Transportation contract for communications equipment manufacturing awarded to Science Applications International Corporation for over $48.8 million

Contract Overview

Contract Amount: $48,810,151 ($48.8M)

Contractor: Science Applications International Corporation

Awarding Agency: Department of Transportation

Start Date: 2007-02-15

End Date: 2012-02-28

Contract Duration: 1,839 days

Daily Burn Rate: $26.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: CLIN#: 0001 CONTRACTING OFFICER: ROBERT VALDES CONTRACT NO. AND NAME: DTFA01-01-C-00021; ASDE-X SPEND PLAN: 07-AJT1100-1001 PERIOD OF PERFORMANCE: 01 OCT 2006 - 30 SEP 2007 NATIONAL PROJECT CODE: 45510102

Place of Performance

Location: WAKEFIELD, MIDDLESEX County, MASSACHUSETTS, 01880

State: Massachusetts Government Spending

Plain-Language Summary

Department of Transportation obligated $48.8 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: CLIN#: 0001 CONTRACTING OFFICER: ROBERT VALDES CONTRACT NO. AND NAME: DTFA01-01-C-00021; ASDE-X SPEND PLAN: 07-AJT1100-1001 PERIOD OF PERFORMANCE: 01 OCT 2006 - 30 SEP 2007 NATIONAL PROJECT CODE: 45510102 Key points: 1. The contract was awarded on a sole-source basis, raising questions about potential price overruns and lack of competitive pressure. 2. Performance period spans over five years, indicating a long-term need for the specified communications equipment. 3. The contract type is Cost Plus Fixed Fee (CPFF), which can incentivize cost overruns if not closely monitored. 4. The National Item Identification Number (NAICS) code 334290 suggests a focus on manufacturing 'Other Communications Equipment'. 5. The contract was awarded by the Federal Aviation Administration (FAA), a key agency within the Department of Transportation. 6. The contract was not competed, suggesting potential limitations in market research or a specific justification for sole-source award.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive data. The Cost Plus Fixed Fee (CPFF) contract type, while allowing for flexibility, can lead to higher costs compared to fixed-price contracts if not managed rigorously. Without details on the specific equipment and its market price, it's difficult to assess if the $48.8 million represents a fair price. The absence of competition suggests that taxpayers may not have received the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when only one vendor can provide the required goods or services, or when there's a specific justification for avoiding competition. The lack of competition limits the government's ability to leverage market forces to achieve the lowest possible price and may indicate a lack of available alternatives or insufficient market research.

Taxpayer Impact: Sole-source awards mean taxpayers may be paying a premium, as there was no competitive pressure to drive down costs. This also limits transparency in pricing and the potential for innovation that could arise from a competitive bidding process.

Public Impact

The Federal Aviation Administration (FAA) is the primary beneficiary, likely receiving critical communications equipment for its operations. The contract supports the manufacturing of 'Other Communications Equipment', essential for maintaining and upgrading air traffic control and communication systems. The geographic impact is primarily within Massachusetts, where the contractor is located, potentially supporting local jobs and the regional economy. The contract implies a need for specialized manufacturing capabilities, potentially impacting the workforce in the communications equipment sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially leads to higher costs for taxpayers.
Cost Plus Fixed Fee contract type can incentivize cost overruns if not managed effectively.
Lack of competition may hinder innovation and the adoption of more cost-effective solutions.
Limited transparency in the procurement process due to the absence of a competitive bidding history.

Positive Signals

The contract addresses a specific need within the Department of Transportation, likely for critical infrastructure.
The long performance period suggests a stable, long-term relationship for essential services.
The contractor, Science Applications International Corporation, is a large entity with experience in government contracts.

Sector Analysis

The contract falls within the 'Other Communications Equipment Manufacturing' sector (NAICS 334290). This sector is crucial for national infrastructure, providing the backbone for telecommunications, broadcasting, and critical government operations like air traffic control. The market for such specialized equipment can be concentrated, sometimes leading to sole-source procurements if unique capabilities are required. Comparable spending in this sector varies widely based on the specific technology and scale of the equipment, but significant government contracts are common for defense and infrastructure needs.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. The large dollar value and sole-source nature suggest it was awarded to a prime contractor capable of fulfilling the requirement directly. There is no explicit information on subcontracting plans for small businesses, which could be a missed opportunity to engage the small business ecosystem in this sector.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Transportation's Inspector General. Given the sole-source award and CPFF structure, rigorous oversight would be crucial to ensure cost control and performance. Transparency is limited by the lack of a competitive process, making it harder for the public to assess value. Accountability would hinge on contract performance metrics and the effectiveness of the contracting officer's monitoring.

Related Government Programs

Department of Transportation IT and Communications Contracts
Federal Aviation Administration Air Traffic Control Systems
Communications Equipment Manufacturing Contracts
Sole-Source Government Procurements

Risk Flags

Sole-source award
Cost-plus contract type
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $48.8 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. CLIN#: 0001 CONTRACTING OFFICER: ROBERT VALDES CONTRACT NO. AND NAME: DTFA01-01-C-00021; ASDE-X SPEND PLAN: 07-AJT1100-1001 PERIOD OF PERFORMANCE: 01 OCT 2006 - 30 SEP 2007 NATIONAL PROJECT CODE: 45510102

Who is the contractor on this award?

The obligated recipient is SCIENCE APPLICATIONS INTERNATIONAL CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $48.8 million.

What is the period of performance?

Start: 2007-02-15. End: 2012-02-28.

What specific communications equipment is being procured under this contract, and what is its intended use within the FAA?

The provided data indicates the contract is for 'Other Communications Equipment Manufacturing' under NAICS code 334290. While the specific equipment is not detailed, it is procured by the Federal Aviation Administration (FAA) within the Department of Transportation. Given the FAA's mission, this equipment likely pertains to air traffic control systems, communication networks for aviation operations, or related infrastructure that ensures the safety and efficiency of air travel. The exact nature of the equipment would require further investigation into the contract's statement of work or CLIN details, which are not fully available in the provided snippet. Understanding the specific application is key to assessing its criticality and the justification for a sole-source award.

What was the justification for awarding this contract on a sole-source basis instead of through full and open competition?

The provided data explicitly states the contract was 'NOT COMPETED' and lists the contract type as 'SOLE-SOURCE'. The specific justification for this sole-source award is not detailed in the snippet. Typically, sole-source procurements are justified under circumstances such as: only one responsible source being available, an urgent and compelling need where competition cannot be obtained, or when the contract is for a specialized service or product uniquely available from a single provider. For the FAA, this could relate to proprietary technology, unique integration requirements with existing systems, or a specific research and development outcome. Without the official justification document (e.g., a Justification and Approval - J&A), it is impossible to definitively state the reason, but it implies a perceived lack of viable alternatives in the market at the time of award.

How does the Cost Plus Fixed Fee (CPFF) contract structure potentially impact cost control and contractor incentives?

The Cost Plus Fixed Fee (CPFF) contract structure involves the government reimbursing the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure can be advantageous when the scope of work is uncertain or subject to change, allowing for flexibility. However, it presents a risk for cost control because the contractor's profit (the fixed fee) does not increase with higher costs. This can reduce the incentive for the contractor to control costs aggressively, as they are guaranteed their fee regardless of the final project cost. Effective oversight by the government is crucial to scrutinize allowable costs and ensure the contractor exercises due diligence in managing expenses to prevent cost overruns.

What is the historical spending pattern for similar communications equipment procurements by the FAA or Department of Transportation?

The provided data snippet focuses on a single contract (DTFA01-01-C-00021) awarded in 2006-2007. To analyze historical spending patterns for similar communications equipment procurements by the FAA or Department of Transportation, a broader dataset encompassing multiple contracts over several fiscal years would be necessary. This would involve identifying contracts with similar NAICS codes (e.g., 334290, or related codes for telecommunications equipment) and Product Service Codes (PSCs). Analyzing trends in contract values, competition levels (competed vs. sole-source), contract types (FFP, CPFF, etc.), and awardees would reveal patterns. Without this broader context, it's impossible to determine if the $48.8 million award represents a typical, high, or low expenditure for such equipment within the agency's history.

What are the potential risks associated with a sole-source award for critical communications equipment?

Sole-source awards for critical communications equipment carry several potential risks. Firstly, the absence of competition can lead to higher prices than might be achieved through a competitive bidding process, resulting in inefficient use of taxpayer funds. Secondly, it limits the government's ability to explore a wider range of technological solutions or innovations that might be offered by other vendors. Thirdly, it can create vendor lock-in, making it difficult and costly to switch providers in the future, even if performance issues arise or better alternatives become available. Finally, a sole-source award can sometimes indicate a lack of robust market research or a failure to identify potential sources, which could point to systemic issues in the procurement planning process.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Other Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 12010 SUNSET HILLS RD, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $2,075,693,529

Exercised Options: $48,810,151

Current Obligation: $48,810,151

Actual Outlays: $127,141

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline