Transportation's $63.6M contract for software solutions awarded to Leader Communications Inc. shows fair value

Contract Overview

Contract Amount: $63,602,839 ($63.6M)

Contractor: Leader Communications Inc.

Awarding Agency: Department of Transportation

Start Date: 2011-03-11

End Date: 2017-10-31

Contract Duration: 2,426 days

Daily Burn Rate: $26.2K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SOFTWARE SOLUTION DELIVERY TAS::69 1301::TAS

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Transportation obligated $63.6 million to LEADER COMMUNICATIONS INC. for work described as: SOFTWARE SOLUTION DELIVERY TAS::69 1301::TAS Key points: 1. The contract's value for money is assessed as fair, considering the duration and fixed-price nature. 2. Competition dynamics indicate a moderately competitive environment, with 3 bidders vying for the award. 3. Risk indicators are low, with the contract status marked as 'OK' and a firm fixed-price structure. 4. Performance context suggests a long-term engagement, spanning over 2400 days. 5. Sector positioning places this contract within facilities support services, a common area for government IT needs.

Value Assessment

Rating: fair

The total value of $63.6 million over approximately 6.7 years suggests a moderate annual spend. Benchmarking against similar large-scale software solution delivery contracts is challenging without more granular data on the specific services provided. However, the firm fixed-price contract type generally offers predictable costs for the government, implying a degree of value assurance. The number of bidders (3) suggests some level of market interest, but not intense competition that might drive prices lower.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was competed under SAP (Simplified Acquisition Procedures), indicating it was likely a full and open competition within the small business acquisition thresholds. Three bidders participated in the competition, suggesting a reasonable level of interest from the market. The presence of multiple bidders generally aids in price discovery and can lead to more competitive pricing for the government.

Taxpayer Impact: The competition level, while not exceptionally high, suggests that taxpayers benefited from a process designed to solicit multiple offers, likely resulting in a more favorable price than a sole-source award.

Public Impact

The Federal Aviation Administration (FAA) is the primary beneficiary, receiving software solutions to support its operations. The contract delivers essential IT services, likely contributing to the efficiency and effectiveness of aviation management. The geographic impact is centered around the agency's operational needs, potentially supporting national aviation infrastructure. Workforce implications are indirect, supporting the government workforce that relies on these software solutions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 6 years) could lead to potential for scope creep or evolving technological needs not fully addressed in the initial award.
Reliance on a single contractor for a significant duration may limit opportunities for adopting newer, potentially more cost-effective solutions.
The 'OK' status, while not a red flag, warrants continued monitoring for any performance degradation over the contract's lifecycle.

Positive Signals

Firm fixed-price contract type provides cost certainty and limits the government's exposure to cost overruns.
The contract was competed, indicating a structured procurement process that likely considered multiple vendor capabilities.
The award was made to a single entity, suggesting a clear selection based on defined criteria.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on software solution delivery and facilities support. The government's spending in this area is substantial, driven by the need to modernize and maintain complex operational systems. Comparable spending benchmarks would typically involve analyzing other large IT service contracts awarded by agencies like the FAA or other transportation-related entities, looking at per-year costs and scope of services.

Small Business Impact

The provided data does not indicate if this contract included a small business set-aside or if Leader Communications Inc. is a small business. Therefore, its direct impact on the small business ecosystem cannot be determined from this information. Subcontracting opportunities for small businesses would depend on the prime contractor's strategy and the nature of the services required.

Oversight & Accountability

Oversight for this contract would typically reside within the Federal Aviation Administration's contracting and program management offices. Accountability measures are inherent in the firm fixed-price structure, which incentivizes the contractor to meet defined deliverables within the agreed budget. Transparency is generally facilitated through contract databases like FPDS, though detailed performance reports are often internal.

Related Government Programs

Federal Aviation Administration IT Modernization Programs
Department of Transportation Software Development Contracts
Government Facilities Support Services
Large Scale IT Solution Procurement

Risk Flags

Long contract duration may increase risk of technological obsolescence.
Potential for evolving requirements not fully captured in initial scope.
Moderate competition level may limit optimal price discovery.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $63.6 million to LEADER COMMUNICATIONS INC.. SOFTWARE SOLUTION DELIVERY TAS::69 1301::TAS

Who is the contractor on this award?

The obligated recipient is LEADER COMMUNICATIONS INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $63.6 million.

What is the period of performance?

Start: 2011-03-11. End: 2017-10-31.

What specific software solutions were delivered under this contract, and how do they align with the FAA's operational requirements?

The provided data categorizes this award under 'SOFTWARE SOLUTION DELIVERY' and 'Facilities Support Services' (NAICS 561210). While specific details on the software are not available, 'Facilities Support Services' typically encompasses a broad range of services including the operation and maintenance of government facilities, which often involves integrated software systems for building management, security, logistics, and potentially IT infrastructure support. For the FAA, these solutions could range from systems managing air traffic control facilities to administrative and operational software supporting airport infrastructure or administrative functions. The alignment with operational requirements would be assessed through the FAA's internal program reviews and performance metrics, which are not publicly detailed in this dataset.

How does the per-year cost of this contract compare to industry benchmarks for similar software solution delivery?

The total contract value is approximately $63.6 million over a duration of about 2426 days (roughly 6.7 years). This equates to an average annual spend of approximately $9.5 million. Benchmarking this figure requires detailed comparison with industry data for similar scope and complexity. Factors such as the specific technologies used, the level of customization, integration requirements, and the contractor's overhead and profit margins significantly influence per-year costs. Without a precise definition of the 'software solutions' and 'facilities support services' provided, a direct comparison is difficult. However, for large-scale, long-term government IT service contracts, an annual spend in the single-digit to low double-digit millions is not uncommon, suggesting this contract falls within a plausible range, though potentially on the higher side depending on the specifics.

What is Leader Communications Inc.'s track record with federal contracts, particularly with the Department of Transportation?

Leader Communications Inc. has been awarded this specific contract by the Department of Transportation's Federal Aviation Administration. To assess their broader track record, a review of federal procurement databases (like FPDS or SAM.gov) would be necessary to identify other contracts awarded to this entity across various agencies and for different types of services. Information regarding past performance, contract values, types of services rendered, and any performance issues or awards would provide a more comprehensive view of their experience and reliability as a federal contractor. Without access to this broader data, it's difficult to definitively characterize their overall track record beyond this single award.

Given the 6.7-year duration, what are the potential risks associated with technological obsolescence or changing requirements?

A contract duration of over six years for software solutions inherently carries risks of technological obsolescence and evolving requirements. Software developed or implemented at the beginning of the contract may become outdated by the end, requiring costly updates or replacements. Changing operational needs within the FAA could also render the delivered solutions less effective or misaligned with current priorities. Mitigation strategies often include contract clauses for modernization, phased rollouts, regular performance reviews, and options for contract modifications or re-competition. The firm fixed-price nature might limit flexibility for incorporating significant changes without formal modifications, potentially increasing costs or delaying necessary upgrades.

How does the number of bidders (3) impact the government's ability to secure competitive pricing for these services?

Having three bidders suggests a moderately competitive environment. While more bidders generally lead to greater price competition, three offers can still provide a reasonable basis for price discovery and negotiation. It indicates that the opportunity was known and that multiple firms possessed the capability and interest to bid. However, it is less competitive than procurements with five or more bidders, where the pressure to offer the lowest price is typically higher. The government's ability to secure competitive pricing also depends on the realism of the solicitation requirements and the evaluation criteria used. A thorough evaluation of technical proposals alongside price is crucial to ensure the best value is obtained, not just the lowest price.

What is the historical spending pattern for similar facilities support services or software solutions within the FAA?

Analyzing historical spending patterns for similar services within the FAA is crucial for context. This $63.6 million contract represents a significant investment over its lifespan. To understand the pattern, one would examine past contracts for facilities support and software solutions awarded by the FAA, noting their values, durations, and the types of services provided. Trends in spending, such as increasing or decreasing investment in these areas, can indicate shifts in agency priorities or technological adoption. Comparing the average annual spend of this contract ($~9.5M) against historical averages for similar FAA procurements would help determine if this award is consistent with past spending, higher, or lower, providing insight into its relative scale and potential value.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6421 S AIR DEPOT BLVD STE A, OKLAHOMA CITY, OK, 73135

Business Categories: Black American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $201,856,995

Exercised Options: $126,453,515

Current Obligation: $63,602,839

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DTFAWA10A00049

IDV Type: BPA

Timeline