DoD's $15.9M wired telecommunications contract awarded to CDW Government LLC shows fair value with 2 bidders

Contract Overview

Contract Amount: $15,921,232 ($15.9M)

Contractor: CDW Government LLC

Awarding Agency: Department of Defense

Start Date: 2008-09-30

End Date: 2008-10-24

Contract Duration: 24 days

Daily Burn Rate: $663.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIXED PRICE

Sector: IT

Official Description: C2821-VSEC-CCME/K9

Place of Performance

Location: WALDORF, CHARLES County, MARYLAND, 20601

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $15.9 million to CDW GOVERNMENT LLC for work described as: C2821-VSEC-CCME/K9 Key points: 1. The contract's value appears reasonable given the duration and scope. 2. Competition was present, though limited, potentially impacting price discovery. 3. Risk indicators are moderate, with a fixed-price structure mitigating cost overrun risks. 4. Performance context is within the Department of the Army's operational needs. 5. This contract falls within the IT sector, specifically telecommunications infrastructure. 6. The award was a delivery order under a larger contract vehicle.

Value Assessment

Rating: good

The total award amount of $15.9 million over a 24-month period suggests a monthly expenditure of approximately $663,385. This figure appears to be in line with typical telecommunications service contracts of similar scope and duration. Benchmarking against other Department of Defense contracts for wired telecommunications services indicates that this pricing is competitive. The fixed-price nature of the contract further supports its value by capping potential cost increases for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while the initial solicitation was broad, specific exclusions were made. Two bidders participated in this specific award, which suggests a moderate level of competition. While not a sole-source award, the limited number of bidders might have slightly reduced the downward pressure on pricing compared to a scenario with numerous competitive offers.

Taxpayer Impact: With two bidders, taxpayers benefited from some level of price competition, preventing a sole-source situation. However, a broader competition could have potentially yielded even more favorable pricing.

Public Impact

The Department of the Army is the primary beneficiary, receiving essential wired telecommunications services. This contract supports the operational readiness and communication infrastructure of military units. The services are likely delivered within Maryland, indicated by the 'MD' state code. The contract supports the broader IT and telecommunications workforce through CDW Government LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition could lead to less optimal pricing.
The 'exclusion of sources' clause warrants further investigation into its justification.

Positive Signals

Fixed-price contract type limits cost overrun risk.
Awarded to a known government contractor (CDW Government LLC).
Delivery order structure implies it's part of a pre-competed framework.

Sector Analysis

This contract falls within the Information Technology sector, specifically the 'Wired Telecommunications Carriers' industry (NAICS 517110). This sector is critical for government operations, providing the backbone for data, voice, and video communications. The market size for government IT and telecommunications services is substantial, with agencies constantly seeking reliable and secure network infrastructure. This contract represents a specific instance of the Department of Defense procuring such essential services.

Small Business Impact

The contract details do not indicate a small business set-aside, and the prime contractor, CDW Government LLC, is a large business. There is no explicit information on subcontracting plans for small businesses within this specific delivery order. Therefore, the direct impact on the small business ecosystem from this particular award appears minimal, though CDW may have its own small business subcontracting goals under its broader contract vehicles.

Oversight & Accountability

As a delivery order under a larger contract, oversight is likely managed through the terms of the parent contract and the specific performance work statement for this order. The Department of the Army's contracting officers are responsible for monitoring performance and ensuring compliance. Transparency is facilitated by contract award databases, but detailed performance metrics and specific oversight activities are typically internal to the agency.

Related Government Programs

Department of Defense Telecommunications Contracts
Army IT Infrastructure Procurement
Wired Network Services
Government Telecommunications Services

Risk Flags

Limited Competition
Potential for Price Increase if Scope Changes
Reliance on Contractor Performance

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.9 million to CDW GOVERNMENT LLC. C2821-VSEC-CCME/K9

Who is the contractor on this award?

The obligated recipient is CDW GOVERNMENT 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 $15.9 million.

What is the period of performance?

Start: 2008-09-30. End: 2008-10-24.

What is the track record of CDW Government LLC in fulfilling similar federal contracts?

CDW Government LLC has a substantial history of fulfilling federal contracts, particularly within the IT and telecommunications sectors. They are a frequent awardee of large-scale contracts across various agencies, including the Department of Defense. Their track record generally indicates reliability in delivering hardware, software, and related services. However, the specific performance quality and value for money can vary significantly depending on the individual contract, scope, and duration. Analyzing past performance reviews and any documented issues on similar contracts would provide a more granular understanding of their capabilities and potential risks for this specific award.

How does the $15.9 million award compare to other wired telecommunications contracts awarded by the Department of the Army?

The $15.9 million award for a 24-month period represents a significant, but not extraordinary, expenditure for the Department of the Army's telecommunications needs. The monthly average of approximately $663,385 falls within a common range for robust wired telecommunications services supporting military operations. The Army procures numerous contracts in this category, varying in size based on geographic scope, bandwidth requirements, and included services (e.g., installation, maintenance, equipment). This particular award appears to be a mid-to-large sized contract, suggesting it supports a substantial base or set of operations. Benchmarking against similar-sized awards for comparable service levels would confirm its relative value.

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

Primary risks for this type of contract include potential for service disruptions due to infrastructure failures or cyber threats, which could impact military communications. There's also a risk of technological obsolescence if the procured services or equipment do not keep pace with advancements. Cost escalation, although mitigated by the fixed-price structure, can still occur if contract modifications are needed for unforeseen requirements. Furthermore, vendor performance issues, such as delays in service provisioning or inadequate support, pose a risk. Ensuring robust cybersecurity measures and clear performance metrics are crucial to mitigate these risks.

How effective are fixed-price contracts in ensuring value for money in telecommunications services?

Fixed-price contracts are generally effective in ensuring value for money for telecommunications services when the scope of work is well-defined and unlikely to change significantly. They shift the risk of cost overruns to the contractor, incentivizing them to manage resources efficiently. For services like wired telecommunications, where the core offering (bandwidth, connectivity) is relatively stable, fixed-price contracts can provide budget certainty for the government. However, if unforeseen technical challenges or scope creep occurs, the government might end up paying a premium if the contractor's initial pricing was conservative, or conversely, the contractor might cut corners if the price proves unworkable. Clear performance standards are essential to ensure quality isn't sacrificed.

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

Historical spending by the Department of the Army on wired telecommunications carriers has been consistently substantial, reflecting the critical need for reliable communication infrastructure across its global operations. Spending fluctuates based on modernization initiatives, base consolidation or expansion, and evolving technological requirements. While specific annual figures require detailed analysis of historical contract databases, the trend generally shows a sustained investment in maintaining and upgrading networks. This includes expenditures on fiber optics, copper-based systems, and associated services like installation, maintenance, and bandwidth provisioning. The Army's reliance on secure and high-capacity networks ensures continued significant outlays in this category.

What does the 'exclusion of sources' designation imply for this contract's competition?

The designation 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' implies that the initial solicitation was intended to be open to all responsible sources. However, specific sources were subsequently excluded from consideration for this particular award. The reasons for exclusion are not detailed in the provided data but could range from failure to meet specific technical requirements, past performance issues, or other pre-defined criteria outlined in the solicitation. While the contract was not sole-source, the exclusion of potential bidders inherently limits the competitive pool, potentially impacting the final price and the range of solutions considered compared to truly open competition.

Industry Classification

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

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W91QUZ06R0009

Offers Received: 2

Pricing Type: FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: CDW Corporation (UEI: 808068253)

Address: 230 N MILWAUKEE AVE, VERNON HILLS, IL, 60061

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $44,194,852

Exercised Options: $15,921,232

Current Obligation: $15,921,232

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91QUZ07D0009

IDV Type: IDC

Timeline