Inspiritec Inc. awarded $80.3M for DMDC Call Center Services, a sole-source contract

Contract Overview

Contract Amount: $80,347,105 ($80.3M)

Contractor: Inspiritec Inc

Awarding Agency: Department of Defense

Start Date: 2012-11-01

End Date: 2016-03-31

Contract Duration: 1,246 days

Daily Burn Rate: $64.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: DMDC CALL CENTER SERVICES

Place of Performance

Location: SEASIDE, MONTEREY County, CALIFORNIA, 93955

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $80.3 million to INSPIRITEC INC for work described as: DMDC CALL CENTER SERVICES Key points: 1. Contract value of $80.3M over approximately 3.5 years indicates significant investment in call center operations. 2. Sole-source award suggests limited market competition, potentially impacting price negotiation and value for money. 3. The contract's duration and value may present risks related to contractor performance and evolving service needs. 4. Performance context is crucial given the nature of call center services, directly impacting user experience and data handling. 5. Positioned within the administrative support and IT services sector, this contract supports critical defense personnel functions.

Value Assessment

Rating: fair

The total award of $80.3M for DMDC Call Center Services over 1246 days (approx. 3.5 years) averages to roughly $22.9M per year. Without specific benchmarks for similar call center services within the Department of Defense or comparable agencies, it is difficult to definitively assess value for money. The lack of competition (sole-source) further complicates a direct price comparison. However, the sustained funding over several years suggests a consistent need and potentially a stable, albeit unbenchmarked, pricing structure.

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 a specific contractor is deemed the only responsible source capable of meeting the government's needs, often due to unique capabilities, proprietary technology, or urgent requirements. The lack of a competitive bidding process means that price discovery through market forces was limited, and the government did not benefit from multiple offers to drive down costs.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without competing offers, there is a reduced likelihood of securing the most cost-effective solution available in the market.

Public Impact

Service members, veterans, and their families benefit from access to critical information and support through the DMDC call center. The contract delivers essential telecommunications and contact center services, facilitating communication and administrative functions for defense personnel. Services are likely delivered nationwide, supporting the broad geographic reach of the Department of Defense's personnel. The contract supports a workforce involved in customer service, information dissemination, and potentially administrative support roles within the call center environment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially value for money.
Lack of transparency in the justification for sole-source award.
Performance metrics and quality assurance details are not publicly available for assessment.
Contract duration without clear performance reviews could lead to complacency.
Potential for cost overruns if pricing was not rigorously negotiated due to lack of competition.

Positive Signals

Sustained contract award indicates a recognized need for these services by the agency.
The contractor has likely demonstrated capability to fulfill the requirements over a significant period.
Firm Fixed Price contract type provides cost certainty for the government.
Contract supports critical functions for defense personnel and their families.

Sector Analysis

The DMDC Call Center Services contract falls within the broader administrative and support services sector, specifically focusing on contact center operations. This sector is characterized by a high volume of transactions, a need for robust IT infrastructure, and skilled personnel for customer interaction. The market includes numerous providers, ranging from large IT integrators to specialized call center firms. Benchmarking this contract's value is challenging without specific details on service levels and call volumes, but the total award suggests a significant operational scale within the federal government's IT and support services spending.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the contractor, 'INSPIRITEC INC', is not explicitly identified as a small business. There is no information provided regarding subcontracting plans for small businesses. Therefore, this contract is unlikely to have a direct positive impact on the small business ecosystem through set-asides or prime contracting opportunities.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the contracting officer, contract specialists, and potentially program managers within the Defense Human Resources Activity. Accountability measures are usually embedded in the contract's performance work statement, requiring adherence to service levels and quality standards. Transparency is limited by the sole-source nature and the lack of publicly detailed performance reports. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Defense Manpower Data Center (DMDC) Operations
Department of Defense Call Center Support
Federal Contact Center Services
Defense Human Resources IT Support
Telecommunications Services for Government

Risk Flags

Sole-source award
Lack of competition
Potential for unbenchmarked pricing
Limited performance transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $80.3 million to INSPIRITEC INC. DMDC CALL CENTER SERVICES

Who is the contractor on this award?

The obligated recipient is INSPIRITEC INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Human Resources Activity).

What is the total obligated amount?

The obligated amount is $80.3 million.

What is the period of performance?

Start: 2012-11-01. End: 2016-03-31.

What is the specific justification for awarding this contract on a sole-source basis to Inspiritec Inc.?

The provided data indicates the contract was awarded as 'NOT AVAILABLE FOR COMPETITION' (sole-source). A formal justification for this determination would typically be documented by the agency, often citing reasons such as unique capabilities, proprietary technology, lack of adequate competition, or urgent and compelling needs that only a specific contractor can meet. Without access to the agency's justification document (e.g., a Justification and Approval - J&A), the precise reasons remain unknown. This lack of competition means the government did not explore offers from other potential vendors, which could impact cost-effectiveness and innovation.

How does the $80.3M contract value compare to historical spending on DMDC call center services?

The provided data shows a total award of $80.3M for the period of November 1, 2012, to March 31, 2016, spanning approximately 40 months. This equates to an average annual spending of roughly $22.9M ($80.3M / 3.5 years). To compare this to historical spending, one would need data on previous contracts for DMDC call center services. If this contract represents a continuation or expansion of services, historical data would reveal trends in cost, scope, and contractor performance. Without prior contract details, it's impossible to ascertain if this represents an increase, decrease, or stable level of investment in these services.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

The provided data does not include specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for the DMDC Call Center Services contract. Typically, such contracts would define measurable metrics related to call answer times, resolution rates, customer satisfaction scores, data accuracy, and system uptime. These KPIs and SLAs are crucial for evaluating the contractor's performance and ensuring the government receives the expected quality and efficiency of service. The absence of this information in the summary data limits a thorough assessment of the contractor's effectiveness and the overall value delivered.

What is the track record of Inspiritec Inc. in performing similar government contracts?

The data indicates that Inspiritec Inc. was awarded this $80.3M contract for DMDC Call Center Services from November 2012 to March 2016. This suggests they have experience in providing call center and telemarketing services to the federal government, specifically within the defense sector. However, to fully assess their track record, one would need to examine past performance evaluations, any awards or penalties received on this or other contracts, and their history with other government agencies. The duration of this contract implies a level of sustained performance, but without detailed past performance reviews, a comprehensive assessment is not possible.

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

Sole-source contracts, especially those of significant value ($80.3M) and duration (over 3 years), carry inherent risks. Firstly, the lack of competition can lead to higher prices than might be achieved through a competitive process, representing a potential loss of value for taxpayers. Secondly, without the pressure of competing for future work, the incumbent contractor may have less incentive to innovate or maintain peak performance. Thirdly, there's a risk of vendor lock-in, making it difficult and costly to switch providers if performance issues arise or needs change. Finally, the justification for sole-source awards must be robust; if the initial justification was flawed, the contract may not represent the best use of government funds.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Business Support Services › Telemarketing Bureaus and Other Contact Centers

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: H9821013R0002

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Inspiritec, Inc. (UEI: 112952432)

Address: 340 N 12TH ST STE 108, PHILADELPHIA, PA, 19107

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

Financial Breakdown

Contract Ceiling: $82,069,448

Exercised Options: $80,628,734

Current Obligation: $80,347,105

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline