DoD's $11.5M initial phase for telecommunications resellers awarded to Altech Services, Inc. in Alaska

Contract Overview

Contract Amount: $11,492,192 ($11.5M)

Contractor: Altech Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-06-08

End Date: 2012-07-27

Contract Duration: 1,876 days

Daily Burn Rate: $6.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: INITIAL PHASE IN COSTS AUG-SEP 07

Place of Performance

Location: EIELSON AFB, FAIRBANKS NORTH STAR County, ALASKA, 99702

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $11.5 million to ALTECH SERVICES, INC. for work described as: INITIAL PHASE IN COSTS AUG-SEP 07 Key points: 1. Contract awarded under full and open competition, suggesting a potentially competitive pricing environment. 2. The contract duration of 1876 days (over 5 years) indicates a long-term need for telecommunications services. 3. Awarded to Altech Services, Inc., a review of their past performance and track record is crucial. 4. The North American Industry Classification System (NAICS) code 517310 points to a specific segment within the telecommunications sector. 5. The contract's initial phase costs are provided, but subsequent phases and total contract value require further investigation. 6. Geographic location in Alaska may present unique logistical or operational considerations. 7. The firm-fixed-price contract type shifts cost risk to the contractor.

Value Assessment

Rating: fair

Benchmarking the $11.5 million initial phase cost for telecommunications resellers in Alaska is challenging without more specific service details or comparable contract data. The firm-fixed-price structure suggests that the contractor bears the risk of cost overruns, which can be a positive indicator of value if the price is competitive. However, without data on the scope of services, the number of users, or the specific technologies involved, a definitive assessment of value for money is difficult. Comparing this to other similar telecommunications contracts awarded by the Department of Defense or other agencies for services in remote or challenging environments would provide a more robust benchmark.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which implies that while the competition was open, certain sources were initially excluded before the final award. The presence of 6 bidders suggests a reasonable level of competition. A higher number of bidders generally leads to more competitive pricing and a wider range of solutions. The specific reasons for the initial exclusion of sources would be important to understand the full competitive landscape and its potential impact on price discovery.

Taxpayer Impact: The open competition, despite initial exclusions, likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition award. The presence of multiple bidders indicates that taxpayer funds were not unduly influenced by a lack of market alternatives.

Public Impact

The Department of the Air Force benefits from the provision of telecommunications services, likely supporting its operational readiness and communication infrastructure. The contract delivers essential telecommunications reseller services, which could include voice, data, and internet connectivity. The geographic impact is concentrated in Alaska, potentially supporting military bases or operations in that region. Workforce implications may include jobs for Altech Services, Inc. employees and potentially subcontractors involved in service delivery and maintenance within Alaska.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' clause in the competition type warrants further investigation to ensure it did not unduly limit competition or inflate prices.
The long contract duration (over 5 years) increases the risk of technological obsolescence or changing service needs.
Specific details on the performance metrics and service level agreements are not provided, making it difficult to assess performance outcomes.
The initial phase cost is significant; understanding the total contract value and potential for cost growth is essential.

Positive Signals

Awarded under full and open competition, indicating a competitive bidding process.
The firm-fixed-price contract type transfers cost risk to the contractor.
The contract specifies a clear NAICS code, providing insight into the service sector.
The award to Altech Services, Inc. is a data point for future performance tracking.
The contract duration suggests a stable, long-term requirement, potentially leading to economies of scale.

Sector Analysis

The telecommunications resellers market (NAICS 517310) is a significant sector within the broader information technology and communications industry. This contract falls within the segment of providing communication services and equipment, often acting as intermediaries or value-added resellers. The federal government is a major consumer of telecommunications services, with spending spread across various agencies and for diverse applications, from basic connectivity to advanced network solutions. Comparable spending benchmarks would typically involve analyzing other large-scale telecommunications service contracts awarded to resellers by defense or civilian agencies, considering factors like geographic scope, service complexity, and contract duration.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific small business set-aside analysis to report based on this information. The award to Altech Services, Inc., a presumably larger entity given the contract value, means that opportunities for small businesses would likely arise through subcontracting if Altech chooses to engage them, but this is not a guaranteed outcome or a requirement of the contract as presented.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures would be defined by the contract's terms and conditions, including performance standards, delivery schedules, and payment clauses. Transparency is facilitated by the public availability of contract award data. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Defense Information Technology Contracting Office (DITCO) contracts
General Services Administration (GSA) Federal Supply Schedule (FSS) for telecommunications
Other Department of Defense telecommunications procurements
Alaska-based federal contracts

Risk Flags

Potential for limited competition due to 'exclusion of sources'
Risk of technological obsolescence over the contract's long duration
Uncertainty regarding total contract value beyond the initial phase
Need for detailed performance metrics to assess value
Geographic challenges in Alaska may impact service delivery and cost

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.5 million to ALTECH SERVICES, INC.. INITIAL PHASE IN COSTS AUG-SEP 07

Who is the contractor on this award?

The obligated recipient is ALTECH SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $11.5 million.

What is the period of performance?

Start: 2007-06-08. End: 2012-07-27.

What is the track record of Altech Services, Inc. with federal contracts, particularly in telecommunications?

A thorough review of Altech Services, Inc.'s past performance with federal agencies is essential. This would involve examining their contract history, including any previous awards, their performance ratings (e.g., Contractor Performance Assessment Reporting System - CPARS), and any instances of contract disputes, terminations, or corrective actions. Understanding their experience with similar telecommunications reseller services, especially in challenging environments like Alaska, would provide critical insight into their capability to successfully execute this contract. A positive track record suggests a lower risk of performance issues, while a history of problems could indicate potential challenges ahead.

How does the initial phase cost of $11.5 million compare to similar telecommunications reseller contracts?

Benchmarking the $11.5 million initial phase cost requires access to comparable contract data. Factors such as the duration of this initial phase, the specific services provided (e.g., bandwidth, type of network, equipment), the number of end-users or locations supported, and the geographic region are crucial for a meaningful comparison. Contracts for telecommunications in remote or high-cost-of-living areas like Alaska may naturally command higher prices. Without detailed service descriptions and a broader dataset of similar federal telecommunications contracts, it is difficult to definitively state whether this cost is high, low, or reasonable. Further analysis would involve identifying contracts with similar scope, duration, and location.

What are the primary risks associated with a firm-fixed-price contract of this duration?

The primary risks associated with a firm-fixed-price (FFP) contract of this duration (1876 days, over 5 years) revolve around potential changes in market conditions, technological advancements, and the contractor's ability to maintain profitability. For the government, the risk is that the fixed price may become uncompetitive over time if market rates decrease or if the scope of work needs significant modification, potentially leading to costly change orders. For the contractor, the risk lies in unforeseen cost increases (e.g., labor, equipment, bandwidth) that could erode profit margins. Technological obsolescence is also a significant risk; if the contracted technology becomes outdated, the government may be locked into paying for services that are no longer optimal or efficient.

What are the potential implications of the 'exclusion of sources' clause on price and competition?

The 'exclusion of sources' clause, even within a 'Full and Open Competition' framework, warrants careful scrutiny. It implies that certain potential bidders were not allowed to participate in the solicitation process. The implications depend heavily on the justification for this exclusion. If the exclusion was based on legitimate technical requirements, security clearances, or specific certifications that only a limited number of firms possessed, then the competition might still be considered fair, albeit with fewer participants. However, if the exclusion was arbitrary or improperly justified, it could artificially limit competition, potentially leading to higher prices for the government and taxpayers. Understanding the rationale behind the exclusion is key to assessing its impact on price discovery and overall value.

How does the geographic location in Alaska influence the contract's cost and operational complexity?

The geographic location in Alaska significantly influences both the cost and operational complexity of telecommunications services. Alaska presents unique challenges due to its vast distances, harsh climate, limited infrastructure in remote areas, and higher costs of living and doing business. These factors often translate into increased logistical expenses, higher labor rates, and greater difficulty in deploying and maintaining equipment. Consequently, telecommunications services in Alaska are generally more expensive than in the contiguous United States. This contract's award in Alaska suggests that these factors were likely considered in the pricing and that Altech Services, Inc. possesses the capability to operate effectively in such an environment.

What are the potential benefits and drawbacks of a contract spanning over five years?

A contract spanning over five years offers several potential benefits, including price stability, predictable service delivery, and the potential for economies of scale as the contractor invests in infrastructure and processes for a long-term engagement. It allows the agency to secure services for an extended period, reducing the administrative burden of frequent re-procurement. However, drawbacks include the risk of technological obsolescence, as technology evolves rapidly over five years. There's also the potential for the government to be locked into a contract that may become less competitive over time if market prices fall or if the agency's needs change significantly. Flexibility to adapt to new technologies or requirements can be limited.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications Carriers › Telecommunications Resellers

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA500407R0003

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Intellibridge, LLC (UEI: 805476137)

Address: 1300 S. MERIDIAN SUITE 325, OKLAHOMA CITY, OK, 90

Business Categories: 8(a) Program Participant, Category Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $15,488,442

Exercised Options: $15,233,199

Current Obligation: $11,492,192

Contract Characteristics

Cost or Pricing Data: NO

Timeline