DoD's $12.7M wired telecom contract to STG LLC shows fair value with 68% of benchmark

Contract Overview

Contract Amount: $12,686,017 ($12.7M)

Contractor: STG LLC

Awarding Agency: Department of Defense

Start Date: 2007-06-29

End Date: 2007-12-31

Contract Duration: 185 days

Daily Burn Rate: $68.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 14

Pricing Type: LABOR HOURS

Sector: IT

Official Description: LABOR

Place of Performance

Location: FORT HUACHUCA, COCHISE County, ARIZONA, 85613

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $12.7 million to STG LLC for work described as: LABOR Key points: 1. The contract demonstrates good value for money, with costs coming in significantly below the established benchmark. 2. Competition was robust, indicating a healthy market for these telecommunications services. 3. Risk indicators appear low, suggesting a well-managed and executed contract. 4. Performance context is positive, with the contract awarded under a competitive process. 5. This contract fits within the broader IT and telecommunications sector spending for the Department of Defense.

Value Assessment

Rating: good

The contract's awarded value of $12.7 million is 68% of the benchmark, indicating strong cost-effectiveness. Compared to similar wired telecommunications contracts, this pricing appears favorable. The benchmark itself suggests that the government has a good understanding of fair market value for these services, and STG LLC's bid was well within that expectation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition after exclusion of sources, suggesting a broad solicitation process. While the specific number of bidders is not detailed, the 'full and open' designation implies multiple interested parties were considered. This level of competition is generally conducive to achieving competitive pricing.

Taxpayer Impact: Taxpayers benefit from competitive pricing achieved through a broad solicitation, ensuring that the government is not overpaying for essential telecommunications services.

Public Impact

The Department of Defense benefits from reliable wired telecommunications infrastructure. Services delivered include essential connectivity for military operations and personnel. The geographic impact is focused on Arizona, supporting regional military installations. Workforce implications include employment for telecommunications technicians and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if follow-on contracts are not competitively bid.
Reliance on a single vendor for critical infrastructure could pose a risk if performance falters.

Positive Signals

Awarded under full and open competition, indicating a competitive market.
Costs are significantly below the established benchmark, suggesting good value.
Contract duration is relatively short, allowing for periodic re-evaluation of market needs and vendor performance.

Sector Analysis

This contract falls within the IT and telecommunications sector, specifically focusing on wired telecommunications carriers. The market for these services is mature, with numerous providers. Federal spending in this area is substantial, supporting agency operations nationwide. Comparable spending benchmarks are crucial for ensuring fair pricing, and this contract's performance against its benchmark is a positive indicator.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information on subcontracting plans. As a large contract potentially awarded to a larger entity, the direct impact on the small business ecosystem may be limited unless subcontracting opportunities are actively pursued.

Oversight & Accountability

Oversight would typically be managed by the contracting officer and the Department of the Army's program management office. Accountability measures are inherent in the contract terms and performance requirements. Transparency is facilitated by the public nature of contract awards, though detailed performance metrics may not always be publicly available.

Related Government Programs

General Services Administration (GSA) Federal Supply Schedule contracts for telecommunications.
Department of Defense Enterprise IT initiatives.
Network infrastructure modernization programs.

Risk Flags

Potential for vendor lock-in on follow-on work.
Reliance on a single vendor for critical infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.7 million to STG LLC. LABOR

Who is the contractor on this award?

The obligated recipient is STG 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 $12.7 million.

What is the period of performance?

Start: 2007-06-29. End: 2007-12-31.

What is STG LLC's track record with the Department of Defense?

STG LLC has a history of contracting with the Department of Defense, often providing IT and telecommunications services. Analyzing their past performance on similar contracts, including on-time delivery, quality of service, and adherence to budget, would provide further insight into their reliability. While this specific contract was awarded in 2007, their continued presence in the federal contracting space suggests a generally satisfactory performance history. However, a deeper dive into specific past performance reviews and any documented issues or commendations would be necessary for a comprehensive assessment.

How does the $12.7M value compare to other wired telecommunications contracts of similar scope?

The $12.7 million contract value is considered favorable, especially since it represents only 68% of the established benchmark. This suggests that the pricing is competitive within the market for wired telecommunications services. To provide a more precise comparison, one would need to analyze other contracts awarded around the same period (2007) for similar services (wired telecommunications carriers, NAICS 517110) to agencies of comparable size and scope. However, the significant margin below the benchmark strongly indicates that this contract achieved good value for the government.

What are the primary risks associated with this type of telecommunications contract?

Primary risks include technological obsolescence, as telecommunications technology evolves rapidly. There's also a risk of service disruption due to infrastructure failures or cyber threats, which could impact military operations. Vendor performance issues, such as delays or substandard service quality, are another concern. Furthermore, if the contract is not managed proactively, there's a risk of cost overruns on any potential modifications or extensions, although this contract appears to have been managed well against its benchmark. Ensuring robust security protocols and contingency plans is crucial.

How effective are 'full and open competition' clauses in ensuring competitive pricing for telecommunications services?

Full and open competition clauses are generally highly effective in ensuring competitive pricing for telecommunications services. By allowing any responsible source to submit an offer, these clauses maximize the pool of potential bidders, thereby increasing the likelihood of receiving multiple competitive bids. This dynamic forces contractors to offer their best pricing and most innovative solutions to win the contract. The 'after exclusion of sources' aspect suggests that while the initial solicitation was broad, specific sources might have been excluded based on pre-defined criteria, which could slightly narrow competition but is often done for valid reasons like security or capability.

What is the historical spending trend for wired telecommunications carriers by the Department of Defense?

Historical spending by the Department of Defense on wired telecommunications carriers has been substantial and consistent, reflecting the critical need for reliable communication infrastructure to support global operations. Spending trends often correlate with modernization efforts, base infrastructure upgrades, and the expansion or consolidation of military facilities. While specific year-over-year figures for this NAICS code would require detailed analysis of historical federal procurement data, it's understood that agencies like the DoD are major consumers of these services. Fluctuations can occur due to shifts in technology (e.g., increased reliance on wireless or satellite) and budget allocations.

Industry Classification

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

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

Solicitation ID: W91RUS06R0120

Offers Received: 14

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 11710 PLAZA AMERICA DR STE 1200, RESTON, VA, 20190

Business Categories: Asian Pacific American Owned Business, Category Business, Manufacturer of Goods, Minority Owned Business, Small Business, Subchapter S Corporation

Financial Breakdown

Contract Ceiling: $12,686,017

Exercised Options: $12,686,017

Current Obligation: $12,686,017

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91RUS07D0003

IDV Type: IDC

Timeline