State Department's $15.7M ATS/STARS O&M contract awarded to Exelis Systems Corporation without competition

Contract Overview

Contract Amount: $15,755,254 ($15.8M)

Contractor: Exelis Systems Corporation

Awarding Agency: Department of State

Start Date: 2005-12-13

End Date: 2010-02-10

Contract Duration: 1,520 days

Daily Burn Rate: $10.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: IT

Official Description: OPERATION AND MAINTENANCE OF ATS/STARS

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20522

State: District of Columbia Government Spending

Plain-Language Summary

Department of State obligated $15.8 million to EXELIS SYSTEMS CORPORATION for work described as: OPERATION AND MAINTENANCE OF ATS/STARS Key points: 1. The contract's value of over $15 million for operations and maintenance of ATS/STARS systems indicates a significant investment in critical infrastructure. 2. The sole-source award raises questions about potential overpricing and lack of market-driven cost efficiencies. 3. A 5-year duration suggests a long-term reliance on the contractor, potentially limiting opportunities for competitive re-evaluation. 4. The absence of competition may indicate a lack of market availability for specialized services or a strategic decision by the agency. 5. Performance context is limited without specific metrics on system uptime, maintenance response times, or user satisfaction. 6. The contract falls within the IT services sector, specifically focusing on repair and maintenance of specialized equipment.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive data. The $15.7 million price tag over five years for operations and maintenance of ATS/STARS systems appears substantial. Without comparable contracts or detailed cost breakdowns, it's difficult to definitively assess if this represents a fair market price. The absence of competition suggests that the government may not have achieved the best possible value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning Exelis Systems Corporation was the only bidder considered. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors vying for the contract. The lack of competition limits price discovery and may prevent the government from obtaining the most cost-effective solution.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings that typically arise from a competitive bidding environment. This can lead to higher overall spending for the government.

Public Impact

The primary beneficiaries are the Department of State personnel who rely on the operational integrity of the ATS/STARS systems. The services delivered include the ongoing maintenance and operational support necessary to keep these critical systems functioning. The geographic impact is primarily within the District of Columbia, where the contract is managed and likely where the systems are located. Workforce implications include the potential employment of specialized technicians and support staff by Exelis Systems Corporation to fulfill the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source award limits transparency and potential for cost savings.
Long contract duration without re-competition could entrench the incumbent.
Absence of performance metrics makes value assessment difficult.

Positive Signals

Contract ensures continued operation of critical ATS/STARS systems.
Exelis Systems Corporation likely possesses specialized knowledge for these systems.
Award provides stability for essential government functions.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on the maintenance and repair of specialized computer and office machines (NAICS 811212). The market for such services can be niche, especially for proprietary or legacy systems like ATS/STARS. Without competitive bidding, it's harder to gauge the broader market landscape and typical pricing structures for similar maintenance contracts.

Small Business Impact

The data indicates this contract was not competed and there is no indication of small business set-asides or subcontracting plans. Therefore, the direct impact on the small business ecosystem is likely minimal, and there are no explicit mechanisms in place to ensure small business participation through this specific award.

Oversight & Accountability

Oversight mechanisms for this contract would typically be managed by the Department of State's contracting officers and program managers. Accountability measures would be defined in the contract's terms and conditions, including service level agreements. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of State IT Maintenance Contracts
Federal IT Operations and Maintenance
Specialized Equipment Support Services
ATS/STARS System Support

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $15.8 million to EXELIS SYSTEMS CORPORATION. OPERATION AND MAINTENANCE OF ATS/STARS

Who is the contractor on this award?

The obligated recipient is EXELIS SYSTEMS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $15.8 million.

What is the period of performance?

Start: 2005-12-13. End: 2010-02-10.

What is the specific nature and criticality of the ATS/STARS systems being maintained under this contract?

The ATS/STARS systems likely refer to Automated Target Recognition (ATR) or similar surveillance and targeting systems, and potentially Satellite Acquisition and Tracking Systems (SATS). These systems are critical for intelligence gathering, situational awareness, and potentially operational command and control within the Department of State. Their reliable functioning is paramount for national security and diplomatic operations. The maintenance and operation (O&M) contract ensures the continuous availability and performance of these vital technological assets, preventing downtime that could have significant operational or security consequences.

Why was this contract awarded on a sole-source basis instead of through full and open competition?

Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For this contract, potential justifications could include the highly specialized nature of the ATS/STARS systems, requiring unique technical expertise or proprietary knowledge held exclusively by Exelis Systems Corporation. Alternatively, there might have been an urgent need where initiating a full competition was not feasible, or the cost of competition was deemed prohibitive relative to the contract value. The Department of State would have had to document these justifications to award the contract without competition.

What are the potential risks associated with a sole-source contract of this duration and value?

The primary risks associated with a sole-source contract of this magnitude ($15.7 million over 5 years) include inflated pricing due to the lack of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and potential vendor lock-in. Taxpayers may bear a higher cost than necessary. Furthermore, the extended duration without re-competition can lead to complacency and a lack of agility if the agency's needs evolve. There's also a risk that the contractor's capabilities might degrade over time without the spur of competition.

How does the $15.7 million contract value compare to similar IT maintenance contracts within the federal government?

Direct comparison is difficult without knowing the exact scope and complexity of the ATS/STARS systems. However, $15.7 million over five years, averaging over $3 million annually, is a substantial amount for IT maintenance. For context, many large federal agencies spend tens or hundreds of millions annually on IT O&M. The key differentiator here is the likely specialized nature of ATS/STARS, which could command higher per-unit maintenance costs than standard IT equipment. Without competitive benchmarks for similar specialized systems, assessing value-for-money remains challenging.

What performance metrics or service level agreements (SLAs) were likely included in this contract to ensure contractor performance?

While specific SLAs are not provided, typical performance metrics for such an O&M contract would likely include system uptime percentages (e.g., 99.9%), response times for maintenance requests (categorized by severity), resolution times for reported issues, and potentially adherence to security protocols. The contract would also likely specify reporting requirements, such as monthly status reports detailing maintenance activities performed, issues encountered, and system performance data. Failure to meet these SLAs could result in penalties or contract termination clauses.

What is Exelis Systems Corporation's track record with the Department of State or similar federal agencies for IT maintenance?

Exelis Systems Corporation (now part of L3Harris Technologies) has a history of performing various IT and defense-related services for the U.S. government. While specific details on their performance for the Department of State's ATS/STARS systems under this particular sole-source contract require deeper investigation into contract performance reports and agency records, the company generally has experience in complex system integration, maintenance, and support. Their broader federal contracting history would provide context, but performance on this specific, non-competed contract is key.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: LABOR HOURS (Z)

Contractor Details

Parent Company: Vectrus, Inc. (UEI: 079387563)

Address: 655 SPACE CENTER DR, COLORADO SPRINGS, CO, 80915

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $25,094,335

Exercised Options: $22,533,986

Current Obligation: $15,755,254

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline