DoD's $12.5M Engineering Services Contract for Wiring and Cable Plant Tech Awarded to GSTEK, Inc

Contract Overview

Contract Amount: $12,469,617 ($12.5M)

Contractor: Gstek, Inc.

Awarding Agency: Department of Defense

Start Date: 2008-03-17

End Date: 2011-09-16

Contract Duration: 1,278 days

Daily Burn Rate: $9.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: INSIDE WIRING TECHNICAL/OUTSIDE CABLE PLANT TECH/SWITCH SERVICES TECH SUPPORT

Place of Performance

Location: CHESAPEAKE, CHESAPEAKE (CITY) County, VIRGINIA, 23320

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $12.5 million to GSTEK, INC. for work described as: INSIDE WIRING TECHNICAL/OUTSIDE CABLE PLANT TECH/SWITCH SERVICES TECH SUPPORT Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. The duration of the contract (1278 days) indicates a long-term need for these technical support services. 4. The small business set-aside status is false, meaning it was not specifically targeted for small businesses. 5. The contract was awarded to GSTEK, Inc., whose performance and track record warrant further examination. 6. The North American Industry Classification System (NAICS) code 541330 points to Engineering Services. 7. The contract was awarded by the Department of the Navy, a component of the Department of Defense.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without more detailed cost breakdowns and comparisons to similar services. The Cost Plus Fixed Fee (CPFF) structure means the final cost is subject to actual expenses incurred plus a fixed fee, which can sometimes lead to higher overall costs than fixed-price contracts if not tightly controlled. However, CPFF can be appropriate for complex projects where the scope is not fully defined at the outset. Further analysis would require comparing GSTEK's fee and overhead rates against industry averages for similar engineering support services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bids suggests a moderate level of competition for this requirement. While full and open competition is generally preferred for maximizing value, the limited number of bidders could imply potential barriers to entry for other firms or a niche market for these specific engineering services.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices through market forces. However, with only two bidders, the potential for significant price reduction may have been limited compared to a scenario with numerous competitive offers.

Public Impact

The Department of the Navy benefits from specialized technical support for its inside wiring, outside cable plant, and switch services. This contract ensures the continued operation and maintenance of critical communication infrastructure for naval operations. The services provided are essential for maintaining secure and reliable communication networks within naval facilities. The contract supports the technical workforce involved in maintaining and upgrading complex telecommunications systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can incentivize higher spending if not rigorously monitored.
Limited competition (2 bidders) may have restricted price discovery and potentially led to a less optimal price for taxpayers.
The contract's duration and cost require ongoing scrutiny to ensure efficiency and prevent scope creep.

Positive Signals

Awarded through full and open competition, adhering to best practices for government procurement.
The contract addresses a clear technical support need within the Department of the Navy.
The fixed fee component of the CPFF contract provides some level of cost predictability for the contractor's profit.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting telecommunications infrastructure. The market for such services is driven by government and commercial demand for maintaining and upgrading complex network systems. Comparable spending benchmarks would involve analyzing other DoD or federal contracts for similar technical support and engineering services, particularly those related to IT infrastructure and communication systems.

Small Business Impact

The contract was not set aside for small businesses, as indicated by 'sb: false'. This means large businesses were eligible to compete and potentially win. There is no explicit information provided regarding subcontracting plans or their impact on the small business ecosystem. Without this data, it's difficult to assess the extent to which small businesses may have benefited indirectly through subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program management office within the Department of the Navy. Accountability measures would be embedded in the contract's performance work statement and delivery requirements. Transparency is generally facilitated through contract award databases, though detailed performance metrics and cost breakdowns may not always be publicly accessible. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense IT Infrastructure Support
Naval Communication Systems Maintenance
Engineering Services for Federal Agencies
Telecommunications Support Contracts
Cost Plus Fixed Fee Contracts

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type requires careful monitoring to prevent cost overruns.
Limited competition (2 bidders) may indicate potential market concentration or barriers to entry.
The specific technical expertise required may limit the pool of qualified contractors.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.5 million to GSTEK, INC.. INSIDE WIRING TECHNICAL/OUTSIDE CABLE PLANT TECH/SWITCH SERVICES TECH SUPPORT

Who is the contractor on this award?

The obligated recipient is GSTEK, 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 $12.5 million.

What is the period of performance?

Start: 2008-03-17. End: 2011-09-16.

What is GSTEK, Inc.'s track record with the Department of Defense and other federal agencies, particularly concerning contracts of similar scope and value?

Analyzing GSTEK, Inc.'s contract history reveals multiple awards across various federal agencies, including the Department of Defense. While specific details on past performance for this particular $12.5 million contract are not fully elaborated in the provided data, a broader review of their federal contracting portfolio would be necessary. This would involve examining past performance evaluations, any reported disputes or contract terminations, and their success rate in winning competitive bids. Understanding their experience with Cost Plus Fixed Fee (CPFF) contracts and their ability to manage costs effectively within such structures is crucial. A comprehensive assessment would also look at their financial stability and capacity to handle large-scale technical support projects, comparing their historical performance against contract requirements and stated objectives.

How does the awarded amount of $12.5 million compare to the estimated value or benchmark pricing for similar technical support and engineering services contracts within the federal government?

The $12.5 million total value for this 1278-day contract (approximately 3.5 years) translates to an average annual value of roughly $3.57 million. To benchmark this, one would need to compare it against similar contracts awarded by the Department of Defense or other agencies for inside wiring, outside cable plant, and switch services technical support. Key comparison points include the contract type (CPFF), the specific technical requirements, the geographic location of service delivery, and the number of bidders. If comparable contracts were awarded under fixed-price structures or with more robust competition, and at a lower annual rate, it could suggest that this contract's pricing might be on the higher side. Conversely, if the complexity or specialized nature of the services justifies the cost, and if market rates for such specialized engineering support are high, then the value could be considered fair.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract structure for these types of technical services, and how were they mitigated?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns. Because the contractor is reimbursed for allowable costs plus a fixed fee, there can be less incentive to control expenses compared to fixed-price contracts. This can lead to the government paying more than initially anticipated if costs escalate. Mitigation strategies typically involve stringent oversight, detailed cost accounting standards, regular audits of incurred costs, and a clearly defined scope of work. The fixed fee itself acts as a ceiling on the contractor's profit, but the total cost can still increase. For this contract, the Department of the Navy would need robust project management and financial oversight to ensure that costs remain reasonable and that the fixed fee adequately compensates GSTEK, Inc. for the defined scope without incentivizing unnecessary expenditures.

Given the contract's focus on technical support for wiring, cable plant, and switch services, what is the potential impact on the operational readiness and technological modernization of the Departmen

This contract directly supports the operational readiness of the Department of the Navy by ensuring the reliable functioning of its communication infrastructure. Up-to-date and well-maintained wiring, cable plants, and switch services are fundamental to secure command and control, data transmission, and internal communications. Failure in these areas could disrupt critical naval operations, impacting everything from daily administration to mission execution. Furthermore, the technical support provided may also contribute to the Navy's technological modernization efforts by ensuring that existing systems are optimized and potentially by facilitating the integration of new technologies. The effectiveness of this contract in supporting modernization depends on whether the technical support extends to advising on or implementing upgrades, rather than just maintaining legacy systems.

How has historical spending by the Department of the Navy on engineering and technical support services evolved, and does this contract represent a significant shift or continuation of past trends?

Analyzing historical spending trends for the Department of the Navy (DoN) on engineering and technical support services would provide context for this $12.5 million contract. Typically, the DoN invests heavily in maintaining and upgrading its complex technological infrastructure, which includes extensive communication networks. If past spending patterns show consistent investment in similar services, this contract may represent a continuation of established needs. However, if there have been significant shifts in technology, budget allocations, or strategic priorities within the DoN, this contract's value and scope could indicate a new direction or an adjustment to evolving requirements. Without specific historical data on DoN's spending in this precise category, it's difficult to definitively state whether this contract is a significant shift or a continuation, but it falls within a category of perennial need for large military organizations.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002408R3040

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1100 MADISON PLZ A, CHESAPEAKE, VA, 90

Business Categories: Category Business, Service Disabled Veteran Owned Business, Small Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $16,823,532

Exercised Options: $16,823,532

Current Obligation: $12,469,617

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017805D4357

IDV Type: IDC

Timeline