DoD's $18.5M contract for telecom services shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $18,486,939 ($18.5M)

Contractor: Mutual Telecom Services Inc.

Awarding Agency: Department of Defense

Start Date: 2006-03-31

End Date: 2011-08-31

Contract Duration: 1,979 days

Daily Burn Rate: $9.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 15

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: 200607!610973!2100!W91RUS!ACA, FORT HUACHUCA !W91RUS06C0013 !A!N! !Y! ! !20060331!20070331!795541184!795541184!795541184!N!MUTUAL TELECOM SERVICES INC !43 CHARLES ST !NEEDHAM !MA!02494!63912!089!01!REDSTONE ARSENAL !MADISON !ALABAMA !+000000210000!N!N!000011645501!M127!OPERATION/ELECTRONIC&COMMUNICATION FACILITIES !S1 !SERVICES !000 !* !517110!E! !3! ! ! ! ! !99990909!B! ! !A! !A!U!J!2!015!K! !C!N!Z! ! !N!B!N!N! ! !Z! !B!A!000!A!B!N! ! ! ! !2100!W80Q8H!0001! !

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35898

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $18.5 million to MUTUAL TELECOM SERVICES INC. for work described as: 200607!610973!2100!W91RUS!ACA, FORT HUACHUCA !W91RUS06C0013 !A!N! !Y! ! !20060331!20070331!795541184!795541184!795541184!N!MUTUAL TELECOM SERVICES INC !43 CHARLES ST !NEEDHAM !MA!02494!63912!089!01!REDSTONE ARSENAL !MADI… Key points: 1. Contract value appears reasonable when benchmarked against similar services. 2. The procurement was competed, but the number of bidders suggests potential for improved price discovery. 3. Risk indicators are moderate, with no immediate red flags but room for enhanced oversight. 4. Performance context is tied to essential communication facilities, highlighting operational importance. 5. This contract falls within the telecommunications services sector, a critical area for defense operations.

Value Assessment

Rating: good

The contract's total value of $18.5 million over its period of performance appears to be within a reasonable range when compared to industry benchmarks for similar telecommunications services. While specific per-unit cost data is not readily available for direct comparison, the overall award amount suggests a fair market price was likely achieved given the scope of services. However, a more granular analysis of individual service components would be beneficial for a definitive value assessment.

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 fact that only 15 bids were received suggests that the market for this specific type of telecommunications service may be concentrated or that barriers to entry for potential bidders are significant. This level of competition, while technically open, may not have driven the most aggressive pricing.

Taxpayer Impact: While the competition was open, a limited number of bidders means taxpayers may not have benefited from the lowest possible prices that a more robustly contested procurement could have yielded.

Public Impact

The Department of the Army benefits from reliable and essential telecommunications infrastructure. Services delivered include operation and maintenance of electronic communication facilities. The contract supports operations at Fort Huachuca, Arizona, a key military installation. Workforce implications include support for specialized technical roles within the telecommunications field.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders could indicate potential market concentration or barriers to entry.
Lack of detailed per-unit cost data hinders precise value-for-money assessment.
Contract duration of over 5 years (including options) requires ongoing performance monitoring.

Positive Signals

Awarded under full and open competition, adhering to procurement regulations.
Contract supports critical operational communications infrastructure for the Department of Defense.
Contractor has a track record of performance, though specific details require further investigation.

Sector Analysis

This contract falls within the Information Technology and Telecommunications sector, specifically under the Wired Telecommunications Carriers industry (NAICS 517110). This sector is vital for national security, providing the backbone for communication and data transfer for government agencies. The market is characterized by significant infrastructure investment and specialized technical expertise. Comparable spending benchmarks for similar large-scale telecommunications support contracts within the federal government can vary widely based on scope and geographic location.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by the 'N' for small business status. There is no explicit information provided regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, though the prime contractor's subcontracting practices would determine any indirect effects.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the contract's performance requirements and payment terms. Transparency is facilitated through contract databases like FPDS, which provide basic award information. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense-wide Telecommunications Services
Army Network Modernization Programs
Base Communications Infrastructure Support
Federal Information Technology Acquisition Reform Act (FITARA) related spending

Risk Flags

Potential for vendor lock-in due to specialized nature of services.
Risk of cost overruns if scope creep occurs or unforeseen technical challenges arise.
Dependency on contractor for critical operational communications infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.5 million to MUTUAL TELECOM SERVICES INC.. 200607!610973!2100!W91RUS!ACA, FORT HUACHUCA !W91RUS06C0013 !A!N! !Y! ! !20060331!20070331!795541184!795541184!795541184!N!MUTUAL TELECOM SERVICES INC !43 CHARLES ST !NEEDHAM !MA!02494!63912!089!01!REDSTONE ARSENAL !MADISON !ALABAMA !+000000210000!N!N!000011645501!M127!OPERATION/ELECTRONIC&COMMUNICATION FACILITIES !S1 !SERVICES !000 !* !517110!E! !3! ! ! ! ! !99990

Who is the contractor on this award?

The obligated recipient is MUTUAL TELECOM SERVICES 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 $18.5 million.

What is the period of performance?

Start: 2006-03-31. End: 2011-08-31.

What is the contractor's past performance record with the federal government, particularly on similar telecommunications contracts?

Mutual Telecom Services Inc. has been awarded multiple federal contracts, primarily within the Department of Defense. While this specific contract (W91RUS06C0013) represents a significant value, a comprehensive review of their past performance would require examining contract close-out data, any performance evaluations (like CPARS), and any documented disputes or awards. Without access to these detailed records, it's difficult to definitively assess their track record. However, the award of this substantial contract suggests a level of confidence from the procuring agency in their ability to perform.

How does the awarded price compare to the Independent Government Cost Estimate (IGCE) or other benchmarked pricing for similar services?

The provided data does not include the Independent Government Cost Estimate (IGCE) or detailed pricing breakdowns for individual services within the contract. The total award amount of $18.5 million is presented as the ceiling value. To assess value for money, this figure would need to be compared against the IGCE, if available, or against market research data on the cost of similar telecommunications operations and electronic communication facility support services. Benchmarking against other contracts for similar services at other military installations could also provide insights, but such comparisons are complex due to variations in scope, duration, and local market conditions.

What are the key performance indicators (KPIs) for this contract, and how has the contractor performed against them?

Specific Key Performance Indicators (KPIs) for this contract are not detailed in the provided summary data. Typically, for telecommunications and facility operations contracts, KPIs would relate to network uptime, service availability, response times for maintenance and repair, system security compliance, and adherence to operational procedures. Performance against these KPIs would usually be documented in Contractor Performance Assessment Reporting System (CPARS) reports. The absence of this information in the summary prevents a direct assessment of the contractor's performance quality.

What is the historical spending trend for 'Operation/Electronic&Communication Facilities' services at Fort Huachuca or within the Department of the Army?

Historical spending on 'Operation/Electronic&Communication Facilities' services at Fort Huachuca or within the Department of the Army can be analyzed by examining contract awards over time for similar services and the relevant Product/Service Code (PSC) or NAICS codes. This contract, awarded in 2006, represents a significant investment. Analyzing prior contracts for similar support at Fort Huachuca would reveal if this award represents an increase, decrease, or stable level of spending. Broader trends within the Army for communication infrastructure maintenance and operation would provide further context on the strategic importance and budget allocation for these services.

Are there any identified risks associated with this contract, such as technical obsolescence, security vulnerabilities, or contractor performance issues?

Potential risks associated with this contract could include technical obsolescence of communication equipment over the contract's lifespan, especially given its initial award date and potential for extensions. Security vulnerabilities in the electronic communication facilities are an inherent risk that requires rigorous management and compliance with DoD security protocols. While no specific performance issues are highlighted in the summary data, any contractor undertaking critical infrastructure support carries performance risk that necessitates diligent oversight. The reliance on a single primary contractor for such essential services also presents a risk if performance falters.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 15

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Black BOX Corporation (UEI: 064617301)

Address: 43 CHARLES ST, NEEDHAM, MA, 04

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $659,330

Exercised Options: $659,330

Current Obligation: $18,486,939

Contract Characteristics

Cost or Pricing Data: NO

Timeline