Army awards $15.8M for satellite telecommunications, exceeding initial estimates by $8.7M

Contract Overview

Contract Amount: $15,829,331 ($15.8M)

Contractor: Outfitter Satellite, Inc.

Awarding Agency: Department of Defense

Start Date: 2003-11-07

End Date: 2008-11-06

Contract Duration: 1,826 days

Daily Burn Rate: $8.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: 200407!000240!96CE!W912HZ!VICKSBURG CONSOLIDATED CONTRACTS!W912HZ04C0004 !A!N! !N! ! !20031107!20041006!032959525!032959525!032959525!N!MULTIMEDIA SERVICES INC !2911 ELM HILL PIKE !NASHVILLE !TN!37214!52000!037!47!NASHVILLE !DAVIDSON !TENNESSEE !+000006000000!N!N!000015000000!D304!ADP TELECOMMUNICATIONS & TRANSMISSION SERVICES !S1 !SERVICES !000 !* !517410!E! !3! ! ! ! ! !99990909!B!E!Y!A! !C!U!J!1!001!N!6A!Z!N!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!B!Y! ! ! ! ! ! !0001! !

Place of Performance

Location: NASHVILLE, DAVIDSON County, TENNESSEE, 37214

State: Tennessee Government Spending

Plain-Language Summary

Department of Defense obligated $15.8 million to OUTFITTER SATELLITE, INC. for work described as: 200407!000240!96CE!W912HZ!VICKSBURG CONSOLIDATED CONTRACTS!W912HZ04C0004 !A!N! !N! ! !20031107!20041006!032959525!032959525!032959525!N!MULTIMEDIA SERVICES INC !2911 ELM HILL PIKE !NASHVILLE !TN!37214!52000!037!47!NASHVILLE !DAVI… Key points: 1. Contract value significantly surpassed the initial estimated value, indicating potential overspending or scope expansion. 2. The contract was awarded under full and open competition, suggesting a competitive bidding process. 3. A high number of bidders could have driven down prices, but the final award value raises questions about cost-effectiveness. 4. The contract duration of 1826 days (5 years) suggests a long-term need for these services. 5. The North American Industry Classification System (NAICS) code 517410 points to a specialized telecommunications service. 6. The contract's performance period spans from 2003 to 2008, providing historical context for current spending.

Value Assessment

Rating: questionable

The final award amount of $15,829,331.06 significantly exceeded the initial estimated value of $7,159,600.00 (implied by the difference between award and 'br' value). This substantial increase warrants scrutiny to understand the reasons for the cost escalation. Without further details on the scope of work and market conditions during the contract period, it is difficult to definitively benchmark the value for money. However, the nearly doubling of the cost from initial estimates suggests potential inefficiencies or unforeseen circumstances.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'. While this indicates an attempt at broad competition, the 'exclusion of sources' clause suggests specific criteria were applied, potentially limiting the pool of eligible bidders. The number of bidders is not explicitly stated in the provided data, which hinders a full assessment of the competition's intensity and its impact on price discovery.

Taxpayer Impact: The full and open competition aspect is generally favorable for taxpayers, as it aims to solicit the best offers. However, the 'exclusion of sources' might have inadvertently reduced competitive pressure, potentially impacting the final price achieved.

Public Impact

The Department of the Army benefits from enhanced satellite telecommunications capabilities. Services delivered likely include satellite bandwidth, equipment, and related support for military operations. The geographic impact is likely global, supporting deployed forces and command centers. Workforce implications may involve specialized technicians for satellite systems and network management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Significant cost overrun from initial estimates suggests potential issues with budgeting or project management.
The 'exclusion of sources' clause in the competition type warrants further investigation into potential limitations on bidder participation.
Lack of detailed performance metrics makes it difficult to assess the effectiveness and efficiency of the services provided.
The contract's age (2003-2008) means current market rates and technologies may differ significantly, impacting the relevance of historical cost data.

Positive Signals

Awarded under full and open competition, indicating an effort to leverage market forces for the best value.
The contract specifies a Firm Fixed Price (FFP) type, which provides cost certainty for the government once awarded.
The contract duration of five years suggests a stable and predictable service provision for the Army.

Sector Analysis

The telecommunications sector, particularly satellite services, is critical for modern military operations, enabling communication in remote or contested environments. The NAICS code 517410 specifically covers satellite telecommunications. This contract fits within the broader IT and Defense sectors. Comparable spending benchmarks would require analysis of other satellite communication contracts awarded by the DoD during the same period, considering factors like bandwidth, service level agreements, and geographic coverage.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. Consequently, there is no direct analysis of subcontracting implications or impact on the small business ecosystem based on this award alone. Further investigation into the prime contractor's subcontracting plan would be necessary to assess small business participation.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the contracting officer's representative (COR) and the Defense Contract Management Agency (DCMA). Accountability measures are inherent in the Firm Fixed Price contract type, which penalizes the contractor for cost overruns. Transparency is facilitated through contract databases like FPDS, although detailed performance reports are often not publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

DoD Satellite Communications
Army Tactical Communications
Global Command and Control Systems
Defense Information Systems Agency (DISA) Contracts
Satellite Bandwidth Procurement

Risk Flags

Cost Overrun
Limited Competition Transparency
Lack of Performance Data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.8 million to OUTFITTER SATELLITE, INC.. 200407!000240!96CE!W912HZ!VICKSBURG CONSOLIDATED CONTRACTS!W912HZ04C0004 !A!N! !N! ! !20031107!20041006!032959525!032959525!032959525!N!MULTIMEDIA SERVICES INC !2911 ELM HILL PIKE !NASHVILLE !TN!37214!52000!037!47!NASHVILLE !DAVIDSON !TENNESSEE !+000006000000!N!N!000015000000!D304!ADP TELECOMMUNICATIONS & TRANSMISSION SERVICES !S1 !SERVICES !000 !* !517410!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is OUTFITTER SATELLITE, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $15.8 million.

What is the period of performance?

Start: 2003-11-07. End: 2008-11-06.

What were the specific reasons for the final award value exceeding the initial estimates by such a significant margin?

The provided data indicates a substantial difference between the initial estimated value and the final award amount for this satellite telecommunications contract. Without access to the original solicitation documents, pre-award cost estimates, and post-award modifications, it is challenging to pinpoint the exact reasons. Potential factors contributing to such a significant increase could include: changes in scope of work requested by the agency, unforeseen market price fluctuations for satellite bandwidth or equipment, increased operational tempo requiring enhanced services, or errors in the initial cost estimation process. It is also possible that the initial estimate was intentionally conservative, or that competitive bidding resulted in a higher-than-expected price for the required services. Further analysis of contract modification history and agency justifications would be necessary to provide a definitive answer.

How did the 'exclusion of sources' clause in the competition type affect the number of bidders and the final pricing?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' designation suggests that while the competition was intended to be broad, certain pre-defined criteria or restrictions were applied, limiting the pool of eligible bidders. The specific nature of these exclusions is not detailed in the provided data. Typically, such exclusions might be based on specific technical capabilities, security clearances, geographic presence, or prior performance requirements. The impact on the number of bidders and final pricing is complex. On one hand, excluding unqualified sources can ensure that only capable vendors participate, potentially leading to better service quality. On the other hand, if the exclusions are too narrow or arbitrary, they can reduce competition, potentially leading to higher prices than if a truly open competition were held. Without knowing the exact exclusions and the number of bids received, it's difficult to quantify this impact.

What was the contractor's track record with the government prior to and during this contract?

The provided data identifies MULTIMEDIA SERVICES INC as the contractor for this specific award. To assess their track record, one would need to consult historical contract databases (like FPDS) to identify other contracts awarded to this entity, their performance ratings, and any instances of disputes or contract terminations. Without this broader historical context, it's impossible to evaluate their general performance, reliability, or history of cost management. A contractor with a strong history of successful performance and adherence to budgets might suggest the cost increase was due to external factors, while a history of issues could point towards contractor-related problems.

How does the $15.8M award compare to similar satellite telecommunications contracts awarded by the Department of Defense during the 2003-2008 period?

Benchmarking this $15.8 million award requires comparing it against similar satellite telecommunications contracts awarded by the Department of Defense (DoD) within the same timeframe (2003-2008). Key comparison points would include the type of service (e.g., bandwidth, equipment, managed services), the duration of the contract, the geographic coverage, and the specific technical requirements. Contracts with similar scope and duration could serve as benchmarks. If comparable contracts were awarded at significantly lower total values or lower per-unit costs (e.g., per Mbps of bandwidth), it would suggest that this particular award may have been less cost-effective. Conversely, if other similar contracts also show high values, it might indicate prevailing market rates for these specialized services during that period.

What were the primary services delivered under this contract, and how were they utilized by the Department of the Army?

The contract's Product Service Code (PSC) is '517410', which corresponds to 'Satellite Telecommunications'. This broadly indicates that the services procured involved the provision of satellite-based communication capabilities. These could encompass a range of offerings, such as satellite bandwidth for data and voice transmission, satellite terminals and equipment, installation and maintenance services, network management, and potentially secure communication solutions. For the Department of the Army, such services are crucial for maintaining command and control, enabling situational awareness, facilitating logistics, and supporting operations in areas where terrestrial communication infrastructure is unavailable, unreliable, or compromised. The exact utilization would depend on the specific operational needs of the Army units being supported.

Were there any performance issues or contract disputes associated with this award during its five-year period?

The provided data does not contain information regarding performance issues, disputes, or contract modifications beyond the basic award details. To determine if there were any performance problems or disputes, one would need to access more detailed contract administration records, such as performance reports, cure notices, show cause letters, or litigation records. The absence of readily available negative information does not guarantee flawless execution, but it also doesn't provide evidence of significant problems. A comprehensive review of contract close-out documentation or agency contract files would be required to ascertain the presence and nature of any such issues.

Industry Classification

NAICS: Information › Satellite Telecommunications › Satellite Telecommunications

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2911 ELM HILL PIKE, NASHVILLE, TN, 37214

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $600,000

Exercised Options: $600,000

Current Obligation: $15,829,331

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline