DOT awards $33.6M for telephone apparatus manufacturing, with 3 bidders competing

Contract Overview

Contract Amount: $33,622,982 ($33.6M)

Contractor: Frequentis USA, Inc

Awarding Agency: Department of Transportation

Start Date: 2004-12-14

End Date: 2010-11-29

Contract Duration: 2,176 days

Daily Burn Rate: $15.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IVSR FUNDING FOR NEW CONTRACT

Place of Performance

Location: COLUMBIA, HOWARD County, MARYLAND, 21045

State: Maryland Government Spending

Plain-Language Summary

Department of Transportation obligated $33.6 million to FREQUENTIS USA, INC for work described as: IVSR FUNDING FOR NEW CONTRACT Key points: 1. Contract value appears reasonable given the duration and scope. 2. Full and open competition suggests potential for competitive pricing. 3. Fixed-price contract type mitigates cost overrun risks for the government. 4. Contract duration of over 6 years indicates a long-term need. 5. The award was made to a single contractor, Frequentis USA, Inc. 6. The North American Industry Classification System (NAICS) code 334210 points to a specialized manufacturing sector.

Value Assessment

Rating: good

The contract value of $33.6 million over approximately six years suggests a moderate annual spend. Benchmarking against similar contracts for telephone apparatus manufacturing is challenging without more specific details on the exact nature of the apparatus and its technological sophistication. However, the fixed-price nature of the contract provides a degree of cost certainty for the government, which is a positive indicator of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with three bidders participating. This level of competition is generally considered healthy and suggests that multiple vendors were interested and capable of fulfilling the requirement. The presence of three bidders likely contributed to price discovery and may have resulted in a more favorable price for the government compared to a sole-source or limited competition scenario.

Taxpayer Impact: The full and open competition with multiple bidders indicates that taxpayer dollars were likely used efficiently, as the government had the opportunity to select the most cost-effective solution among qualified offerors.

Public Impact

The Federal Aviation Administration (FAA) is the primary beneficiary, likely utilizing the telephone apparatus for air traffic control or related communication systems. The contract delivers essential communication equipment critical for the functioning of the national airspace system. The geographic impact is likely national, given the FAA's mandate, though the manufacturing itself may be localized. Workforce implications could include jobs in manufacturing, engineering, and quality assurance related to the production of specialized telephone equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for obsolescence of technology over the contract's long duration.
Dependence on a single contractor for a critical communication system.
Limited insight into the specific technological capabilities of the awarded apparatus.

Positive Signals

Awarded under full and open competition, indicating a robust selection process.
Firm fixed-price contract type minimizes financial risk for the government.
The contractor, Frequentis USA, Inc., likely possesses specialized expertise in this niche manufacturing area.

Sector Analysis

The contract falls within the telecommunications equipment manufacturing sector, specifically related to telephone apparatus. This sector is characterized by technological advancements and stringent quality requirements, especially when serving government or critical infrastructure needs. The market size for specialized government communication equipment can be niche but significant, with contracts often awarded based on technical specifications and reliability. This award represents a portion of the government's investment in maintaining and upgrading its communication infrastructure.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, the primary focus was likely on technical capability and price from larger or specialized firms. There is no explicit information on subcontracting plans for small businesses, but given the specialized nature of telephone apparatus manufacturing, it's possible that components or services might be sourced from smaller suppliers.

Oversight & Accountability

Oversight for this contract would typically fall under the Federal Aviation Administration (FAA), a component of the Department of Transportation. The FAA has established procurement regulations and contract management processes to ensure compliance and performance. Accountability measures are inherent in the firm fixed-price contract type, which holds the contractor responsible for delivering the specified goods within the agreed-upon price. Transparency is generally maintained through contract databases, though specific performance details may be internal.

Related Government Programs

Federal Aviation Administration Communications Equipment Procurement
Department of Transportation Information Technology Contracts
Defense Communications Systems Manufacturing
Telecommunications Infrastructure Investment

Risk Flags

Long contract duration may increase risk of technology obsolescence.
Fixed-price contract requires careful monitoring of contractor performance and cost management.
Limited number of bidders (3) could potentially limit price competition compared to a larger pool.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $33.6 million to FREQUENTIS USA, INC. IVSR FUNDING FOR NEW CONTRACT

Who is the contractor on this award?

The obligated recipient is FREQUENTIS USA, INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $33.6 million.

What is the period of performance?

Start: 2004-12-14. End: 2010-11-29.

What is the specific type of telephone apparatus being manufactured, and what are its key functionalities?

The provided data identifies the North American Industry Classification System (NAICS) code as 334210, which pertains to Telephone Apparatus Manufacturing. This broad category can encompass a wide range of products, from basic telephones to complex communication systems used in specialized environments. Without further details, it's difficult to ascertain the exact nature of the apparatus. However, given the awarding agency is the Federal Aviation Administration (FAA), it is highly probable that these are not standard commercial telephones but rather specialized communication devices designed for air traffic control, airport operations, or related aviation communication networks. These could include features like enhanced durability, specific signaling capabilities, integration with existing air traffic management systems, and compliance with stringent aviation safety and performance standards.

How does the awarded price of $33.6 million compare to similar contracts for specialized telephone apparatus?

Benchmarking the $33.6 million award against similar contracts requires access to detailed comparative data on specialized telephone apparatus, which is not readily available in the provided snippet. The contract duration of approximately six years (December 2004 to November 2010) means the average annual value is around $5.6 million. This figure needs to be assessed in the context of the specific technological requirements, production volumes, and the specialized nature of the equipment for aviation. If the apparatus involves advanced features, high reliability, and compliance with strict aviation standards, the price may be considered reasonable. Conversely, if it's a more standard, albeit ruggedized, communication device, the price might warrant closer scrutiny. Further analysis would involve comparing unit costs, feature sets, and contract terms with other FAA or Department of Defense procurements for similar communication hardware.

What are the potential risks associated with a firm fixed-price contract of this duration for manufacturing specialized equipment?

A firm fixed-price (FFP) contract generally shifts the risk of cost overruns to the contractor, which is often beneficial for the government. However, for a contract spanning over six years for specialized manufacturing, there are potential risks. One risk is that the contractor may have underestimated production costs, leading to financial strain or potential quality compromises if they attempt to cut corners to maintain profitability. Conversely, if the contractor significantly overestimated costs, the government might end up paying a premium. Another risk is related to technological obsolescence; if the technology specified in the contract becomes outdated during the contract's long term, the government might receive equipment that is already nearing the end of its useful life or requires costly upgrades. Ensuring robust technical specifications and performance metrics upfront is crucial to mitigate these risks.

What is the track record of Frequentis USA, Inc. in supplying similar communication equipment to the government?

The provided data indicates that Frequentis USA, Inc. is the contractor for this $33.6 million award. To assess their track record, one would need to examine their past performance on government contracts, particularly those involving the manufacturing or supply of communication apparatus for agencies like the FAA or other defense and transportation entities. A review of their contract history, including past performance evaluations, on-time delivery rates, and any instances of disputes or contract modifications, would provide insight into their reliability and capability. Companies specializing in air traffic management and communication systems, like Frequentis, often have a strong reputation within the industry. Verifying their experience with similar, complex communication systems would be key to understanding their suitability for this contract.

How does the competition level (3 bidders) impact the government's ability to secure favorable pricing and innovation?

Having three bidders in a full and open competition generally creates a healthy competitive environment, which is favorable for the government. This level of competition typically drives down prices as bidders strive to offer the most attractive proposals to win the contract. It also encourages innovation, as companies may differentiate their offerings through superior technology, features, or service to gain a competitive edge. With three bidders, the government has a reasonable basis for comparison, reducing the likelihood of awarding a contract at an inflated price. While more bidders could potentially lead to even lower prices, three bidders often represent a good balance between ensuring sufficient competition and managing the proposal evaluation process efficiently. This scenario suggests the government likely achieved a good balance of cost and technical merit.

What are the implications of this contract for the broader telecommunications manufacturing sector?

This contract, awarded under NAICS code 334210, signifies a government investment in specialized telephone apparatus manufacturing. For the telecommunications manufacturing sector, such awards can indicate demand for specific types of equipment, potentially driving research and development in areas relevant to government needs, such as high-reliability communication systems for critical infrastructure. It also provides revenue and workload for the awarded contractor, Frequentis USA, Inc., and potentially its supply chain. The fact that it was competed broadly suggests that the market has multiple capable suppliers, fostering a competitive landscape. However, the niche nature of government contracts means that the direct impact on the entire sector might be limited to specific sub-segments focused on defense, transportation, or public safety communications.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Telephone Apparatus Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Frequentis AG (UEI: 300168861)

Address: 9017 RED BRANCH RD STE 102, COLUMBIA, MD, 03

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

Financial Breakdown

Contract Ceiling: $255,000,000

Exercised Options: $34,228,204

Current Obligation: $33,622,982

Timeline