FCC awards $36M contract for auction system to POWER AUCTIONS LLC, emphasizing business-to-business electronic markets

Contract Overview

Contract Amount: $36,078,780 ($36.1M)

Contractor: Power Auctions LLC

Awarding Agency: Federal Communications Commission

Start Date: 2019-04-04

End Date: 2024-07-31

Contract Duration: 1,945 days

Daily Burn Rate: $18.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: AUCTIONS BIDDING SYSTEM

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20007

State: District of Columbia Government Spending

Plain-Language Summary

Federal Communications Commission obligated $36.1 million to POWER AUCTIONS LLC for work described as: AUCTIONS BIDDING SYSTEM Key points: 1. Contract value of $36M over 5 years suggests a significant investment in auction platform technology. 2. The use of an 'AUCTIONS BIDDING SYSTEM' indicates a focus on efficient and transparent procurement processes. 3. The contractor, POWER AUCTIONS LLC, has secured a substantial award, warranting scrutiny of their performance and capacity. 4. The contract's duration of 1945 days (approx. 5.3 years) allows for long-term system development and support. 5. The 'FIRM FIXED PRICE' contract type aims to control costs and provide budget certainty for the FCC. 6. The absence of small business set-aside flags suggests this contract was not specifically targeted for small business participation.

Value Assessment

Rating: good

The contract value of $36,078,779.87 over approximately 5.3 years represents a significant investment by the Federal Communications Commission (FCC) in its auction platform. Benchmarking this against similar government procurements for complex electronic bidding systems is challenging without more specific service details. However, the firm fixed-price nature of the contract suggests an effort to manage costs effectively. The award to a single entity, POWER AUCTIONS LLC, implies a belief in their capability to deliver the required services at the agreed-upon price.

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 a bid. The data does not specify the number of bidders, but the full and open nature suggests a competitive process was intended. This approach is generally favored to ensure the government receives the best value by allowing a wide range of potential contractors to participate and offer their solutions.

Taxpayer Impact: A full and open competition aims to drive down prices and improve service quality by fostering a competitive environment, ultimately benefiting taxpayers through potentially lower costs and more effective systems.

Public Impact

The primary beneficiary is the Federal Communications Commission, which will utilize the enhanced auction system for its operations. The system is expected to facilitate business-to-business electronic markets, streamlining the auction process for various goods and services. The geographic impact is national, as the FCC operates across the United States. Workforce implications may include the need for specialized IT personnel within the FCC to manage and operate the new system, as well as potential employment opportunities with the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the system becomes highly specialized and difficult to replace.
Reliance on a single contractor for a critical system could pose risks if performance falters or the contractor faces financial instability.
Ensuring the system's security and data integrity will be paramount given the sensitive nature of auction data.

Positive Signals

The firm fixed-price contract provides cost certainty for the FCC, mitigating budget overruns.
Full and open competition, in principle, should lead to a more robust and cost-effective solution.
The long contract duration allows for system maturity and potential for ongoing improvements and support.

Sector Analysis

The contract falls within the Information Technology (IT) sector, specifically focusing on specialized software and systems for conducting auctions. The market for such business-to-business electronic marketplaces is dynamic, with various companies offering solutions for procurement and bidding. The FCC's spending on this system is a significant allocation within its IT budget, aimed at modernizing and improving its operational efficiency for spectrum auctions and other bidding processes. Comparable spending benchmarks would depend on the complexity and scale of the auction functionalities required.

Small Business Impact

The data indicates that this contract was not awarded as a small business set-aside (ss: false, sb: false). This means that the competition was open to all eligible businesses, regardless of size. Consequently, there are no direct subcontracting requirements mandated by a small business set-aside. The impact on the small business ecosystem is neutral in terms of direct set-aside benefits, though small businesses may have participated as subcontractors to the prime contractor, POWER AUCTIONS LLC, if such arrangements were made.

Oversight & Accountability

Oversight for this contract would primarily reside with the Federal Communications Commission's contracting officers and program managers. Accountability measures are embedded within the firm fixed-price contract terms, which stipulate deliverables and performance standards. Transparency is generally enhanced through the Federal Procurement Data System (FPDS), where contract awards are reported. While specific Inspector General (IG) jurisdiction for this particular contract isn't detailed, the FCC's Office of Inspector General typically oversees agency spending and program performance to ensure efficiency and prevent fraud.

Related Government Programs

Federal IT Procurement
Electronic Auction Systems
Business-to-Business Marketplaces
FCC Procurement
Government IT Services

Risk Flags

Potential for vendor lock-in
Reliance on single contractor
System security and data integrity
Performance monitoring challenges
Contractor financial stability

Frequently Asked Questions

What is this federal contract paying for?

Federal Communications Commission awarded $36.1 million to POWER AUCTIONS LLC. AUCTIONS BIDDING SYSTEM

Who is the contractor on this award?

The obligated recipient is POWER AUCTIONS LLC.

Which agency awarded this contract?

Awarding agency: Federal Communications Commission (Federal Communications Commission).

What is the total obligated amount?

The obligated amount is $36.1 million.

What is the period of performance?

Start: 2019-04-04. End: 2024-07-31.

What is the track record of POWER AUCTIONS LLC in delivering similar large-scale electronic auction systems for federal agencies?

Information regarding the specific track record of POWER AUCTIONS LLC in delivering large-scale electronic auction systems for federal agencies is not directly provided in the abbreviated data. To assess their capabilities, a deeper dive into their past performance on similar contracts, client testimonials, and any documented successes or failures would be necessary. This would involve searching contract databases for previous awards to POWER AUCTIONS LLC, reviewing performance evaluations (if publicly available), and understanding the complexity and scale of systems they have previously managed. A lack of extensive federal experience could represent a risk factor, while a proven history would increase confidence in their ability to meet the FCC's requirements.

How does the awarded amount of $36M compare to the estimated market value for similar auction system procurements?

Determining the precise market value for a system like the one procured by the FCC is complex without detailed specifications of the required functionalities. However, $36 million over approximately 5.3 years ($6.8 million annually) for a specialized, robust electronic auction platform suggests a significant investment. Benchmarking requires comparing this to procurements of similar scope, complexity, and duration by other federal agencies or large private sector organizations. Factors such as the number of users, transaction volume, security requirements, and integration needs heavily influence market pricing. If comparable systems have been procured for substantially less, it could indicate potential overpricing or a lack of competitive pressure in this specific award.

What are the key performance indicators (KPIs) that will be used to measure the success of this contract?

The provided data does not explicitly list the Key Performance Indicators (KPIs) for this contract. However, for an 'AUCTIONS BIDDING SYSTEM' with a 'FIRM FIXED PRICE' contract, typical KPIs would likely focus on system uptime and availability, transaction processing speed and accuracy, user satisfaction (both internal FCC users and external bidders), security compliance, and adherence to project milestones and deadlines. The FCC's program managers would be responsible for defining and monitoring these KPIs throughout the contract's lifecycle to ensure POWER AUCTIONS LLC is meeting its obligations and delivering the expected value. Regular performance reviews would assess performance against these metrics.

What is the potential risk associated with the sole awardee, POWER AUCTIONS LLC, for such a critical system?

Awarding a critical system like an auction platform to a single entity, even after a full and open competition, carries inherent risks. These include potential vendor lock-in, where the FCC becomes heavily reliant on POWER AUCTIONS LLC's proprietary technology, making future transitions costly and difficult. There's also the risk of performance degradation if the contractor faces financial difficulties, staffing issues, or a decline in technical expertise. Furthermore, a single point of failure could arise if the contractor is unable to deliver or maintain the system as expected, potentially disrupting crucial FCC operations. Robust contract management, clear performance expectations, and contingency planning are essential to mitigate these risks.

How has the FCC's spending on auction technology evolved over the past five years, and does this contract represent a significant shift?

Historical spending data for the FCC's auction technology is not provided in the abbreviated dataset. To understand the evolution of their spending and whether this $36M contract represents a significant shift, one would need to analyze past procurement records for similar systems. This would involve looking at the number, value, and duration of previous contracts related to auction platforms. If previous investments were smaller or less frequent, this contract could indicate a strategic decision to upgrade or expand their auction capabilities significantly. Conversely, if the FCC regularly invests in such systems, this award might represent a standard refresh or upgrade cycle.

What are the implications of the 'Business to Business Electronic Markets' designation for the system's functionality and user base?

The designation 'Business to Business Electronic Markets' implies that the auction system is designed primarily for transactions between businesses, rather than between businesses and consumers, or between government entities. This suggests the system will likely incorporate features tailored for commercial entities, such as complex bidding rules, integration with business accounting systems, and robust security protocols to handle sensitive business data. The user base would primarily consist of companies participating in FCC auctions (e.g., for spectrum licenses), and FCC staff managing these auctions. The system's design will need to facilitate efficient, secure, and compliant B2B interactions within the auction framework.

Industry Classification

NAICS: Wholesale Trade › Wholesale Trade Agents and Brokers › Business to Business Electronic Markets

Product/Service Code: RESEARCH AND DEVELOPMENT › ECONOMIC GROWTH/PRODUCTIVITY R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3333 K ST NW STE 425, WASHINGTON, DC, 20007

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $40,774,521

Exercised Options: $37,895,179

Current Obligation: $36,078,780

Actual Outlays: $32,599,833

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline