DHS awards $3.36M contract for airline data transmission services to ARINC INCORPORATED

Contract Overview

Contract Amount: $3,365,100 ($3.4M)

Contractor: Arinc Incorporated

Awarding Agency: Department of Homeland Security

Start Date: 2022-04-01

End Date: 2027-03-31

Contract Duration: 1,825 days

Daily Burn Rate: $1.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: SERVICES TO TRANSMIT AIRLINE DATA

Place of Performance

Location: ANNAPOLIS, ANNE ARUNDEL County, MARYLAND, 21401

State: Maryland Government Spending

Plain-Language Summary

Department of Homeland Security obligated $3.4 million to ARINC INCORPORATED for work described as: SERVICES TO TRANSMIT AIRLINE DATA Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Fixed-price contract structure aims to control costs. 3. Long-term duration of 5 years suggests a critical, ongoing need. 4. Services are essential for U.S. Customs and Border Protection operations. 5. Contractor has a history of providing similar services. 6. Geographic focus on Maryland for service delivery.

Value Assessment

Rating: fair

The contract value of $3.36 million over five years for airline data transmission services appears reasonable given the critical nature of the service for CBP. However, without comparable contract data or detailed cost breakdowns, a precise value-for-money assessment is challenging. The firm-fixed-price structure provides cost certainty for the government, but the lack of competition may have led to a higher price than could have been achieved through a competitive process.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning ARINC INCORPORATED was the only vendor considered. This approach bypasses the typical competitive bidding process, which can lead to a wider range of prices and potentially more innovative solutions. The justification for a sole-source award would typically involve unique capabilities or a lack of viable alternatives.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage market competition to secure the best possible pricing for taxpayers. This can result in higher costs compared to what might be achieved through open competition.

Public Impact

Benefits U.S. Customs and Border Protection by ensuring the reliable transmission of critical airline data. Supports national security by facilitating border control and immigration processes. Services are primarily delivered within Maryland. Ensures the continuity of essential government functions related to air travel. Impacts the efficiency of international travel processing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in suboptimal pricing.
Sole-source award raises questions about market availability of alternatives.
Long-term contract duration without competition could lock in potentially inefficient costs.

Positive Signals

Firm-fixed-price contract provides cost certainty.
ARINC INCORPORATED likely possesses specialized knowledge for this critical service.
Contract supports a vital national security function.

Sector Analysis

The IT services sector, specifically 'Other Computer Related Services' (NAICS 541519), encompasses a broad range of IT support and consulting. This contract falls within a niche focused on data transmission for a critical government agency. Comparable spending in this sub-sector can vary widely based on the complexity and scale of data managed. The market for specialized data transmission services for government agencies is often characterized by a few key players with established relationships and security clearances.

Small Business Impact

This contract was not set aside for small businesses, nor does it indicate any subcontracting requirements for small businesses. The sole-source nature of the award further limits opportunities for small business participation. This suggests that the primary contractor, ARINC INCORPORATED, is expected to perform the majority, if not all, of the work, potentially missing opportunities to foster small business growth within this specific service area.

Oversight & Accountability

Oversight for this contract would fall under the Department of Homeland Security and U.S. Customs and Border Protection. As a definitive contract, it is subject to standard federal procurement regulations and oversight. Transparency regarding the justification for the sole-source award and performance metrics would be key areas for oversight. The contract's fixed-price nature simplifies some aspects of financial oversight, focusing on delivery and adherence to scope.

Related Government Programs

Airline Data Systems
Customs and Border Protection IT Services
Federal Data Transmission Contracts
Homeland Security IT Procurement

Risk Flags

Sole-source award limits competition.
Lack of transparency on sole-source justification.
Potential for higher costs due to lack of competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $3.4 million to ARINC INCORPORATED. SERVICES TO TRANSMIT AIRLINE DATA

Who is the contractor on this award?

The obligated recipient is ARINC INCORPORATED.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Customs and Border Protection).

What is the total obligated amount?

The obligated amount is $3.4 million.

What is the period of performance?

Start: 2022-04-01. End: 2027-03-31.

What is ARINC INCORPORATED's track record with similar federal contracts, particularly for data transmission services?

ARINC INCORPORATED has a significant history of providing aviation and transportation-related communication and data services, including to government agencies. Their experience often includes complex, mission-critical systems. For federal contracts, their track record typically involves large-scale data management and transmission solutions, often in secure environments. While specific details on past performance for this exact service with CBP are not provided here, ARINC's general profile suggests a capability to handle such requirements. Past performance evaluations, if available through federal databases like the Contractor Performance Assessment Reporting System (CPARS), would offer more granular insights into their reliability, quality of service, and adherence to schedules and budgets on previous engagements.

How does the $3.36 million contract value compare to similar government contracts for airline data transmission services?

Benchmarking the $3.36 million contract value is challenging without access to a comprehensive database of comparable sole-source or competed contracts for airline data transmission services. However, considering the 5-year duration and the critical nature of supporting U.S. Customs and Border Protection, the annual cost averages around $673,000. This figure needs to be evaluated against the scope, volume of data, security requirements, and service level agreements. If this service were competed, it's possible that multiple bidders could drive the price down. However, given the specialized nature and potential sole-source justification (e.g., unique capabilities or existing infrastructure integration), this price might be within a reasonable range for the specific service provided, though direct comparisons are difficult without more market data.

What are the primary risks associated with this sole-source contract, and how are they mitigated?

The primary risk with this sole-source contract is the potential for inflated pricing due to the lack of competition, which could lead to suboptimal value for taxpayers. Another risk is vendor lock-in, where the government becomes overly reliant on ARINC INCORPORATED's specific technology or services, making future transitions difficult or costly. Mitigation strategies could include rigorous negotiation of contract terms, clear performance metrics, and regular reviews of market alternatives. While not explicitly stated, the government likely conducted market research to justify the sole-source award, ensuring no viable competitive alternatives existed at the time. The firm-fixed-price structure also mitigates cost overrun risks for the government.

How effective is the firm-fixed-price (FFP) contract type in ensuring the delivery of airline data transmission services?

The firm-fixed-price (FFP) contract type is generally effective in ensuring the delivery of well-defined services like airline data transmission, especially when the scope of work is clearly understood and unlikely to change significantly. Under an FFP contract, the contractor, ARINC INCORPORATED, assumes most of the risk and is obligated to complete the work for a predetermined price. This incentivizes the contractor to manage costs efficiently and deliver the services as specified. For the government, FFP provides cost certainty, making budgeting more predictable. The effectiveness hinges on the clarity of the contract's statement of work and performance standards; any ambiguities could lead to disputes or unmet expectations, despite the FFP structure.

What are the historical spending patterns for airline data transmission services by the Department of Homeland Security or CBP?

Historical spending data for airline data transmission services specifically by DHS or CBP is not detailed in the provided information. However, given the continuous need for border security and passenger processing, it is reasonable to assume that spending in this area has been consistent and likely substantial over the years. Contracts for such critical infrastructure services are often long-term and may involve sole-source or limited competition due to specialized requirements and established systems. Analyzing past contract awards, durations, and values within DHS and CBP for similar IT and data services would provide a clearer picture of historical spending trends and the evolution of requirements in this domain.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - NETWORK

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

Parent Company: RTX Corp

Address: 2551 RIVA RD, ANNAPOLIS, MD, 21401

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

Financial Breakdown

Contract Ceiling: $4,281,240

Exercised Options: $3,365,100

Current Obligation: $3,365,100

Actual Outlays: $2,516,099

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline