in September 2003 with modifications and an end date of December 2011, totaling approximately $158.2 million. It does not offer historical spending data for DHS or CBP on similar wired telecommunications services. To understand the historical spending pattern, one would need to analyze contract databases for previous awards to CTSC, LLC, or other telecommunications providers serving DHS and CBP. Comparing this contract's value and duration to previous procurements would reveal trends in spending, potential increases or decreases in contract values, and shifts in the types of telecommunications services procured. Without this broader context, it is difficult to determine if this $158.2 million award represents a typical, increased, or decreased level of investment for these services.

What are the potential risks associated with a sole-source contract of this size and duration for critical infrastructure services?

A sole-source contract of this size ($158.2 million) and duration (spanning from 2003 with modifications, ending in 2011) for critical infrastructure services like wired telecommunications presents several risks. Firstly, the lack of competition can lead to inflated prices, as the contractor faces no direct market pressure to offer the most cost-effective solution. Secondly, it can foster complacency in the contractor, potentially leading to reduced innovation or a decline in service quality over time, as there is no immediate threat of losing the contract to a competitor. Thirdly, there's a risk of vendor lock-in, making it difficult and costly to transition to a different provider in the future, even if better options become available. Finally, sole-source awards can raise concerns about fairness and transparency in the procurement process, potentially leading to perceptions of favoritism or inefficiency if not properly justified and managed.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Chenega Corporation (UEI: 622692994)

Address: 5911 KINGSTOWNE VILLAGE PKWY STE 300, ALEXANDRIA, VA, 22315

Business Categories: Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Native American Owned Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $570,506,070

Exercised Options: $550,796,675

Current Obligation: $158,237,312

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline