DOL awards $23.5M for Satellite Services, Inc. contract spanning over 12 years
Contract Overview
Contract Amount: $23,494,099 ($23.5M)
Contractor: Satellite Services Inc
Awarding Agency: Department of Labor
Start Date: 1997-10-15
End Date: 2009-12-31
Contract Duration: 4,460 days
Daily Burn Rate: $5.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Place of Performance
Location: ONEONTA, OTSEGO County, NEW YORK, 13820
State: New York Government Spending
Plain-Language Summary
Department of Labor obligated $23.5 million to SATELLITE SERVICES INC for work described as: Key points: 1. Contract value of $23.5 million over 12 years indicates significant investment. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed carefully. 4. The long duration of the contract raises questions about adaptability to evolving needs.
Value Assessment
Rating: fair
The contract's Cost Plus Fixed Fee structure, while allowing for flexibility, can be less cost-effective than fixed-price contracts if not rigorously managed. Benchmarking against similar long-term satellite service contracts is difficult without more specific service details.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The use of full and open competition is a positive indicator for price discovery. However, the CPFF structure might mitigate some of the cost savings typically expected from competitive bidding, especially over a long contract term.
Taxpayer Impact: Taxpayer funds are committed for an extended period. While competition was sought, the CPFF structure necessitates careful oversight to ensure value for money.
Public Impact
Long-term commitment of taxpayer funds for essential government services. Potential for cost escalation due to the Cost Plus Fixed Fee contract type. Ensuring continued service delivery and operational continuity for the Department of Labor. The contract's duration raises questions about technological relevance and potential for obsolescence.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee structure
- Long contract duration (12 years)
- Lack of specific service details for benchmarking
Positive Signals
- Full and open competition utilized
- Established vendor relationship over contract term
Sector Analysis
This contract falls within the telecommunications and IT services sector, specifically focusing on satellite communications. Government spending in this area is crucial for maintaining secure and reliable data transmission, but long-term contracts require careful monitoring to ensure they remain cost-effective and technologically relevant.
Small Business Impact
The data provided does not indicate whether small businesses were involved as subcontractors or prime contractors. Further analysis would be needed to determine the extent of small business participation.
Oversight & Accountability
The Cost Plus Fixed Fee structure necessitates robust oversight from the Department of Labor to manage costs effectively and ensure the contractor meets performance requirements throughout the contract's 12-year duration.
Related Government Programs
- Department of Labor Contracting
- Employment and Training Administration Programs
Risk Flags
- Potential for cost overruns due to CPFF structure
- Risk of technological obsolescence over 12 years
- Limited visibility into specific service costs and market comparisons
- Need for strong contract oversight to ensure performance and cost control
Tags
department-of-labor, ny, purchase-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Labor awarded $23.5 million to SATELLITE SERVICES INC. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is SATELLITE SERVICES INC.
Which agency awarded this contract?
Awarding agency: Department of Labor (Employment and Training Administration).
What is the total obligated amount?
The obligated amount is $23.5 million.
What is the period of performance?
Start: 1997-10-15. End: 2009-12-31.
What specific satellite services were procured, and how do their costs compare to current market rates for similar services?
The provided data lacks specifics on the satellite services procured, making a direct cost comparison difficult. However, the Cost Plus Fixed Fee structure suggests that costs were not rigidly fixed upfront. Benchmarking would require detailed service descriptions and analysis of the fixed fee component relative to estimated costs.
What are the primary risks associated with a 12-year Cost Plus Fixed Fee contract for satellite services?
The primary risks include potential cost overruns if the contractor's costs exceed estimates significantly, as the government bears a substantial portion of this risk. Additionally, technological obsolescence is a major concern over such a long period, potentially leading to outdated or inefficient services.
How effectively does this contract ensure value for taxpayer money given its long duration and contract type?
The effectiveness in ensuring value is questionable without more detailed oversight information. While full and open competition was used, the CPFF structure inherently carries higher risk for the government. Rigorous performance monitoring and cost audits are essential to mitigate risks and confirm value.
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Offers Received: 2
Pricing Type: COST PLUS FIXED FEE (U)
Contractor Details
Address: 309 S FRONT ST, MARQUETTE, MI, 49855
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Timeline
Start Date: 1997-10-15
Current End Date: 2009-12-31
Potential End Date: 2009-12-31 00:00:00
Last Modified: 2021-04-30
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