DoD's $1.6B OPMAS-E contract to VECTRUS SYSTEMS LLC awarded under full and open competition

Contract Overview

Contract Amount: $162,678,655 ($162.7M)

Contractor: Vectrus Systems LLC

Awarding Agency: Department of Defense

Start Date: 2006-07-31

End Date: 2012-03-31

Contract Duration: 2,070 days

Daily Burn Rate: $78.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: OPMAS-E

Plain-Language Summary

Department of Defense obligated $162.7 million to VECTRUS SYSTEMS LLC for work described as: OPMAS-E Key points: 1. Contract value of $1.6 billion over its lifecycle suggests significant scale and long-term need. 2. Awarded to VECTRUS SYSTEMS LLC, indicating a specific contractor's capability in telecommunications services. 3. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not managed carefully. 4. Duration of 2070 days (approx. 5.7 years) points to a substantial, ongoing requirement. 5. The 'Other Telecommunications' NAICS code suggests a broad range of potential services. 6. No small business set-aside indicates the primary competition was not specifically targeted towards small businesses.

Value Assessment

Rating: fair

Benchmarking the value of this $1.6 billion contract is challenging without specific service details and comparable contract data. However, the Cost Plus Fixed Fee (CPFF) contract type, while allowing for flexibility, carries inherent risks of cost escalation. The fixed fee component provides some cost control, but the government bears the risk of actual costs exceeding estimates. Without more granular data on the services provided and their market rates, a definitive value-for-money assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION,' suggesting that all responsible sources were permitted to submit bids. The presence of 6 bids indicates a competitive environment, which generally benefits price discovery and can lead to more favorable pricing for the government. However, the specific number of bidders does not inherently guarantee the 'best' value without further analysis of the bids received.

Taxpayer Impact: A full and open competition with multiple bidders typically results in better price discovery and potentially lower costs for taxpayers compared to sole-source or limited competition scenarios.

Public Impact

The Department of the Army benefits from telecommunications support services essential for its operations. Services likely include network management, communication infrastructure maintenance, and potentially advanced telecommunications solutions. The geographic impact is likely widespread, supporting Army installations and personnel globally. Workforce implications include employment for VECTRUS SYSTEMS LLC personnel and potentially indirect support roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can incentivize contractor spending and potentially lead to costs exceeding initial estimates.
Lack of specific details on performance metrics makes it difficult to assess the contractor's efficiency and effectiveness.
The broad NAICS code 'Other Telecommunications' could encompass a wide range of services, making it hard to pinpoint specific value or risks without further breakdown.

Positive Signals

Awarded under full and open competition with 6 bidders, suggesting a robust and competitive bidding process.
The contract has a defined end date, providing a clear timeframe for service delivery and future re-competition.
VECTRUS SYSTEMS LLC is an established entity, implying a degree of experience and capability in fulfilling such contracts.

Sector Analysis

The telecommunications sector is a critical enabler for modern military operations, encompassing everything from basic voice and data services to complex network infrastructure and cybersecurity. This contract, falling under NAICS code 517910 (Other Telecommunications), likely covers a broad spectrum of services beyond standard telecommunications, potentially including specialized support for military communication systems. The Department of Defense is a major consumer of telecommunications services, with significant spending across various sectors to maintain global connectivity and operational readiness. Comparable spending benchmarks would typically involve analyzing other large-scale telecommunications support contracts awarded to prime contractors by various government agencies.

Small Business Impact

This contract does not appear to have a small business set-aside, as indicated by 'sb': false. This means the primary competition was not specifically structured to favor small businesses. There is no information provided regarding subcontracting plans or performance related to small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal unless VECTRUS SYSTEMS LLC voluntarily engages small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and administrative contracting officer within the Department of the Army. Performance monitoring, financial audits, and compliance checks are standard oversight mechanisms. Transparency is generally facilitated through contract award databases like FPDS. Inspector General (IG) jurisdiction would apply if specific allegations of fraud, waste, or abuse arise during the contract's performance. The CPFF structure necessitates close financial oversight to manage costs effectively.

Related Government Programs

Defense Communications Services
Telecommunications Infrastructure Support
Information Technology Services for Military
Network Operations and Maintenance Contracts

Risk Flags

Cost Plus Fixed Fee contract type carries inherent risk of cost overruns.
Long contract duration may not keep pace with rapid technological advancements in telecommunications.
Lack of specific performance metrics in provided data hinders detailed value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $162.7 million to VECTRUS SYSTEMS LLC. OPMAS-E

Who is the contractor on this award?

The obligated recipient is VECTRUS SYSTEMS LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $162.7 million.

What is the period of performance?

Start: 2006-07-31. End: 2012-03-31.

What specific telecommunications services are encompassed by NAICS code 517910 under this contract?

NAICS code 517910, 'Other Telecommunications,' is a broad category that includes establishments primarily engaged in providing telecommunications services, except wireless specialty (except satellite) and wired telecommunications carriers. This can encompass a wide array of services such as satellite telecommunications, radio and television broadcasting and wireless communications, and other telecommunications infrastructure and support services. For OPMAS-E, this likely includes the provision, management, and maintenance of complex communication networks, potentially involving satellite communications, tactical communication systems, and related IT infrastructure necessary for Department of the Army operations. The specific details would be outlined in the contract's Statement of Work (SOW), which is not publicly available in this data snippet.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other contract types in terms of risk and potential value for the government?

The Cost Plus Fixed Fee (CPFF) contract type is characterized by the government reimbursing the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or is subject to change, offering flexibility. For the government, the primary risk is cost uncertainty, as the final cost can exceed initial estimates if actual costs are higher than anticipated. However, the fixed fee provides a degree of profit control. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers less cost certainty but greater flexibility. Compared to Cost Plus Incentive Fee (CPIF) or Cost Plus Award Fee (CPAF), CPFF offers a simpler fee structure but lacks the direct incentive mechanisms to control costs or reward exceptional performance that CPIF and CPAF provide. Therefore, effective oversight and robust cost controls are crucial for CPFF contracts to ensure value for the government.

What is VECTRUS SYSTEMS LLC's track record with similar large-scale telecommunications contracts for the Department of Defense?

VECTRUS SYSTEMS LLC has a significant history of performing large-scale contracts, particularly for the Department of Defense, often involving logistics, base operations support, and IT services, which frequently include telecommunications components. While specific details on their track record solely within the 'Other Telecommunications' NAICS code for contracts of this magnitude ($1.6B) require deeper database analysis, their established presence suggests experience in managing complex, high-value government contracts. Their portfolio often includes global support operations, indicating capability in deploying and managing services across diverse and challenging environments. Reviewing past performance evaluations and contract awards for VECTRUS SYSTEMS LLC would provide a clearer picture of their reliability, efficiency, and success in delivering telecommunications-related services.

Given the 6 bidders, what does this suggest about the competitive landscape for 'Other Telecommunications' services for the DoD?

The fact that six bidders submitted proposals for this $1.6 billion contract indicates a healthy level of competition within the market for large-scale telecommunications services supporting the Department of Defense. This suggests that there are multiple capable contractors vying for significant defense contracts in this sector. A competitive landscape generally benefits the government by driving innovation, encouraging competitive pricing, and providing a wider pool of potential solutions. It implies that the barriers to entry for large, established telecommunications and IT service providers are manageable, and that the market is sufficiently robust to support multiple players seeking these types of prime contracts. This level of competition is a positive signal for price discovery and potential value for taxpayer dollars.

What are the potential risks associated with a contract duration of 2070 days (approximately 5.7 years)?

A contract duration of 5.7 years, while providing stability and continuity of services, carries several potential risks. Firstly, technology in the telecommunications sector evolves rapidly; a long-term contract might not adequately adapt to new technological advancements, potentially leading to the use of outdated systems or requiring costly modifications. Secondly, long durations can reduce flexibility for the government to pivot strategies or adopt new solutions if requirements change significantly over time. Thirdly, the longer the contract period, the greater the potential for cost escalation, especially with a CPFF structure, if not rigorously managed. Finally, extended periods without re-competition can sometimes lead to complacency or reduced pressure on the incumbent contractor to maintain peak performance and efficiency, although performance metrics and oversight aim to mitigate this.

Industry Classification

NAICS: Information › Other Telecommunications › Other Telecommunications

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W91RUS05R0105

Offers Received: 6

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: ITT Corporation (UEI: 001216845)

Address: 4410 E FOUNTAIN BLVD, COLORADO SPRINGS, CO, 05

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

Financial Breakdown

Contract Ceiling: $183,158,035

Exercised Options: $162,678,655

Current Obligation: $162,678,655

Contract Characteristics

Cost or Pricing Data: NO

Timeline