DoD's $17.3M contract for Iraq comms repair awarded non-competitively, raising value questions

Contract Overview

Contract Amount: $17,286,577 ($17.3M)

Contractor: Advanced International Electronic Equipment Company W.L.L.

Awarding Agency: Department of Defense

Start Date: 2009-05-12

End Date: 2010-05-11

Contract Duration: 364 days

Daily Burn Rate: $47.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ADVANCED FIRST RESPONDER NETWORK - IRAQ

Plain-Language Summary

Department of Defense obligated $17.3 million to ADVANCED INTERNATIONAL ELECTRONIC EQUIPMENT COMPANY W.L.L. for work described as: ADVANCED FIRST RESPONDER NETWORK - IRAQ Key points: 1. The contract's value for communication equipment repair in Iraq appears high given the duration and lack of competition. 2. Limited competition suggests potential for inflated pricing and reduced value for taxpayer dollars. 3. The sole-source nature of this award is a significant risk indicator for cost-effectiveness. 4. Performance context is limited due to the non-competitive award, making it difficult to benchmark success. 5. This contract falls within the Defense sector, specifically supporting communication equipment maintenance. 6. The absence of small business set-asides or subcontracting plans is noted.

Value Assessment

Rating: questionable

The total award amount of $17.3 million for a 364-day contract for communication equipment repair and maintenance in Iraq raises concerns about value for money. Without competitive bidding, it is difficult to ascertain if the price reflects fair market value. The benchmarked contract value of $4.75 million suggests this award may be significantly over-priced, especially considering it is for a single year. Further analysis of the specific services rendered and the market rates for similar services in the region is needed to definitively assess value.

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. This approach significantly limits the number of potential bidders and removes the downward price pressure typically associated with a competitive bidding process. The lack of competition means the government did not explore alternative vendors or solutions that might have offered better value or pricing.

Taxpayer Impact: Sole-source awards generally result in higher costs for taxpayers as the government lacks leverage to negotiate the best possible price. This can lead to inefficient use of public funds.

Public Impact

The primary beneficiaries of this contract are the U.S. military forces operating in Iraq, who rely on functional communication equipment for operational effectiveness. The services delivered include repair and maintenance of communication equipment, ensuring the continuity of critical communication networks. The geographic impact is concentrated in Iraq, supporting military operations within that theater. Workforce implications are likely limited to the contractor's personnel, with no direct public sector job creation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to overpayment.
Sole-source award limits transparency and accountability.
Potential for contractor lock-in and reduced service quality over time.
No clear mechanism for performance benchmarking or value assessment due to non-competitive nature.

Positive Signals

Contract addresses a critical need for communication equipment maintenance in a deployed environment.
The contractor is responsible for ensuring operational readiness of essential communication systems.

Sector Analysis

This contract falls within the broader Defense sector, specifically addressing the maintenance and repair of communication equipment. The market for such services in deployed or high-risk environments is often specialized and can be subject to limited competition due to logistical and security challenges. Comparable spending benchmarks are difficult to establish without more detailed information on the specific types of communication equipment and the scope of repair services required.

Small Business Impact

There is no indication that this contract included small business set-asides or subcontracting requirements. The sole-source nature of the award further suggests that opportunities for small businesses to participate in this specific contract were likely minimal or non-existent.

Oversight & Accountability

Oversight mechanisms for this contract are not detailed in the provided data. Given the sole-source award and the deployed nature of the services, robust oversight would be crucial to ensure performance and prevent potential cost overruns or fraud. The Department of Defense's Inspector General would typically have jurisdiction over such contracts.

Related Government Programs

Department of Defense Communication Systems
Iraq Security Assistance Programs
Contingency Operations Support Contracts
Communication Equipment Maintenance Services

Risk Flags

Sole-source award
High contract value for duration
Lack of competition data
Potential for overpricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.3 million to ADVANCED INTERNATIONAL ELECTRONIC EQUIPMENT COMPANY W.L.L.. ADVANCED FIRST RESPONDER NETWORK - IRAQ

Who is the contractor on this award?

The obligated recipient is ADVANCED INTERNATIONAL ELECTRONIC EQUIPMENT COMPANY W.L.L..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $17.3 million.

What is the period of performance?

Start: 2009-05-12. End: 2010-05-11.

What specific types of communication equipment were covered under this contract, and what was the scope of repair and maintenance services?

The provided data does not specify the exact types of communication equipment or the detailed scope of repair and maintenance services. The North American Industry Classification System (NAICS) code 811213, 'Electronic and Precision Equipment Repair and Maintenance,' is broad and encompasses a wide range of electronic devices. To fully assess the contract's value and necessity, a detailed breakdown of the equipment (e.g., radios, satellite terminals, network infrastructure components) and the required services (e.g., routine maintenance, emergency repairs, parts replacement, diagnostics) would be essential. Without this specificity, it's challenging to benchmark costs accurately against similar services.

Why was this contract awarded on a sole-source basis, and what efforts were made to justify this approach?

The data indicates the contract was awarded as 'NOT AVAILABLE FOR COMPETITION,' which is synonymous with a sole-source award. Justifications for sole-source contracts typically involve circumstances where only one responsible source can provide the required supply or service. This could be due to unique capabilities, urgent and compelling needs, or specific security requirements. However, without further documentation (such as a Justification and Approval document), the specific rationale for awarding this $17.3 million contract non-competitively remains unclear. Such justifications are critical for ensuring taxpayer funds are used appropriately and that competition is only bypassed when absolutely necessary.

How does the awarded amount of $17.3 million compare to similar communication repair contracts in deployed environments or for the Department of the Army?

Comparing this $17.3 million contract to similar ones is challenging without more specific data points on contract duration, scope, and location. However, the provided benchmark of $4.75 million (presumably an average or comparable contract value) suggests a significant discrepancy. For a one-year contract, $17.3 million for communication repair appears exceptionally high, especially if the benchmark represents a similar service level. Factors like the operational tempo, security risks, logistical complexities in Iraq, and the specific technology involved could inflate costs, but the magnitude of the difference warrants scrutiny. A detailed analysis of historical spending patterns for communication maintenance in similar theaters would be necessary for a robust comparison.

What performance metrics or key performance indicators (KPIs) were established for this contract to measure the contractor's success?

The provided data does not include information on performance metrics or KPIs established for this contract. In a sole-source award, particularly for services in a deployed environment, clearly defined performance standards are crucial for accountability. These metrics should ideally cover aspects like equipment uptime, response times for repairs, quality of service, and adherence to maintenance schedules. Without documented KPIs and a system for tracking performance against them, it is difficult for the Department of the Army to objectively assess whether the contractor delivered the required services effectively and efficiently, and whether the $17.3 million expenditure represented good value.

What is the track record of ADVANCED INTERNATIONAL ELECTRONIC EQUIPMENT COMPANY W.L.L. with the Department of Defense or other government agencies?

The provided data does not offer details on the track record of ADVANCED INTERNATIONAL ELECTRONIC EQUIPMENT COMPANY W.L.L. with the Department of Defense or other government agencies. A comprehensive assessment of this contract's value and risk would benefit from understanding the company's past performance on similar contracts, including their history of meeting deadlines, quality standards, and budget constraints. Information regarding past contract awards, terminations, or performance reviews would provide valuable context for evaluating the appropriateness of this sole-source award and the potential risks associated with the contractor.

What were the potential risks associated with awarding this contract non-competitively, and how were they mitigated?

The primary risk associated with awarding this contract non-competitively is the potential for inflated pricing and reduced value for taxpayer money, as competition drives down costs and encourages efficiency. Other risks include a lack of innovation, potential for contractor complacency, and difficulty in objectively assessing performance. Mitigation strategies for sole-source awards often involve rigorous price analysis, detailed scope definition, strong contract oversight, and clear performance metrics. However, the extent to which these mitigation efforts were applied to this specific $17.3 million contract is not detailed in the provided data, making it difficult to assess the effectiveness of risk management.

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 AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: KUWAIT FREE TRADE ZONE, KUWAIT

Business Categories: Category Business, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Labor Surplus Area Firm, Minority Owned Business, Other Minority Owned Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $17,286,577

Exercised Options: $17,286,577

Current Obligation: $17,286,577

Contract Characteristics

Cost or Pricing Data: NO

Timeline