DoD's $19.3M contract for satellite comms services shows fair value despite limited competition

Contract Overview

Contract Amount: $19,313,115 ($19.3M)

Contractor: Marshall Communications Corp

Awarding Agency: Department of Defense

Start Date: 2012-08-31

End Date: 2017-08-30

Contract Duration: 1,825 days

Daily Burn Rate: $10.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: DIGITAL VIDEO BROADCAST RETURN CHANNEL SATELLITE (DVB-RCS) FIELD SERVICE REPRESENTATIVE (FSR) SERVICES FOR OVERSEAS CONTINGENCY OPERATIONS (OCO)

Place of Performance

Location: HOLLYWOOD, SAINT MARYS County, MARYLAND, 20636

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $19.3 million to MARSHALL COMMUNICATIONS CORP for work described as: DIGITAL VIDEO BROADCAST RETURN CHANNEL SATELLITE (DVB-RCS) FIELD SERVICE REPRESENTATIVE (FSR) SERVICES FOR OVERSEAS CONTINGENCY OPERATIONS (OCO) Key points: 1. Contract value appears reasonable given the duration and specialized nature of services. 2. Competition was limited, potentially impacting price discovery and taxpayer value. 3. Performance risk is moderate, with a history of contract awards. 4. Services are critical for overseas contingency operations, supporting essential communication infrastructure. 5. The contract falls within the engineering services sector, supporting defense communications. 6. Contract type (Cost Plus Fixed Fee) can lead to cost overruns if not managed closely.

Value Assessment

Rating: fair

The total contract value of $19.3 million over five years averages approximately $3.86 million annually. This figure seems within a reasonable range for specialized field service representative support for complex satellite communication systems, especially in overseas contingency operations. Benchmarking against similar contracts for niche technical support in austere environments is challenging due to data limitations, but the pricing appears to be in line with the expected costs for highly skilled personnel operating in demanding conditions. The fixed fee component provides some cost control, but the cost-plus nature requires diligent oversight to ensure efficiency.

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 offers. However, the data indicates only four bids were received. While full and open competition is the preferred method, a low number of bidders can suggest a niche market or high barriers to entry, potentially limiting the competitive pressure on pricing. The agency's ability to secure competitive pricing depends on the attractiveness of the opportunity to potential bidders and the effectiveness of the solicitation.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it aims to foster a competitive environment that drives down prices. However, with only four bidders, the potential for significant cost savings may have been constrained compared to a scenario with a larger pool of interested parties.

Public Impact

Provides critical communication support for U.S. military operations in overseas contingency zones. Ensures the functionality and maintenance of Digital Video Broadcast - Return Channel Satellite (DVB-RCS) systems. Supports the Department of Defense's ability to maintain command and control in deployed environments. Indirectly benefits military personnel by ensuring reliable communication links for operational needs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contract type introduces inherent risk of cost escalation if not rigorously managed.
Limited number of bidders (4) may indicate a lack of robust competition, potentially leading to suboptimal pricing.
Services are for overseas contingency operations, which can involve unpredictable operational demands and higher costs.
Contract duration of 5 years is substantial, increasing exposure to potential performance issues over time.

Positive Signals

Awarded under full and open competition, maximizing the potential pool of qualified contractors.
Contractor (Marshall Communications Corp) has a history of receiving contract awards, suggesting some level of established performance.
Specific focus on a niche technology (DVB-RCS) indicates specialized expertise is being leveraged.
The contract has a defined end date, providing a clear timeframe for service delivery and review.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), specifically supporting defense communications infrastructure. The market for specialized field service representatives for satellite communication systems, particularly in support of contingency operations, is a niche within the broader aerospace and defense industry. Spending in this area is driven by the need for reliable, high-bandwidth communication in remote and often challenging environments. Comparable spending benchmarks are difficult to establish precisely due to the specialized nature of the technology and operational context, but the overall defense spending on communication systems runs into billions annually.

Small Business Impact

This contract does not appear to have a small business set-aside (SB is false). There is no explicit information regarding subcontracting plans for small businesses. Given the specialized nature of the services, it is possible that larger prime contractors would be better positioned to fulfill the requirements. The impact on the small business ecosystem is likely minimal unless specific subcontracting opportunities arise, which are not detailed in the provided data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The contract type (Cost Plus Fixed Fee) necessitates close monitoring of costs and adherence to the fixed fee. Transparency is facilitated through contract award databases, but detailed operational oversight specifics are not publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Communications Systems
Satellite Communication Services
Contingency Operations Support
Engineering Services Contracts
Department of Defense IT and Communications

Risk Flags

Cost Overruns Risk (CPFF)
Limited Competition Impact
Overseas Operational Risks
Niche Technology Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.3 million to MARSHALL COMMUNICATIONS CORP. DIGITAL VIDEO BROADCAST RETURN CHANNEL SATELLITE (DVB-RCS) FIELD SERVICE REPRESENTATIVE (FSR) SERVICES FOR OVERSEAS CONTINGENCY OPERATIONS (OCO)

Who is the contractor on this award?

The obligated recipient is MARSHALL COMMUNICATIONS CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $19.3 million.

What is the period of performance?

Start: 2012-08-31. End: 2017-08-30.

What is the track record of Marshall Communications Corp in performing similar defense contracts?

Marshall Communications Corp has a history of receiving contract awards from the Department of Defense, as indicated by the presence of this contract and potentially others in federal procurement databases. While the provided data doesn't detail the success rate or specific performance metrics of past contracts, the fact that they were awarded this Delivery Order suggests they met the initial qualifications. Further analysis would require examining past performance reviews, any documented disputes or contract terminations, and the types and values of previous awards to fully assess their track record. However, the award itself implies a baseline level of capability and reliability deemed sufficient by the contracting agency at the time of award.

How does the average annual cost of this contract compare to similar satellite communication field service contracts?

The average annual cost of this contract is approximately $3.86 million ($19.3M / 5 years). Benchmarking this against similar contracts is challenging due to the highly specialized nature of DVB-RCS field service for overseas contingency operations. Contracts for general satellite support or domestic operations would likely be lower. However, considering the need for specialized technical expertise, deployment to potentially hazardous or remote locations, and the 24/7 nature often required for contingency support, this annual cost appears to be within a reasonable range for such niche services. Without access to a database of comparable niche contracts, a precise value-for-money assessment is difficult, but the cost reflects the complexity and operational environment.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for field services?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract, like this one, is the potential for cost overruns. While the fixed fee provides the contractor with a defined profit margin, the 'cost plus' portion means the government reimburses the contractor for allowable costs incurred. If the contractor's costs exceed initial estimates, the government bears that burden. For field services in contingency operations, unforeseen logistical challenges, equipment failures, or extended deployment durations can significantly increase costs. Effective oversight by the Defense Contract Management Agency (DCMA) is crucial to scrutinize incurred costs, ensure efficiency, and prevent unnecessary expenditures to mitigate this risk.

How critical are these DVB-RCS FSR services to ongoing overseas contingency operations?

These Digital Video Broadcast - Return Channel Satellite (DVB-RCS) Field Service Representative (FSR) services are critically important for ongoing overseas contingency operations. DVB-RCS technology enables reliable, two-way satellite communication, which is essential for command and control, intelligence sharing, logistics coordination, and maintaining situational awareness in theaters of operation where terrestrial infrastructure may be damaged, non-existent, or insecure. FSRs provide the hands-on technical expertise required to install, maintain, troubleshoot, and operate these complex systems, ensuring that communication links remain functional under demanding conditions. Without this support, military units could face significant disruptions in their ability to communicate, impacting mission effectiveness and personnel safety.

What is the historical spending trend for similar satellite communication support services within the Department of Defense?

Historical spending trends for similar satellite communication support services within the Department of Defense have generally been substantial and increasing, driven by the growing reliance on satellite technology for global operations and intelligence gathering. While specific data for DVB-RCS FSR services in OCO is not provided, the overall DoD budget for communications and IT infrastructure consistently represents a significant portion of its overall spending. Factors such as evolving threats, the need for higher bandwidth, and the expansion of operational theaters contribute to sustained or increased investment in these areas. Analyzing broader categories like 'Satellite Communications Services' or 'Information Technology Support' over the past decade would likely reveal a consistent demand and significant financial commitment from the DoD.

What are the implications of having only four bidders for this specialized service contract?

Having only four bidders for this specialized service contract has several implications. Firstly, it suggests that the market for DVB-RCS Field Service Representatives in overseas contingency operations is relatively small or has high barriers to entry, potentially due to required certifications, security clearances, or specialized technical knowledge. Secondly, while four bidders represent some level of competition, it is less than ideal compared to a scenario with numerous offers. This limited competition could reduce the downward pressure on pricing, meaning the government might not achieve the lowest possible cost. It also increases the risk that if one or two bidders are disqualified or withdraw, the remaining competition becomes even more constrained, potentially impacting the fairness of the award process and the ultimate value for taxpayers.

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: N0002412R3178

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Mission Solutions Group Inc (UEI: 079844679)

Address: 44040 AIRPORT VIEW DR STE A, HOLLYWOOD, MD, 20636

Business Categories: Black American Owned Business, Category Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $43,088,631

Exercised Options: $43,088,631

Current Obligation: $19,313,115

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017807D5143

IDV Type: IDC

Timeline