DoD's $27.2M submarine communication systems contract awarded to TELE-CONSULTANTS, INC. shows fair value with 3 bidders

Contract Overview

Contract Amount: $27,172,783 ($27.2M)

Contractor: Tele-Consultants, Inc.

Awarding Agency: Department of Defense

Start Date: 2017-05-15

End Date: 2022-10-15

Contract Duration: 1,979 days

Daily Burn Rate: $13.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::CT::IGF CODE 34 SUBMARINE COMMUNICATION SYSTEMS ENGINEERING AND TECHNICAL SERVICES

Place of Performance

Location: NEWPORT, NEWPORT County, RHODE ISLAND, 02841

State: Rhode Island Government Spending

Plain-Language Summary

Department of Defense obligated $27.2 million to TELE-CONSULTANTS, INC. for work described as: IGF::CT::IGF CODE 34 SUBMARINE COMMUNICATION SYSTEMS ENGINEERING AND TECHNICAL SERVICES Key points: 1. The contract demonstrates a reasonable value proposition, with the final award price appearing competitive given the specialized nature of the services. 2. Full and open competition was utilized, indicating a healthy market for these engineering services and potentially driving better pricing. 3. The duration of the contract (5 years) suggests a long-term need for these critical submarine communication systems. 4. Performance context is key; the success of these services directly impacts naval operational readiness. 5. This contract falls within the broader Defense sector, specifically supporting naval engineering and technical services. 6. The award was a delivery order under a larger contract, suggesting a phased approach to fulfilling requirements.

Value Assessment

Rating: good

The contract's total value of $27.2 million over five years suggests a moderate annual spend. Benchmarking against similar engineering services contracts for naval systems indicates that the pricing is within a reasonable range, especially considering the specialized expertise required for submarine communication systems. The cost-plus-fixed-fee (CPFF) structure allows for flexibility while providing the contractor with a defined profit margin, which is typical for complex R&D and engineering efforts. Without specific per-unit cost data, a direct comparison is challenging, but the overall award value appears to reflect the complexity and criticality of the services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with three bidders vying for the work. This level of competition is generally positive, suggesting that multiple capable firms were aware of and interested in the opportunity. The presence of three bidders indicates a reasonably competitive market for submarine communication systems engineering and technical services, which should have contributed to price discovery and a more favorable outcome for the government.

Taxpayer Impact: The use of full and open competition with multiple bidders is beneficial for taxpayers as it fosters a competitive environment, potentially leading to lower prices and higher quality services than a sole-source or limited competition award.

Public Impact

The primary beneficiaries are the Department of the Navy and its submarine fleet, ensuring the operational effectiveness of critical communication systems. Services delivered include engineering and technical support essential for the design, development, and maintenance of submarine communication infrastructure. The geographic impact is primarily within the United States, supporting naval bases and operations, though the systems themselves have global implications. Workforce implications include the employment of specialized engineers and technical personnel within the defense contracting sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The cost-plus-fixed-fee contract type can sometimes lead to cost overruns if not managed diligently, although the fixed fee component provides some control.
The long duration of the contract (5 years) necessitates ongoing monitoring to ensure continued value and performance.
Reliance on a single contractor for such critical systems could pose a risk if performance degrades or if the contractor faces financial instability.

Positive Signals

Awarding under full and open competition suggests a robust selection process and potentially competitive pricing.
The contract's focus on engineering and technical services for submarine communications addresses a vital national security need.
The existence of multiple bidders indicates a healthy market and availability of qualified contractors for this specialized field.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting the defense industry's need for specialized technical expertise in naval systems. The market for defense engineering services is substantial, driven by continuous modernization and maintenance requirements for military assets. Comparable spending benchmarks in this niche often involve high dollar values due to the complexity, security requirements, and limited number of qualified providers. This contract represents a portion of the broader DoD spending on C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) systems.

Small Business Impact

The data indicates that small business participation was not a primary focus for this specific contract, as the 'ss' (small business set-aside) and 'sb' (small business) flags are false. This suggests the contract was not specifically set aside for small businesses, and the prime contractor, TELE-CONSULTANTS, INC., is likely a larger entity. Subcontracting opportunities for small businesses may exist, but they are not explicitly detailed in the provided data. The impact on the small business ecosystem would depend on the extent of any subcontracting, but the prime award itself does not directly benefit small businesses through a set-aside.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. Accountability measures are embedded within the contract's terms and conditions, including performance standards and reporting requirements. Transparency is facilitated through contract databases like FPDS-NG, where award details are publicly available. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Submarine Force Support Contracts
Defense Communications Systems
Engineering and Technical Services Contracts
Department of Defense C4ISR Spending

Risk Flags

Potential for cost overruns inherent in CPFF contracts.
Need for sustained oversight due to long contract duration.
Reliance on a single contractor for critical systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.2 million to TELE-CONSULTANTS, INC.. IGF::CT::IGF CODE 34 SUBMARINE COMMUNICATION SYSTEMS ENGINEERING AND TECHNICAL SERVICES

Who is the contractor on this award?

The obligated recipient is TELE-CONSULTANTS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $27.2 million.

What is the period of performance?

Start: 2017-05-15. End: 2022-10-15.

What is the track record of TELE-CONSULTANTS, INC. in performing similar defense engineering contracts?

Assessing the track record of TELE-CONSULTANTS, INC. requires a deeper dive into their contract history beyond this single award. While this $27.2 million contract for submarine communication systems engineering is significant, understanding their past performance on similar projects is crucial. This would involve reviewing their history with the Department of Defense and other federal agencies, looking for awards related to naval systems, communications engineering, or complex technical services. Key indicators would include past performance ratings, any documented instances of contract disputes or terminations, and the successful completion of projects of comparable scope and complexity. A review of their financial stability and capacity to handle large, long-term contracts would also be pertinent. Without this broader context, it's difficult to definitively assess their reliability and expertise solely based on this one contract.

How does the awarded price compare to the initial estimated cost or ceiling for this contract?

The provided data shows the total award amount ($27,172,783.08) but does not include the contract's initial estimated cost or ceiling. For a Cost Plus Fixed Fee (CPFF) contract, the government typically establishes an estimate for the cost and a fixed fee. The final award amount represents the actual costs incurred plus the negotiated fixed fee. To assess value, one would need to compare the final award to the government's initial estimate. If the final award is significantly lower than the ceiling or estimate, it could indicate efficient performance and cost control by the contractor. Conversely, if it approaches or exceeds the estimate, further scrutiny might be warranted to understand the reasons for the cost variance. This comparison is essential for a comprehensive value-for-money assessment.

What are the specific risks associated with the 'COST PLUS FIXED FEE' contract type for this project?

The Cost Plus Fixed Fee (CPFF) contract type, while offering flexibility for complex projects where costs are difficult to estimate precisely, carries inherent risks. For the government, the primary risk is that the contractor may have less incentive to control costs rigorously, as the fee is fixed regardless of the final cost incurred. This could potentially lead to higher overall project expenses if the contractor is not diligent in managing resources or if unforeseen issues drive up costs significantly. Another risk is the potential for scope creep, where the project's requirements expand beyond the initial agreement, leading to increased costs and potentially impacting the fixed fee negotiation for future modifications. Effective oversight, detailed cost tracking, and clear performance metrics are crucial to mitigate these risks and ensure the government receives good value.

What is the historical spending trend for submarine communication systems engineering and technical services within the Department of the Navy?

Analyzing the historical spending trend for submarine communication systems engineering and technical services within the Department of the Navy is vital for contextualizing the current $27.2 million award. This would involve examining spending data over the past 5-10 years to identify patterns, fluctuations, and the average annual investment in this specific area. Key questions would include whether spending has been increasing, decreasing, or remaining relatively stable. Understanding these trends helps determine if the current award is an anomaly or part of a consistent investment strategy. It also aids in identifying potential budget cycles, major program milestones (like new submarine classes or upgrades), or shifts in technological priorities that might influence spending levels. Without this historical data, it's challenging to assess if the current contract represents a prudent allocation of resources or a deviation from established patterns.

How does the number of bidders (3) compare to typical competition levels for similar engineering services contracts in the defense sector?

The fact that this contract received three bids under full and open competition provides a moderate level of market engagement. For highly specialized engineering services within the defense sector, particularly those related to sensitive platforms like submarines, three bidders can be considered a reasonable, though not exceptionally high, number. In some niche areas, competition might be limited to only one or two qualified firms due to stringent security clearances, unique technical expertise, or proprietary technology. Conversely, for broader engineering services, one might expect a larger pool of bidders. Therefore, three bidders suggest a moderately competitive market, indicating that while there are capable firms, the pool of specialized expertise might be somewhat constrained. This level of competition is generally sufficient to ensure some price discovery and vendor selection, but it doesn't necessarily represent the most robust market scenario.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002416R3297

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Tele Consultants Inc

Address: 860 GREENBRIER CIR STE 404, CHESAPEAKE, VA, 23320

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $29,352,318

Exercised Options: $29,352,318

Current Obligation: $27,172,783

Actual Outlays: $1,759,622

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $733,882

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017814D7966

IDV Type: IDC

Timeline