DoD's $237M Communication Equipment Repair Contract Awarded Sole-Source to Undisclosed Domestic Firm

Contract Overview

Contract Amount: $23,723,907 ($23.7M)

Contractor: Domestic Awardees (undisclosed)

Awarding Agency: Department of Defense

Start Date: 2014-04-30

End Date: 2015-03-31

Contract Duration: 335 days

Daily Burn Rate: $70.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: OPERATIONS AND SUSTAINMENT

Plain-Language Summary

Department of Defense obligated $23.7 million to DOMESTIC AWARDEES (UNDISCLOSED) for work described as: OPERATIONS AND SUSTAINMENT Key points: 1. Contract awarded on a sole-source basis, limiting price competition and potentially increasing costs. 2. The contract type (Cost Plus Fixed Fee) can incentivize cost overruns. 3. Lack of disclosed awardee raises transparency concerns. 4. The duration of 335 days is relatively short for a major sustainment contract. 5. The North American Industry Classification System (NAICS) code 811213 suggests a focus on communication equipment repair. 6. The contract value of $237.2 million represents a significant investment in maintaining critical infrastructure.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the undisclosed awardee and the sole-source nature of the award. Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value. The Cost Plus Fixed Fee (CPFF) contract type, while useful for uncertain scopes, can lead to higher overall costs compared to fixed-price contracts if not managed rigorously. The provided data does not include specific cost breakdowns or performance metrics to allow for a detailed value-for-money assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This significantly limits the opportunity for price discovery and potentially leads to higher costs for the government. The absence of a competitive bidding process means that the government did not benefit from the innovation and cost-saving proposals that typically arise from a robust competition.

Taxpayer Impact: Taxpayers may have paid a premium for this service due to the lack of competition. Without a competitive process, there is less assurance that the government secured the best possible price for the required communication equipment repair and maintenance.

Public Impact

The primary beneficiaries are the Department of Defense (specifically the Department of the Navy) through the continued operational readiness of communication equipment. The services delivered include repair and maintenance of communication equipment, crucial for military operations. The geographic impact is likely domestic, given the 'DOMESTIC AWARDEES (UNDISCLOSED)' designation. Workforce implications would involve skilled technicians and support staff required for equipment repair and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost Plus Fixed Fee contract type can lead to cost escalations if not tightly managed.
Lack of transparency regarding the awardee hinders public and potentially internal oversight.
The specific nature of 'Communication Equipment Repair and Maintenance' could be subject to rapid technological obsolescence, impacting long-term value.

Positive Signals

Contract addresses a critical operational need for the Department of Defense.
Focus on domestic awardees may support domestic industrial base.
The contract is for essential sustainment services, ensuring readiness.

Sector Analysis

The contract falls within the broader Information Technology and Defense sectors, specifically focusing on the maintenance and repair of communication equipment. This is a critical component of defense readiness, ensuring that communication systems function reliably. The market for such services is specialized, often involving contractors with specific technical expertise and security clearances. Comparable spending benchmarks would typically be found within other sustainment contracts for similar defense-related communication hardware.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Given the sole-source nature and the substantial value, it is unlikely that significant subcontracting opportunities for small businesses were mandated or actively pursued through a competitive process. The impact on the small business ecosystem is likely minimal unless the undisclosed prime contractor has its own robust small business subcontracting program.

Oversight & Accountability

Oversight mechanisms for this contract would primarily reside within the Department of the Navy's contracting and program management offices. Accountability measures would be tied to the terms of the Cost Plus Fixed Fee contract, requiring detailed reporting on costs and performance. Transparency is limited due to the sole-source award and undisclosed contractor. Inspector General jurisdiction would apply if fraud, waste, or abuse were suspected.

Related Government Programs

Defense Communications Systems Sustainment
Military Communication Equipment Maintenance
Department of Defense IT Services
Naval Communication Infrastructure Support

Risk Flags

Sole-source award
Lack of disclosed awardee
Cost Plus Fixed Fee contract type
Potential for price inflation due to lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.7 million to DOMESTIC AWARDEES (UNDISCLOSED). OPERATIONS AND SUSTAINMENT

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 $23.7 million.

What is the period of performance?

Start: 2014-04-30. End: 2015-03-31.

What is the track record of the undisclosed contractor in performing similar communication equipment repair and maintenance services for the DoD or other government agencies?

The provided data does not identify the contractor, making it impossible to assess their track record. A sole-source award, especially without a justification document readily available, raises questions about why a competitive process was bypassed. Typically, for sole-source contracts, the government must justify that only one responsible source can provide the required services. Without knowing the awardee, we cannot research their past performance, past performance evaluations (like Past Performance Information Retrieval System - PPIRS), or any history of successful or problematic contract execution in similar domains. This lack of transparency is a significant gap in evaluating the contractor's reliability and capability.

How does the estimated cost per day or per month for this contract compare to industry benchmarks for similar communication equipment repair and maintenance services?

The total contract value is $237,239,070 over a period of 335 days. This equates to an average daily cost of approximately $708,176. Benchmarking this figure against industry standards for specialized communication equipment repair and maintenance is difficult without knowing the specific types of equipment, the complexity of the repairs, and the required service levels. Furthermore, the Cost Plus Fixed Fee (CPFF) structure means the final cost could deviate from this average. Generally, CPFF contracts can be more expensive than fixed-price contracts if costs are not meticulously controlled. Without more granular data on the scope of work and specific cost drivers, a precise comparison to market rates is not feasible.

What are the specific risks associated with awarding a sole-source contract for critical communication equipment maintenance?

The primary risk of a sole-source award is the lack of competitive pressure, which can lead to inflated prices and reduced incentive for the contractor to innovate or improve efficiency. Taxpayers may end up paying more than necessary. Another risk is vendor lock-in, where the government becomes dependent on a single provider, potentially limiting future flexibility and options. If the sole-source provider experiences financial difficulties, operational issues, or decides to exit the market, the government could face significant disruption in maintaining critical communication systems. The lack of transparency regarding the awardee further compounds these risks, making it harder to assess the contractor's stability and commitment.

What is the historical spending pattern for communication equipment repair and maintenance by the Department of the Navy or the Department of Defense?

The provided data only includes details for this specific contract. To understand historical spending patterns, one would need to analyze procurement data over several fiscal years for the Department of the Navy and the broader Department of Defense related to NAICS code 811213 (Communication Equipment Repair and Maintenance) and similar service categories. This would involve querying federal procurement databases (like FPDS-NG or USASpending.gov) to identify trends in contract values, award types (competed vs. sole-source), and the number of contractors involved in providing these services. Such an analysis could reveal if this $237 million contract represents an increase or decrease in spending, or if sole-source awards are a common practice for this type of service within the Navy.

What specific types of communication equipment are covered under this contract, and what is their criticality to DoD operations?

The provided data specifies the NAICS code 811213, which broadly covers 'Communication Equipment Repair and Maintenance.' However, it does not detail the specific types of equipment. This could range from tactical radios, satellite communication systems, network infrastructure components, encryption devices, to command and control systems. The criticality of this equipment to DoD operations is inherently high, as reliable communication is fundamental to mission success, situational awareness, and coordination across all branches of the military, both domestically and in deployed environments. Without specific equipment details, the exact operational impact and the justification for a sole-source award remain unclear.

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

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: $39,479,521

Exercised Options: $25,148,387

Current Obligation: $23,723,907

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline