DoD's $31M PGSS Operator Support contract awarded without competition, raising value-for-money questions

Contract Overview

Contract Amount: $31,088,428 ($31.1M)

Contractor: Domestic Awardees (undisclosed)

Awarding Agency: Department of Defense

Start Date: 2012-02-17

End Date: 2013-02-14

Contract Duration: 363 days

Daily Burn Rate: $85.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: PGSS OPERATOR SUPPORT

Plain-Language Summary

Department of Defense obligated $31.1 million to DOMESTIC AWARDEES (UNDISCLOSED) for work described as: PGSS OPERATOR SUPPORT Key points: 1. The contract's value-for-money is questionable due to the lack of competition and the cost-plus-fixed-fee structure. 2. Competition dynamics were absent, as the contract was awarded on a sole-source basis. 3. Risk indicators include the cost-plus-fixed-fee pricing, which can incentivize cost overruns. 4. Performance context is limited, with a short duration and no readily available performance metrics. 5. Sector positioning is within defense communications equipment repair and maintenance, a critical but often opaque area. 6. The contract's sole-source nature limits price discovery and potentially inflates costs for taxpayers.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bids and the undisclosed nature of the awardee. The cost-plus-fixed-fee (CPFF) structure, while offering flexibility, can lead to higher costs compared to fixed-price contracts if not managed rigorously. Without comparative data on similar services or market rates for 'PGSS Operator Support,' it's difficult to definitively assess if the $31 million spent represents a fair price. The absence of competition suggests potential inefficiencies and a missed opportunity for cost savings.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. The Department of the Navy did not solicit offers from multiple potential contractors. This approach is typically used when only one source is capable of meeting the requirement, or in specific emergency situations. The lack of competition means that the government did not benefit from the price discovery mechanisms that typically occur when multiple companies bid on a contract.

Taxpayer Impact: The absence of competition means taxpayers may have paid a higher price than if multiple vendors had competed. It also limits transparency into the pricing structure and potential for cost savings.

Public Impact

The primary beneficiaries are the undisclosed contractor(s) providing operator support services. Services delivered include operator support for PGSS (likely a specific program or system). The geographic impact is presumed to be domestic, given the awardee classification. Workforce implications are tied to the employment of personnel by the contractor to fulfill the support role.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced value for taxpayer funds.
The CPFF contract type can incentivize increased costs if not closely monitored.
Undisclosed awardee makes it difficult to assess past performance and track record.
Short contract duration (one year) may limit opportunities for long-term performance improvements or cost efficiencies.
Absence of specific details on 'PGSS Operator Support' hinders a full understanding of the service's criticality and scope.

Positive Signals

The contract addresses a specific operational support need within the Department of the Navy.
The existence of the contract indicates a recognized requirement for PGSS operator support.
The fixed fee component of the CPFF contract provides some level of cost certainty for the government.

Sector Analysis

The defense sector, particularly within the Department of the Navy, relies heavily on specialized support services for complex systems. Contracts for operator support, maintenance, and repair of communication equipment are common. The market for such services can be specialized, with a limited number of firms possessing the requisite technical expertise and security clearances. Benchmarking spending in this niche requires comparing against similar sole-source or limited-competition contracts for specialized defense systems support.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The awardee is also undisclosed, making it impossible to determine if small businesses were involved as subcontractors. Without specific subcontracting plans or reporting, the impact on the small business ecosystem remains unknown, but the lack of a set-aside suggests limited direct benefit to small businesses through this specific award.

Oversight & Accountability

Oversight for this contract would fall under the Department of the Navy's contracting and program management offices. Accountability measures would typically involve contract performance reviews, financial audits, and adherence to the terms of the Cost Plus Fixed Fee agreement. Transparency is limited due to the sole-source nature and undisclosed awardee. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Communications Equipment Maintenance
Naval Systems Support Contracts
Operator Training and Support Services
Cost-Plus-Fixed-Fee Contracts in Defense

Risk Flags

Sole-source award
Lack of competition
Cost-plus contract type
Undisclosed awardee
Limited performance data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.1 million to DOMESTIC AWARDEES (UNDISCLOSED). PGSS OPERATOR SUPPORT

Who is the contractor on this award?

The obligated recipient is DOMESTIC AWARDEES (UNDISCLOSED).

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $31.1 million.

What is the period of performance?

Start: 2012-02-17. End: 2013-02-14.

What is the specific nature of 'PGSS Operator Support' and why was it deemed a sole-source requirement?

The specific nature of 'PGSS Operator Support' refers to the services required to operate and maintain a particular system or program, likely within the Department of the Navy's communication or intelligence apparatus (PGSS could stand for various acronyms, such as 'Program Guidance and Support System' or a specific platform). The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or a lack of readily available alternatives that meet stringent security and operational requirements. Without further declassification or specific documentation, the precise reasons remain within the agency's purview. However, sole-source awards often raise concerns about whether a thorough market survey was conducted to confirm the absence of competition.

How does the Cost Plus Fixed Fee (CPFF) contract structure compare to other pricing arrangements for similar support services?

The Cost Plus Fixed Fee (CPFF) structure is characterized by the government reimbursing the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. This contrasts with fixed-price contracts, where the price is set upfront, offering greater cost certainty to the government but potentially shifting risk to the contractor. CPFF contracts are often used when the scope of work is not well-defined or involves significant uncertainty, allowing for flexibility. However, they can incentivize contractors to incur higher costs, as the fee remains constant regardless of the total cost. For similar support services, if the scope were well-defined, a fixed-price contract might yield better value. Without competitive bidding, it's difficult to ascertain if CPFF was the most cost-effective choice here.

What are the potential risks associated with awarding a $31 million contract without competition?

Awarding a $31 million contract without competition presents several risks. Primarily, it eliminates the potential for cost savings that arise from a competitive bidding process, where multiple vendors vie for the contract, often leading to lower prices. This lack of competition can result in the government paying a premium. Furthermore, without competing offers, there's less incentive for the sole-source provider to innovate or optimize costs. It also raises concerns about whether the government received the best possible value and whether the chosen contractor was truly the only viable option. Transparency is reduced, making it harder to scrutinize the pricing and performance.

Can the performance of the undisclosed contractor be assessed, and what are the implications of this lack of transparency?

Assessing the performance of an undisclosed contractor is inherently difficult, if not impossible, for external analysts. Publicly available data does not identify the awardee, preventing a review of their past performance records, contract history, or any reported issues. This lack of transparency is a significant drawback, as contractor performance is a key indicator of reliability and capability. It hinders the government's ability to make informed decisions about future awards and limits public and congressional oversight. Without knowing who the contractor is, it's impossible to determine if they have a history of successful contract completion or if they have faced penalties or disputes on previous government contracts.

What does the contract duration of 363 days suggest about the nature of the PGSS Operator Support requirement?

A contract duration of 363 days, just shy of a full year, suggests that the PGSS Operator Support requirement might be short-term, transitional, or intended for a specific project phase. It could indicate that the support is needed until a new system is implemented, a different contract vehicle is established, or the immediate operational need is fulfilled. Alternatively, it might be a deliberate strategy to allow for closer monitoring and re-evaluation of the requirement before committing to a longer-term, potentially multi-year contract. Short durations can sometimes be associated with less complex requirements or a desire for flexibility, but they can also lead to recurring administrative costs for contract renewals or re-competitions.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Communication Equipment Repair and Maintenance

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6833512R0103

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

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

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $31,088,428

Exercised Options: $31,088,428

Current Obligation: $31,088,428

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline