USAC administrative costs exceed $179M for FCC's management consulting services

Contract Overview

Contract Amount: $179,908,660 ($179.9M)

Contractor: Universal Service Administrative Company

Awarding Agency: Federal Communications Commission

Start Date: 2021-12-20

End Date: 2025-12-19

Contract Duration: 1,460 days

Daily Burn Rate: $123.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: USAC ADMINISTRATIVE COSTS

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20005

State: District of Columbia Government Spending

Plain-Language Summary

Federal Communications Commission obligated $179.9 million to UNIVERSAL SERVICE ADMINISTRATIVE COMPANY for work described as: USAC ADMINISTRATIVE COSTS Key points: 1. Contract awarded on a sole-source basis, limiting competitive pricing benefits. 2. Duration of the contract is substantial, spanning four years. 3. The contract type is firm fixed price, offering cost certainty but potentially limiting flexibility. 4. Services fall under Administrative Management and General Management Consulting. 5. The awardee is the Universal Service Administrative Company. 6. No small business set-aside was applied to this contract.

Value Assessment

Rating: questionable

Benchmarking the value for this contract is challenging due to its sole-source nature and the specific administrative functions performed by USAC. The fixed-price structure provides cost predictability for the agency. However, without competitive bids, it's difficult to ascertain if the pricing reflects optimal market value for management consulting services. The contract's value of $179,908,660 over four years suggests a significant investment in administrative support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis to the Universal Service Administrative Company. As such, there was no formal competition or multiple bidders involved in the selection process. This approach bypasses the typical price discovery mechanisms that arise from a competitive bidding environment, potentially leading to higher costs than if multiple vendors had vied for the contract.

Taxpayer Impact: The lack of competition means taxpayers may not be receiving the most cost-effective solution for these administrative services, as there was no pressure from competing bids to drive down prices.

Public Impact

The Universal Service Administrative Company (USAC) benefits directly by receiving funding for its administrative operations. The Federal Communications Commission (FCC) benefits from the provision of essential administrative management and general management consulting services. The primary geographic impact is within the District of Columbia, where the services are managed. Workforce implications are internal to USAC, supporting its operational capacity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the selection process due to sole-source nature.
Long contract duration may reduce agility and opportunities for cost savings through re-competition.

Positive Signals

Firm fixed-price contract provides budget certainty for the agency.
Awardee is a known entity with established administrative functions.
Contract supports essential administrative operations for a critical federal function.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically administrative management and general management consulting. This sector is characterized by a wide range of service providers, from large consulting firms to specialized boutique agencies. The market size for government administrative support services is substantial, with agencies frequently outsourcing these functions. This contract represents a significant portion of spending for administrative support within the Federal Communications Commission, supporting its regulatory and operational mandates.

Small Business Impact

This contract does not include a small business set-aside, nor is there any indication of subcontracting requirements for small businesses. The award to USAC, a specific administrative entity, suggests that the focus was on the entity's function rather than broad market competition where small business participation would be a primary consideration.

Oversight & Accountability

Oversight for this contract would primarily reside with the Federal Communications Commission (FCC) contracting officers and program managers. As a sole-source award, the oversight would focus on performance monitoring and adherence to the contract terms rather than the competitive award process. Transparency is limited due to the non-competitive nature. Inspector General jurisdiction would apply to any potential fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Federal Communications Commission Administrative Support
Management and Consulting Services
Universal Service Fund Administration

Risk Flags

Sole-source award
Lack of competition
High contract value

Frequently Asked Questions

What is this federal contract paying for?

Federal Communications Commission awarded $179.9 million to UNIVERSAL SERVICE ADMINISTRATIVE COMPANY. USAC ADMINISTRATIVE COSTS

Who is the contractor on this award?

The obligated recipient is UNIVERSAL SERVICE ADMINISTRATIVE COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $179.9 million.

What is the period of performance?

Start: 2021-12-20. End: 2025-12-19.

What is the historical spending trend for administrative management and general management consulting services by the Federal Communications Commission?

Analyzing historical spending for the FCC in the 'Administrative Management and General Management Consulting Services' category (NAICS code 541611) reveals a consistent need for such services. While specific figures fluctuate year-to-year based on agency priorities and project needs, the FCC has historically allocated significant funds to external consultants and administrative support entities. This particular contract with USAC represents a substantial portion of that spending for the period it covers. Without access to granular historical data broken down by specific contract vehicles and awardees, a precise trend line is difficult to establish, but the ongoing requirement for these services is evident. The current award's value and duration suggest a long-term commitment to this type of support.

How does the per-contract value of this award compare to other FCC contracts for similar services?

Comparing the per-contract value of this $179.9 million award to other FCC contracts for similar services is challenging without a comprehensive database of all FCC procurements in the 541611 NAICS code. However, given the duration of nearly four years and the sole-source nature, this contract appears to be a significant, long-term engagement. Many consulting contracts are project-based or have shorter durations. A contract of this magnitude, especially when sole-sourced, warrants scrutiny to ensure it represents fair value. Typically, competitive contracts for management consulting services might see a wider range of values, with many smaller, project-specific awards alongside larger, multi-year agreements. The substantial value here suggests a critical, ongoing need that the FCC has addressed through this specific arrangement with USAC.

What are the key performance indicators (KPIs) used to measure the success of the Universal Service Administrative Company under this contract?

The specific Key Performance Indicators (KPIs) for this contract are not publicly detailed in the provided data. However, for administrative management and general management consulting services, typical KPIs would likely revolve around efficiency, accuracy, timeliness of service delivery, adherence to budget, and stakeholder satisfaction. For USAC, this could include metrics related to the effective administration of universal service programs, timely processing of contributions and disbursements, compliance with regulatory requirements, and the overall operational effectiveness of its support functions for the FCC. The firm fixed-price nature of the contract implies that USAC is responsible for meeting these performance standards within the agreed-upon budget.

What is the track record of the Universal Service Administrative Company in performing administrative management and consulting services for the federal government?

The Universal Service Administrative Company (USAC) has a specific and established role in administering programs related to universal telecommunications service in the United States. Its primary function is to collect contributions from telecommunications providers and disburse funds to support eligible services in high-cost areas, to low-income consumers, and for schools and libraries. While its core mission is administrative, it inherently involves significant management and operational consulting functions related to these complex programs. USAC has been operating for many years under the oversight of the FCC, indicating a sustained capability to manage these responsibilities. Its track record is largely defined by its success in fulfilling its statutory obligations related to universal service fund management.

Are there any known risks associated with sole-source contracts of this magnitude for administrative services?

Yes, sole-source contracts of this magnitude carry several known risks. The primary risk is the potential for inflated pricing due to the lack of competitive pressure, meaning taxpayers may pay more than necessary. There's also a reduced incentive for the contractor to innovate or improve efficiency beyond what is contractually required, as they face no direct competition. Furthermore, sole-source awards can raise concerns about fairness and transparency in the procurement process, potentially leading to perceptions of favoritism or missed opportunities to engage a broader range of capable vendors. Agencies must rigorously justify sole-source awards, often citing unique capabilities, urgent needs, or the unavailability of alternatives, to mitigate these risks.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 700 12TH ST STE 900, WASHINGTON, DC, 20005

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

Financial Breakdown

Contract Ceiling: $179,908,660

Exercised Options: $179,908,660

Current Obligation: $179,908,660

Actual Outlays: $174,138,557

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline