DoD's $1.2B communication equipment contract awarded without competition, raising value concerns

Contract Overview

Contract Amount: $12,011,432 ($12.0M)

Contractor: Domestic Awardees (undisclosed)

Awarding Agency: Department of Defense

Start Date: 2007-09-20

End Date: 2009-12-31

Contract Duration: 833 days

Daily Burn Rate: $14.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE

Sector: Other

Official Description: COMMUNICATION EQUIPMENT AND INSTALL

Plain-Language Summary

Department of Defense obligated $12.0 million to DOMESTIC AWARDEES (UNDISCLOSED) for work described as: COMMUNICATION EQUIPMENT AND INSTALL Key points: 1. The contract's value of $1.2 billion suggests a significant investment in communication equipment. 2. Lack of disclosed awardees prevents a clear understanding of market participation and potential competition. 3. The 'Not Available for Competition' status is a key risk indicator, suggesting potential inefficiencies. 4. Awarded in 2007 and ending in 2009, this contract predates current market dynamics and pricing standards. 5. The fixed-price contract type offers some cost certainty but may not reflect evolving technology costs. 6. The absence of small business participation is noted, though not explicitly required by the contract terms.

Value Assessment

Rating: questionable

Benchmarking the value of this $1.2 billion contract is challenging due to the lack of disclosed awardees and the 'Not Available for Competition' status. Without comparable contracts or market data from the period, it's difficult to assess if the pricing was competitive or represented good value for money. The fixed-price nature provides some cost control, but the lack of competition suggests potential for overpayment compared to a more open market scenario.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'Not Available for Competition' (NAC) justification, indicating that full and open competition was not pursued. The specific reasons for this determination are not provided, but NAC awards typically stem from unique capabilities, urgent needs, or national security concerns. The lack of disclosed awardees further obscures the competitive landscape, making it impossible to ascertain the number of potential bidders or the extent of price discovery.

Taxpayer Impact: Sole-source awards, especially for large dollar amounts, can limit opportunities for taxpayers to benefit from competitive pricing and innovation. Without a competitive process, there's a higher risk that the government may not secure the best possible value for its investment.

Public Impact

The primary beneficiaries are likely Department of Defense units requiring advanced communication equipment. The contract facilitated the acquisition and installation of essential communication systems for military operations. Geographic impact is broad, supporting DoD operations across various theaters. Workforce implications may include specialized technical roles for installation and maintenance of the equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced value for taxpayer funds.
Undisclosed awardees make it difficult to assess contractor performance and market dynamics.
The age of the contract (awarded 2007) means current market conditions and technological advancements are not reflected.
The 'Not Available for Competition' justification requires scrutiny to ensure it was appropriate and well-documented.
Fixed-price contracts can sometimes lead to contractors absorbing less risk if scope changes or unforeseen issues arise.

Positive Signals

The fixed-price contract type offers a degree of budget certainty for the government.
The substantial value indicates a significant investment in critical communication infrastructure.
The contract duration suggests a long-term need for these communication capabilities.

Sector Analysis

This contract falls within the manufacturing sector for radio and television broadcasting and wireless communications equipment. The market for such equipment is characterized by rapid technological advancements, high research and development costs, and often significant government procurement. The $1.2 billion value positions this as a major procurement within its sub-sector, likely involving specialized and potentially high-security communication systems. Comparable spending benchmarks would typically involve other large-scale DoD procurements for similar C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) related equipment.

Small Business Impact

The contract details indicate that small business participation was not a specific requirement (ss: false, sb: false). Given the large scale and specialized nature of communication equipment procurement, it is common for prime contracts to be awarded to large defense contractors. There is no information provided on subcontracting plans, so the extent to which small businesses may have benefited indirectly through subcontracts remains unknown. This lack of explicit set-aside or reporting makes it difficult to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the Department of Defense's contracting officers, program managers, and potentially the Defense Contract Audit Agency (DCAA) for financial oversight. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse were suspected. Transparency is limited by the lack of disclosed awardees and the 'Not Available for Competition' justification, making a full assessment of accountability challenging without further documentation.

Related Government Programs

DoD Communication Systems Procurement
Wireless Communications Equipment Manufacturing
Defense C4ISR Systems
Fixed-Price Contracts
Sole-Source Defense Contracts

Risk Flags

Lack of Competition
Undisclosed Awardee
Potential for Overpricing
Aging Technology

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.0 million to DOMESTIC AWARDEES (UNDISCLOSED). COMMUNICATION EQUIPMENT AND INSTALL

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 Army).

What is the total obligated amount?

The obligated amount is $12.0 million.

What is the period of performance?

Start: 2007-09-20. End: 2009-12-31.

What specific communication equipment was procured under this contract?

The contract description indicates 'COMMUNICATION EQUIPMENT AND INSTALL'. While the specific type of equipment is not detailed in the provided data, the NAICS code 334220 ('Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing') suggests it likely involved hardware such as radios, transceivers, antennas, base stations, and related infrastructure components. The 'INSTALL' component implies that the contract also covered the deployment, setup, and integration of this equipment into existing military networks and facilities. Given the DoD context, this could range from tactical field communication systems to more robust strategic network infrastructure.

What were the specific justifications for awarding this contract without full and open competition?

The provided data states the contract was 'NOT AVAILABLE FOR COMPETITION' (NAC). Specific justifications for NAC awards typically fall under FAR Part 6 exceptions, such as only one responsible source being available, or in cases of urgent and compelling need where competition cannot be timely. Without access to the contract's justification and approval (J&A) document, the precise reasons remain unknown. Common rationales include proprietary technology, unique system integration requirements, or critical national security needs that preclude broader solicitation. A thorough review of the J&A would be necessary to validate the appropriateness of the NAC determination.

How does the $1.2 billion contract value compare to similar DoD procurements for communication equipment during that period (2007-2009)?

Comparing the $1.2 billion value requires access to historical DoD procurement databases and analysis of similar contracts awarded between 2007 and 2009 for communication equipment. Contracts under NAICS code 334220 or related defense communication categories would be relevant. However, the 'Not Available for Competition' status complicates direct value comparisons, as sole-source awards may not reflect market-driven pricing. Generally, large-scale DoD communication system procurements can range from hundreds of millions to billions of dollars, depending on the scope, technology, and number of units. Without specific comparable contract data, it's difficult to definitively state if $1.2 billion was high or low, but it signifies a substantial investment.

What was the track record of the undisclosed contractor(s) prior to or during this contract period?

As the awardees are listed as 'DOMESTIC AWARDEES (UNDISCLOSED)', it is impossible to determine their specific track record based solely on the provided data. To assess their performance, one would need to identify the contractor(s) through other means, such as contract award databases that include awardee names or agency procurement records. Once identified, their history with the DoD or other government agencies, past performance evaluations, and any history of contract disputes or successes would need to be examined. The lack of transparency regarding the awardee hinders a direct assessment of their reliability and capability for this specific $1.2 billion contract.

What were the potential risks associated with a fixed-price contract of this magnitude awarded non-competitively?

A fixed-price contract, while offering budget certainty, carries risks, especially when awarded non-competitively. For the government, the primary risk is paying a price that is not optimized through competition, potentially leading to overpayment if the contractor's costs are significantly lower than the agreed price. If the contractor underestimated costs or encountered unforeseen issues, they might seek change orders or claims, potentially increasing the total cost. For the contractor, the risk lies in absorbing cost overruns if their estimates were inaccurate. In a non-competitive scenario, the government lacks the leverage of multiple bids to ensure the price reflects true market value and efficiency.

How did the duration of the contract (833 days, approx. 2.3 years) align with the typical lifecycle of communication equipment?

A contract duration of approximately 2.3 years (833 days) for communication equipment and installation is relatively standard for acquiring and deploying specific systems. This timeframe allows for procurement, manufacturing, delivery, integration, testing, and initial operational use. However, the lifecycle of communication technology can be much shorter, with rapid obsolescence being a common challenge. While the initial deployment might fit within this period, the equipment's relevance and supportability could diminish quickly thereafter. The contract's end date of December 2009 means the equipment has been in service for over a decade, raising questions about upgrades, maintenance, and potential replacement needs.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1800 F ST NW, WASHINGTON, DC, 20405

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $12,011,432

Exercised Options: $12,011,432

Current Obligation: $12,011,432

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline