ARINC INCORPORATED awarded $182.5M for Aeronautical Mobile Communications Services by FAA

Contract Overview

Contract Amount: $182,498,346 ($182.5M)

Contractor: Arinc Incorporated

Awarding Agency: Department of Transportation

Start Date: 2010-09-15

End Date: 2016-09-14

Contract Duration: 2,191 days

Daily Burn Rate: $83.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PROVIDING AERONAUTICAL MOBILE COMMUNICATIONS SERVICES

Place of Performance

Location: ANNAPOLIS, ANNE ARUNDEL County, MARYLAND, 21401

State: Maryland Government Spending

Plain-Language Summary

Department of Transportation obligated $182.5 million to ARINC INCORPORATED for work described as: PROVIDING AERONAUTICAL MOBILE COMMUNICATIONS SERVICES Key points: 1. Contract awarded on a firm-fixed-price basis, indicating predictable costs for the government. 2. The contract was not competed, raising questions about potential price efficiencies. 3. A single award suggests limited market engagement or specific contractor capabilities. 4. The duration of the contract (2191 days) implies a long-term need for these services. 5. Services are categorized under 'All Other Telecommunications', a broad classification. 6. The contract value is substantial, requiring careful oversight of performance and cost.

Value Assessment

Rating: fair

Without a competitive bidding process, it is difficult to benchmark the value for money. The firm-fixed-price structure provides cost certainty, but the absence of competition means potential savings from market dynamics were likely foregone. Further analysis would require comparing the per-unit cost of services to industry benchmarks or similar government contracts for aeronautical mobile communications.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as 'NOT COMPETED', indicating a sole-source or limited competition procurement. This approach is typically used when only one source can provide the required goods or services, or in specific emergency situations. The lack of multiple bidders means the government did not benefit from a range of proposals and pricing strategies, potentially leading to higher costs than if the contract had been competed.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to drive down prices. The government's ability to negotiate favorable terms is also diminished in a sole-source scenario.

Public Impact

Aeronautical mobile communications services are critical for air traffic management and safety. The Federal Aviation Administration (FAA) is the primary beneficiary, utilizing these services for operational needs. The services likely support a wide range of aviation stakeholders, including airlines and pilots. The geographic impact is national, supporting air operations across the United States. Workforce implications are tied to the operation and maintenance of these communication systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Potential for vendor lock-in due to specialized services.
Performance monitoring is crucial to ensure service quality without competitive pressure.

Positive Signals

Firm-fixed-price contract provides cost predictability.
Long-term contract suggests a stable and reliable service provider.
Services are essential for critical aviation infrastructure.

Sector Analysis

The telecommunications sector is vast, encompassing a wide range of services. Aeronautical mobile communications represent a specialized niche within this sector, crucial for the safety and efficiency of air travel. The market for such specialized services may be limited, potentially justifying sole-source awards in some instances. However, the overall market size for telecommunications services is in the hundreds of billions of dollars annually.

Small Business Impact

Information regarding small business participation, including set-asides or subcontracting plans, is not provided in the data. Given the nature of specialized telecommunications services and the sole-source award, it is possible that small businesses were not directly involved as prime contractors. Further investigation would be needed to determine if any subcontracting opportunities were extended to small businesses.

Oversight & Accountability

Oversight of this contract would fall under the Federal Aviation Administration's contracting and program management offices. As a sole-source award, scrutiny on performance metrics and adherence to contract terms is paramount. Transparency would be enhanced by public reporting of performance reviews and any contract modifications. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Air Traffic Control Communications
Aviation Safety Systems
Telecommunications Infrastructure

Risk Flags

Sole-source award lacks competitive pricing.
Potential for cost overruns without competitive pressure.
Need for stringent performance monitoring.
Limited transparency in procurement process.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $182.5 million to ARINC INCORPORATED. PROVIDING AERONAUTICAL MOBILE COMMUNICATIONS SERVICES

Who is the contractor on this award?

The obligated recipient is ARINC INCORPORATED.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $182.5 million.

What is the period of performance?

Start: 2010-09-15. End: 2016-09-14.

What is the specific nature of the 'Aeronautical Mobile Communications Services' provided under this contract?

The contract data indicates the service is 'PROVIDING AERONAUTICAL MOBILE COMMUNICATIONS SERVICES'. This generally refers to the systems and infrastructure that enable voice and data communication between aircraft and ground stations, as well as between aircraft themselves, while in flight. These services are fundamental to air traffic control, flight operations management, and ensuring aviation safety. They can include technologies like VHF radio, satellite communications, and data links used for transmitting flight plans, weather updates, and other critical information. The specific technical details and scope would be elaborated in the contract's statement of work.

Why was this contract awarded on a sole-source basis instead of being competed?

The provided data states the contract type was 'NOT COMPETED', indicating a sole-source award. Common justifications for sole-source procurements include situations where only one responsible source can provide the required supplies or services, urgent and compelling needs that preclude competition, or when the services are of a highly specialized nature that only a particular contractor can fulfill. Without further documentation from the agency (e.g., Justification for Other Than Full and Open Competition - JOFOC), the precise reason remains unknown. However, such awards warrant scrutiny to ensure they are indeed necessary and that the government is not overpaying due to lack of competition.

How does the $182.5 million contract value compare to similar telecommunications contracts awarded by the FAA or other agencies?

Benchmarking this $182.5 million contract requires comparing it to similar 'Aeronautical Mobile Communications Services' or broader 'Telecommunications' contracts within the federal government, particularly those awarded by aviation-focused agencies like the FAA. The contract's value is substantial, suggesting a significant scope of services or a long duration. A comprehensive comparison would involve analyzing the average contract values, contract types (competitive vs. sole-source), and performance periods for similar services. Given this was a sole-source award, its value might be higher than a competitively procured contract for equivalent services. Further research into the contract's specific deliverables and the market rates for such specialized services would be necessary for a robust comparison.

What are the potential risks associated with a sole-source contract of this magnitude?

Sole-source contracts, especially those of significant value like $182.5 million, carry inherent risks. The primary risk is the potential for inflated pricing, as there is no competitive pressure to ensure the government receives the best possible value. Another risk is vendor lock-in, where the government becomes heavily reliant on a single provider, making it difficult and costly to switch vendors in the future. Performance risk is also present; without the threat of losing future business to competitors, the contractor might be less motivated to maintain high service standards. Robust contract oversight, clear performance metrics, and regular reviews are crucial to mitigate these risks.

What is ARINC INCORPORATED's track record with the federal government, particularly with the FAA?

ARINC INCORPORATED (now part of Collins Aerospace) has a long history of providing aviation communication, navigation, and surveillance systems and services to the FAA and other government entities. Their expertise in this specialized field is well-established. Analyzing their broader federal contract history, including past performance evaluations, any contract disputes, and the types of services they have provided, would offer further insight into their reliability and capability. A review of their performance on this specific $182.5 million contract would be essential to assess their current track record.

What is the historical spending trend for Aeronautical Mobile Communications Services by the FAA?

To assess historical spending trends, one would need to examine the FAA's procurement data over several fiscal years, specifically looking for contracts related to 'Aeronautical Mobile Communications Services' or similar categories. This analysis would reveal whether spending in this area has been consistent, increasing, or decreasing. It would also highlight whether these services have predominantly been procured through competitive or sole-source means. Understanding these trends provides context for the $182.5 million award, indicating if it represents a typical investment or a significant deviation.

Industry Classification

NAICS: Information › Other Telecommunications › All Other Telecommunications

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

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: Rockwell Collins, Inc. (UEI: 962960589)

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: $297,934,946

Exercised Options: $182,498,346

Current Obligation: $182,498,346

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline