DoD awards $29M for STT SPARES equipment, raising questions about value and competition

Contract Overview

Contract Amount: $29,058,825 ($29.1M)

Contractor: Datapath, Inc.

Awarding Agency: Department of Defense

Start Date: 2010-06-04

End Date: 2014-05-31

Contract Duration: 1,457 days

Daily Burn Rate: $19.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: STT SPARES - NEW DELIVERY ORDER TO PURCHASE EQUIPMENT NECESSARY FOR FIELDING STT SPARES

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 $29.1 million to DATAPATH, INC. for work described as: STT SPARES - NEW DELIVERY ORDER TO PURCHASE EQUIPMENT NECESSARY FOR FIELDING STT SPARES Key points: 1. The contract's value appears high relative to the duration and scope, suggesting potential overpricing. 2. Limited competition dynamics may have contributed to less favorable pricing for the government. 3. The firm-fixed-price contract type offers some cost certainty but doesn't mitigate potential overruns if initial pricing was flawed. 4. Performance context is unclear, making it difficult to assess if the equipment met operational needs effectively. 5. The contract falls within the wireless communications equipment manufacturing sector, a critical area for defense operations. 6. The award was a delivery order, indicating it's part of a larger, potentially ongoing procurement effort.

Value Assessment

Rating: questionable

The total award amount of $29 million over approximately four years for 'STT SPARES - NEW DELIVERY ORDER TO PURCHASE EQUIPMENT NECESSARY FOR FIELDING STT SPARES' suggests a significant per-year expenditure. Without specific details on the equipment procured, it's challenging to benchmark against similar contracts. However, the lack of detailed justification for the cost and the limited competition raise concerns about whether the government achieved optimal value for its investment. The firm-fixed-price nature of the contract implies a set price, but the overall cost could still be considered high if the underlying unit prices or quantities were not aggressively negotiated.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which theoretically allows for the widest possible range of bidders and the best opportunity for price discovery. However, the provided data does not specify the number of bids received or the extent of outreach conducted. A full and open competition is the preferred method, but its effectiveness in achieving competitive pricing depends on market conditions and the clarity of the solicitation. If only a few responsive bids were received, the competitive pressure might have been limited.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it aims to secure the best possible prices through market forces. However, without knowing the number of bids or the final pricing relative to initial estimates, it's difficult to definitively state the taxpayer benefit in this specific instance.

Public Impact

The Department of Defense is the primary beneficiary, receiving equipment essential for fielding STT SPARES. The services delivered involve the procurement of specialized wireless communications equipment. The geographic impact is likely concentrated within military operational areas where STT SPARES are deployed. Workforce implications could include personnel trained to operate and maintain the new equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed justification for the high award amount relative to the contract duration.
Uncertainty regarding the number of bids received under 'full and open competition' limits assessment of true price pressure.
The nature of the 'STT SPARES' is not clearly defined, making it difficult to assess the necessity and value of the procured equipment.
The contract is a delivery order, suggesting it might be part of a larger, less transparent procurement vehicle.

Positive Signals

Awarded under full and open competition, which provides a framework for competitive pricing.
Firm-fixed-price contract type offers cost certainty once the price is established.
The procurement addresses a stated need for fielding STT SPARES, implying operational importance.

Sector Analysis

This contract falls within the Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing sector (NAICS 334220). This sector is crucial for defense, providing the communication infrastructure necessary for command and control, intelligence gathering, and operational coordination. The market size for defense-related communications equipment is substantial, driven by continuous technological advancements and evolving operational requirements. Comparable spending benchmarks are difficult to establish without knowing the specific nature of the 'STT SPARES' equipment, but significant investments are common in this area.

Small Business Impact

The data indicates that small business participation was not a specific set-aside (ss: false, sb: false). This suggests that the procurement was not intentionally structured to favor small businesses. Consequently, the primary contractor, DATAPATH, INC., is likely a larger entity. There is no explicit information on subcontracting plans for small businesses. The impact on the small business ecosystem is therefore likely minimal unless DATAPATH, INC. voluntarily engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. DCMA is responsible for ensuring contractors meet contractual requirements and quality standards. Transparency is limited by the available data; details on performance reviews, audits, or specific oversight activities are not provided. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Communications Systems
Wireless Communication Equipment Procurement
Tactical Communications
Department of Defense IT Spending

Risk Flags

Potential for overpricing due to limited competition or unclear value proposition.
Risk of technology obsolescence if equipment is not cutting-edge.
Lack of detailed performance metrics makes assessing effectiveness difficult.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.1 million to DATAPATH, INC.. STT SPARES - NEW DELIVERY ORDER TO PURCHASE EQUIPMENT NECESSARY FOR FIELDING STT SPARES

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 $29.1 million.

What is the period of performance?

Start: 2010-06-04. End: 2014-05-31.

What specific type of equipment was procured under this delivery order for 'STT SPARES', and what is its intended operational use?

The provided data does not specify the exact nature of the equipment procured under the 'STT SPARES - NEW DELIVERY ORDER TO PURCHASE EQUIPMENT NECESSARY FOR FIELDING STT SPARES'. 'STT SPARES' likely refers to Spare Parts or a specific system designation. The equipment is necessary for 'fielding' these spares, implying it is either components for a larger system or replacement parts for existing operational equipment. Without further details, its specific function, such as tactical radios, satellite communication modules, or network infrastructure components, remains unknown. This lack of specificity hinders a precise assessment of its value and necessity.

How many bids were received for this contract, and how does this number compare to typical competition levels for similar procurements in the wireless communications sector?

The contract was awarded under 'FULL AND OPEN COMPETITION,' which theoretically allows for maximum bidder participation. However, the data does not specify the number of bids received. To assess the level of competition, we would need to know if multiple responsive bids were submitted. If only one or two bids were received, the competition might have been less robust than anticipated, potentially impacting price negotiation. Benchmarking against similar procurements in the wireless communications sector would require access to historical bid data for comparable contracts, which is not provided here. Generally, more bids lead to better price discovery.

What is the historical spending pattern for 'STT SPARES' or similar equipment by the Department of Defense?

The provided data only details a single award of $29,058,825 for 'STT SPARES - NEW DELIVERY ORDER' made on June 4, 2010, with an end date of May 31, 2014. This single data point does not provide sufficient information to establish a historical spending pattern. To understand historical spending, one would need to analyze multiple contracts over several fiscal years related to 'STT SPARES' or functionally equivalent equipment. This would involve searching federal procurement databases for recurring awards, tracking spending trends, and identifying any significant increases or decreases in investment over time.

What is the track record of DATAPATH, INC. as a government contractor, particularly in delivering wireless communications equipment?

DATAPATH, INC. was the contractor awarded this $29 million delivery order. To assess their track record, a comprehensive review of their contract history with the federal government would be necessary. This would involve examining past performance evaluations, on-time delivery rates, quality of goods/services provided, and any history of contract disputes or terminations. Information on their experience specifically with wireless communications equipment and their success in fulfilling similar defense contracts would be crucial. Without access to this detailed performance data, it is difficult to definitively evaluate their reliability and capability for this specific procurement.

How does the cost per year of this contract compare to industry benchmarks for similar wireless communication equipment?

The contract value is $29,058,825 over a period of approximately 1457 days (roughly 4 years). This equates to an average annual expenditure of approximately $7.26 million. However, without knowing the specific type, quantity, and technical specifications of the wireless communication equipment procured, it is impossible to establish a meaningful cost-per-year benchmark against industry standards. The complexity, technological sophistication, and intended use (e.g., tactical vs. strategic) of the equipment heavily influence its price. A direct comparison would require detailed product information and market analysis of comparable commercial or military-grade equipment.

What are the potential risks associated with procuring specialized wireless communication equipment through a delivery order under a potentially older contract vehicle?

Procuring specialized equipment via a delivery order, especially if the underlying contract vehicle is not recent, carries several risks. Firstly, the pricing may not reflect current market rates if the original contract terms were established long ago. Secondly, the technology itself might be outdated by the time of delivery, potentially leading to interoperability issues or reduced effectiveness. Thirdly, if the original competition was limited or the scope was not well-defined, the delivery order might not represent the best value. Finally, the oversight and accountability for the specific equipment delivered under the order might be less rigorous than for a newly competed contract.

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: $95,019,620

Exercised Options: $29,058,825

Current Obligation: $29,058,825

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15P7T06DL215

IDV Type: IDC

Timeline