DoD's $33.6M Video Teleconferencing Contract Awarded to Microtechnologies LLC Under Sole-Source Basis

Contract Overview

Contract Amount: $33,636,416 ($33.6M)

Contractor: Microtechnologies LLC

Awarding Agency: Department of Defense

Start Date: 2007-11-27

End Date: 2012-11-30

Contract Duration: 1,830 days

Daily Burn Rate: $18.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: VIDEO TELECONFERENCING (VTC)

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35801

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $33.6 million to MICROTECHNOLOGIES LLC for work described as: VIDEO TELECONFERENCING (VTC) Key points: 1. Contract awarded on a sole-source basis, limiting competitive price discovery. 2. Significant duration of 1830 days suggests long-term service needs. 3. Awarded as a Cost Plus Fixed Fee (CPFF) type, which can incentivize cost overruns. 4. The contract's value is substantial, requiring careful oversight for value for money. 5. Missile Defense Agency is the primary recipient of these VTC services. 6. Geographic location of performance is Alabama.

Value Assessment

Rating: fair

Benchmarking the value of this $33.6 million contract is challenging without detailed service delivery metrics and comparable sole-source awards. The CPFF pricing structure, while common for complex services, carries inherent risks of cost escalation. The absence of competition means there's no direct market comparison to assess if the fixed fee was optimal or if alternative providers could offer similar services at a lower cost. The long duration (5 years) suggests a consistent need, but the lack of competitive bidding raises questions about whether the government secured the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning Microtechnologies LLC was the only vendor considered. The justification for this approach is not provided in the data, but it typically arises when only one vendor possesses the unique capabilities or proprietary technology required. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices through market forces.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without multiple offers, there is less assurance that the negotiated price reflects the lowest possible cost for the required services.

Public Impact

The Missile Defense Agency benefits from enhanced communication capabilities through video teleconferencing. This contract supports critical operational and administrative functions within the DoD. Services are primarily delivered within Alabama, potentially impacting the local workforce and economy. Ensures continuity of operations and collaboration for defense personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Cost Plus Fixed Fee contract type can lead to cost overruns.
Long contract duration without re-competition raises value-for-money concerns.

Positive Signals

Contract supports critical Missile Defense Agency operations.
Established service delivery over a significant period (2007-2012).

Sector Analysis

The Video Teleconferencing (VTC) market is a segment within the broader IT and business support services sector. This contract falls under 'All Other Business Support Services,' indicating a broad category that can encompass various specialized support functions. The VTC market is characterized by rapid technological advancements and a mix of large, established providers and niche players. Government spending in this area is driven by the need for secure, reliable, and high-quality communication solutions for remote collaboration and operational command.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by `ss` being false. Furthermore, there is no explicit information regarding subcontracting plans for small businesses. The award to a single entity, Microtechnologies LLC, without specific small business considerations, suggests that the primary focus was on fulfilling the agency's specific VTC needs rather than fostering small business participation through this particular award.

Oversight & Accountability

Oversight for this contract would typically fall under the Missile Defense Agency's contracting and program management offices. As a definitive contract awarded by the Department of Defense, it would also be subject to internal DoD oversight mechanisms and potentially audits by the Defense Contract Audit Agency (DCAA). Transparency regarding the specific justification for the sole-source award and detailed performance metrics would be key to assessing accountability. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Communication Services
IT Support Services
Video Conferencing Solutions
Missile Defense Agency Contracts
Business Support Services

Risk Flags

Sole-source award may indicate limited market availability or competition.
CPFF contract type carries inherent risk of cost escalation.
Lack of detailed performance metrics in summary data hinders value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.6 million to MICROTECHNOLOGIES LLC. VIDEO TELECONFERENCING (VTC)

Who is the contractor on this award?

The obligated recipient is MICROTECHNOLOGIES LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Missile Defense Agency).

What is the total obligated amount?

The obligated amount is $33.6 million.

What is the period of performance?

Start: 2007-11-27. End: 2012-11-30.

What was the specific justification for awarding this Video Teleconferencing contract on a sole-source basis to Microtechnologies LLC?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are awarded when only one responsible source is available or capable of meeting the agency's requirements. This could be due to unique capabilities, proprietary technology, or a lack of adequate competition. For this contract, the Missile Defense Agency would have had to document why other vendors could not fulfill the need for video teleconferencing services. Without this documentation, it is difficult to fully assess the necessity of the sole-source approach and its potential impact on cost.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for similar VTC services, and what are the associated risks?

Cost Plus Fixed Fee (CPFF) contracts reimburse the contractor for allowable costs and pay a fixed fee, which is intended to represent profit. This structure is often used when the scope of work is not clearly defined or when there is significant uncertainty. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility but shifts more cost risk to the government. The primary risk is that the contractor may have less incentive to control costs, as the government bears the majority of the cost burden. This can lead to higher overall expenditures than anticipated if not managed diligently through robust oversight and performance monitoring.

What was the historical spending trend for Video Teleconferencing services by the Missile Defense Agency prior to and during this contract period?

The provided data focuses on a single contract award from 2007 to 2012. It does not offer historical spending trends for VTC services by the Missile Defense Agency (MDA) either before or during this period. To analyze historical spending, one would need access to MDA's procurement data across multiple fiscal years, identifying all contracts related to VTC and similar communication services. This would allow for an assessment of whether spending on VTC has increased, decreased, or remained stable, and how this specific $33.6 million contract fits into the broader spending picture for MDA's communication infrastructure.

What performance metrics or key performance indicators (KPIs) were established for Microtechnologies LLC under this contract to ensure service quality?

The provided data does not specify the performance metrics or Key Performance Indicators (KPIs) that were established for Microtechnologies LLC under this contract. In a Cost Plus Fixed Fee contract, especially one awarded sole-source, defining and monitoring clear performance standards is crucial for ensuring value and accountability. Typical KPIs for VTC services might include uptime percentages, call quality (e.g., resolution, latency), user satisfaction ratings, and response times for technical support. Without insight into these metrics, it's challenging to objectively evaluate the contractor's performance and the overall effectiveness of the VTC services provided.

Were there any challenges or disputes encountered during the performance of this contract, and how were they resolved?

The available data does not contain information regarding any challenges or disputes that may have arisen during the performance of this contract between November 2007 and November 2012. Contract performance issues, such as delays, quality deficiencies, or disagreements over contract terms, are typically documented in contract administration records, performance reviews, or legal filings. Without access to these records, it is impossible to determine if any such issues occurred or how they were resolved. This lack of information limits a comprehensive assessment of the contractor's track record and the overall success of the contract.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Business Support Services › All Other Business Support Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 8330 BOONE BLVD STE 600, VIENNA, VA, 22182

Business Categories: 8(a) Program Participant, Category Business, Hispanic American Owned Business, Limited Liability Corporation, Minority Owned Business, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Small Disadvantaged Business, Special Designations, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $38,571,265

Exercised Options: $38,571,265

Current Obligation: $33,636,416

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline