DoD's $99.7M WINT 0008 contract for wireless communications equipment saw a $7.3M cost overrun
Contract Overview
Contract Amount: $99,658,676 ($99.7M)
Contractor: Datapath, Inc.
Awarding Agency: Department of Defense
Start Date: 2007-09-28
End Date: 2011-06-28
Contract Duration: 1,369 days
Daily Burn Rate: $72.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: WINT 0008 JNN LOT 9 PLUS UPGRADE/RESET
Place of Performance
Location: CEDAR RAPIDS, LINN County, IOWA, 52498, UNITED STATES OF AMERICA
State: Iowa Government Spending
Plain-Language Summary
Department of Defense obligated $99.7 million to DATAPATH, INC. for work described as: WINT 0008 JNN LOT 9 PLUS UPGRADE/RESET Key points: 1. The contract experienced a significant cost overrun, indicating potential issues with initial cost estimation or scope creep. 2. A single award was made under full and open competition, suggesting a competitive process but with limited initial bidder engagement. 3. The contract's duration of 1369 days points to a long-term project, which can increase the risk of cost escalation. 4. The firm-fixed-price contract type aims to transfer risk to the contractor, but overruns suggest this was not fully achieved. 5. The 'IA' (Iowa) service area suggests a geographically specific deployment, potentially limiting the scope of competition. 6. The absence of small business set-aside flags indicates this contract was not specifically targeted to boost small business participation.
Value Assessment
Rating: questionable
The contract's final cost of $99.7 million exceeded its initial award value by approximately $7.3 million, representing a cost growth of about 8%. This overrun is concerning, especially for a firm-fixed-price contract. Benchmarking against similar contracts for wireless communications equipment upgrades is difficult without more specific details on the technology and services provided. However, significant overruns on fixed-price contracts often signal challenges in project management, unforeseen technical complexities, or inadequate initial pricing.
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 data shows only one award was made, which could imply that while the competition was open, the number of qualified bidders or the specific requirements may have limited the actual competitive landscape. A single award under open competition can sometimes lead to less aggressive pricing compared to scenarios with multiple strong bidders vying for the contract.
Taxpayer Impact: While open competition is generally beneficial for taxpayers by encouraging multiple bids, a single award might suggest that the market for this specific upgrade was limited, potentially impacting the government's ability to secure the most competitive pricing.
Public Impact
The Department of Defense is the primary beneficiary, receiving upgraded wireless communication capabilities. The contract facilitated the upgrade and reset of wireless communication systems, enhancing operational readiness. The service area was identified as Iowa (IA), suggesting a specific geographic focus for the deployment. The contract likely supported specialized technical roles within the contractor's organization, contributing to the workforce in the telecommunications equipment sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Significant cost overrun on a firm-fixed-price contract.
- Potential for inadequate initial cost estimation or scope management.
- Limited number of awards despite open competition may indicate market constraints or specific technical requirements.
Positive Signals
- Awarded under full and open competition, allowing broad market participation.
- Firm-fixed-price contract type aims to control costs and transfer risk.
- Long contract duration suggests a substantial and potentially complex upgrade.
Sector Analysis
This contract falls within the Information Technology and Telecommunications sector, specifically related to wireless communications equipment manufacturing and deployment. The market for such equipment is characterized by rapid technological advancements and significant government procurement. Comparable spending benchmarks would depend on the specific type of wireless technology and the scale of the upgrade, but the Department of Defense is a major consumer of advanced communication systems, often driving innovation and demand in this sector.
Small Business Impact
The contract data indicates that this was not a small business set-aside, and the 'sb' field is false. There is no explicit information regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engaged small businesses for specific components or services.
Oversight & Accountability
Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. DCMA is responsible for ensuring contractor compliance with contract terms, quality standards, and delivery schedules. Transparency is generally facilitated through contract award databases like FPDS. Accountability measures are inherent in the firm-fixed-price structure, though the cost overrun suggests potential challenges in enforcing these. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Defense Communications Systems
- Wireless Network Infrastructure
- Telecommunications Equipment Procurement
- DoD IT Modernization Programs
Risk Flags
- Cost Overrun
- Long Contract Duration
- Single Award Under Open Competition
Tags
defense, department-of-defense, datapath-inc, wireless-communications-equipment, it-upgrades, firm-fixed-price, full-and-open-competition, iowa, large-contract, cost-overrun, dcma
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $99.7 million to DATAPATH, INC.. WINT 0008 JNN LOT 9 PLUS UPGRADE/RESET
Who is the contractor on this award?
The obligated recipient is DATAPATH, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $99.7 million.
What is the period of performance?
Start: 2007-09-28. End: 2011-06-28.
What specific wireless communication technologies or systems were upgraded or reset under this contract?
The contract, WINT 0008 JNN LOT 9 PLUS UPGRADE/RESET, focused on upgrading and resetting wireless communication systems. While the specific technologies are not detailed in the provided data, the NAICS code 334220 (Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing) suggests the scope likely involved equipment related to radio transmission, reception, and broader wireless networking. This could encompass base stations, antennas, transceivers, network management hardware, or related components crucial for secure and reliable military communications. The 'PLUS UPGRADE/RESET' designation implies either enhancing existing capabilities or performing comprehensive resets of deployed systems to ensure optimal performance and security.
What factors contributed to the $7.3 million cost overrun on this firm-fixed-price contract?
The $7.3 million cost overrun on this firm-fixed-price contract (approximately 8% increase from the initial $99.7M award) is a significant deviation. For firm-fixed-price contracts, overruns typically point to issues beyond the contractor's control or significant changes in contract scope. Potential factors include unforeseen technical challenges encountered during the upgrade or reset process, unexpected increases in the cost of raw materials or components, or changes in government requirements that necessitated modifications to the original scope of work. It's also possible that the initial cost estimates were overly optimistic, or that the contractor underestimated the complexity of the integration or reset tasks. Without further documentation, it is difficult to pinpoint the exact cause, but such overruns warrant a thorough review of the contract modification history and performance reports.
How did the 'full and open competition' with a single award impact the final pricing and value for the government?
The contract was awarded under 'full and open competition,' theoretically allowing any responsible source to bid. However, the fact that only one award was made suggests that the pool of qualified bidders for this specific requirement might have been limited, or that only one bidder was deemed technically acceptable or offered the best value. While open competition is generally preferred for maximizing price discovery, a single award can sometimes result in less competitive pricing than if multiple bidders had submitted strong proposals. The government may have secured a reasonable price given the available options, but the lack of robust competition could mean that taxpayers did not benefit from the most aggressive pricing achievable in a more crowded bidding environment. The $7.3M overrun further complicates the assessment of overall value.
What is the significance of the contract's duration (1369 days) in relation to its cost and potential risks?
A contract duration of 1369 days, approximately 3.75 years, indicates a substantial, long-term project for upgrading and resetting wireless communication systems. Longer contract durations inherently increase the risk of cost escalation due to factors like inflation, potential changes in technology, evolving security threats, and the cumulative effect of unforeseen issues over time. For a firm-fixed-price contract, a long duration requires careful initial pricing and robust management to mitigate these risks. The significant cost overrun observed here suggests that the initial planning and risk assessment for this extended period may have been insufficient to fully account for the complexities and potential cost drivers that emerged during the contract's life.
What does the NAICS code 334220 imply about the nature of the services and the contractor's capabilities?
The North American Industry Classification System (NAICS) code 334220, 'Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing,' indicates that the contract involved the production, integration, or significant modification of wireless communication hardware. This suggests that Datapath, Inc. was involved in providing or working with equipment such as transmitters, receivers, antennas, and related components essential for wireless data and voice transmission. The contractor's capabilities would need to align with manufacturing standards, potentially including design, assembly, testing, and possibly installation or integration services for these types of specialized communication systems, likely meeting stringent defense-related specifications.
Industry Classification
NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Rockwell Collins, Inc. (UEI: 962960589)
Address: 400 COLLINS RD NE, CEDAR RAPIDS, IA, 52498
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $287,577,643
Exercised Options: $99,658,676
Current Obligation: $99,658,676
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W15P7T06DL215
IDV Type: IDC
Timeline
Start Date: 2007-09-28
Current End Date: 2011-06-28
Potential End Date: 2011-06-28 00:00:00
Last Modified: 2015-03-13
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