DoD's $62.8M contract for specialized telecom systems support awarded to SMARTRONIX, LLC

Contract Overview

Contract Amount: $62,833,351 ($62.8M)

Contractor: Smartronix, LLC

Awarding Agency: Department of Defense

Start Date: 2012-04-30

End Date: 2017-06-15

Contract Duration: 1,872 days

Daily Burn Rate: $33.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: PROVIDE SUPPORT SERVICES AND INCIDENTAL MATERIALS TO SPECIAL COMMUNICATIONS REQUIREMENTS (SCR) DIVISION FOR TELECOMMUNICATIONS AND RELATED COMMUNICATION-ELECTRONIC (C-E) SYSTEMS AND SUBSYSTEMS

Place of Performance

Location: SAINT INIGOES, SAINT MARYS County, MARYLAND, 20684

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $62.8 million to SMARTRONIX, LLC for work described as: PROVIDE SUPPORT SERVICES AND INCIDENTAL MATERIALS TO SPECIAL COMMUNICATIONS REQUIREMENTS (SCR) DIVISION FOR TELECOMMUNICATIONS AND RELATED COMMUNICATION-ELECTRONIC (C-E) SYSTEMS AND SUBSYSTEMS Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. The duration of the contract was 1872 days, indicating a long-term need for these services. 4. The contract was awarded to a single vendor, SMARTRONIX, LLC, for specialized communications support. 5. The contract value of $62.8M over approximately 5 years suggests significant investment in telecommunications systems. 6. The North American Industry Classification System (NAICS) code 541330 points to Engineering Services.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable contract data. The Cost Plus Fixed Fee (CPFF) contract type inherently carries a risk of cost escalation, as the contractor is reimbursed for allowable costs plus a fixed fee. While the total award was $62.8M, the actual costs incurred and the efficiency of service delivery are not detailed. Further analysis would require comparing the fixed fee percentage and the cost performance against industry standards for similar engineering and specialized telecommunications support services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The fact that it resulted in a single award to SMARTRONIX, LLC suggests that they were the most advantageous offer based on the evaluation criteria. The level of competition at the bid stage is not specified, but the 'full and open' designation implies a robust process was intended.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to better pricing and service quality. However, the ultimate value for taxpayers depends on the effectiveness of the competition and the contractor's performance.

Public Impact

The primary beneficiaries are the Department of the Navy and the Special Communications Requirements (SCR) Division, receiving support for critical telecommunications and communication-electronic systems. The services delivered are essential for maintaining and potentially upgrading specialized communication systems vital for national security and operational readiness. The contract's impact is likely concentrated within the Maryland region, given the contractor's state (ST: MD) and the nature of specialized technical support. The contract supports a workforce skilled in telecommunications engineering, electronic systems, and specialized communications, contributing to the technical expertise within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize higher spending if not rigorously monitored.
Lack of detailed performance metrics makes it difficult to assess the true value for money.
Long contract duration (1872 days) may reduce flexibility to adopt newer technologies if not managed proactively.

Positive Signals

Awarded under full and open competition, suggesting a competitive process.
The contract supports critical national defense telecommunications infrastructure.
SMARTRONIX, LLC has a track record in providing similar services to the government.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), specifically supporting specialized telecommunications and communication-electronic systems for the Department of Defense. The market for such specialized engineering and technical support services is significant within the defense industry, driven by the constant need to maintain, upgrade, and secure complex communication networks. Comparable spending benchmarks would typically involve analyzing other large-scale engineering support contracts awarded by the Navy or other defense agencies for similar technological domains.

Small Business Impact

The data indicates that small business participation (SB: false) was not a primary set-aside consideration for this contract. There is no explicit information on subcontracting plans for small businesses. This suggests that the prime contractor, SMARTRONIX, LLC, likely handled the majority of the work internally or with large business partners, potentially limiting direct opportunities for small businesses within this specific contract's scope.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. Accountability measures would be embedded in the contract's terms, including performance standards, reporting requirements, and payment schedules tied to milestones. Transparency is generally facilitated through contract award databases like FPDS, though detailed operational oversight and Inspector General (IG) jurisdiction would depend on specific clauses and any identified performance issues or fraud concerns.

Related Government Programs

Defense Communications Systems
Telecommunications Engineering Services
Specialized Electronic Systems Support
Department of Defense IT and Communications Procurement
Navy C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) Contracts

Risk Flags

Cost Overrun Risk (CPFF Contract Type)
Potential for Scope Creep
Difficulty in Performance Benchmarking
Limited Small Business Subcontracting Visibility

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $62.8 million to SMARTRONIX, LLC. PROVIDE SUPPORT SERVICES AND INCIDENTAL MATERIALS TO SPECIAL COMMUNICATIONS REQUIREMENTS (SCR) DIVISION FOR TELECOMMUNICATIONS AND RELATED COMMUNICATION-ELECTRONIC (C-E) SYSTEMS AND SUBSYSTEMS

Who is the contractor on this award?

The obligated recipient is SMARTRONIX, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $62.8 million.

What is the period of performance?

Start: 2012-04-30. End: 2017-06-15.

What was the specific nature of the 'special communications requirements' supported by this contract?

The contract supported 'Special Communications Requirements (SCR) Division for Telecommunications and Related Communication-Electronic (C-E) Systems and Subsystems.' While the exact nature of these 'special communications requirements' is not detailed in the provided data, it implies highly specialized, potentially classified or mission-critical communication needs beyond standard military telecommunications. This could encompass secure voice and data transmission, advanced signal processing, unique antenna systems, or custom-built communication platforms tailored for specific operational environments or intelligence gathering purposes. The 'C-E Systems and Subsystems' designation further suggests a focus on the hardware and electronic components integral to these communication capabilities.

How did SMARTRONIX, LLC's past performance influence this award?

While the provided data confirms SMARTRONIX, LLC as the awardee, it does not detail their specific past performance record or how it was evaluated for this particular contract. Government agencies typically assess past performance by reviewing contractor history on previous contracts, including timeliness, quality of work, cost control, and adherence to contract terms. For a contract of this magnitude and specialization, it is highly probable that SMARTRONIX, LLC demonstrated a strong history of successfully delivering similar engineering and telecommunications support services to the Department of Defense or other federal agencies. A positive past performance evaluation would have been a critical factor in their selection as the most advantageous offer.

What are the typical risks associated with Cost Plus Fixed Fee (CPFF) contracts in this sector?

Cost Plus Fixed Fee (CPFF) contracts, like the one awarded to SMARTRONIX, LLC, carry inherent risks, particularly in complex engineering and technology sectors. The primary risk for the government is cost overrun, as the contractor is reimbursed for all allowable costs plus a predetermined fixed fee. If costs escalate beyond initial projections, the government pays more. This can happen due to unforeseen technical challenges, scope creep, or inefficient contractor performance. For the contractor, the risk lies in underestimating costs, which could reduce their profit margin (the fixed fee). Effective oversight, detailed cost tracking, and robust negotiation of the fixed fee are crucial to mitigate these risks and ensure value for the government.

Can we compare the per-unit cost or efficiency of this contract to similar DoD telecommunications support contracts?

Direct comparison of per-unit cost or efficiency for this contract is not feasible with the provided data. The contract value is a total award amount ($62.8M) over a long period (1872 days), and the services involve specialized engineering and support for telecommunications systems, which are not easily quantifiable into standard 'units.' To perform such a comparison, one would need access to detailed task orders, specific deliverables, performance metrics, and data from comparable contracts awarded to other vendors for similar specialized services. Benchmarking would require analyzing factors like labor hours, complexity of systems supported, and the criticality of the communications requirements.

What was the total spending on similar engineering services (NAICS 541330) by the Department of the Navy during the contract period (2012-2017)?

Determining the total spending by the Department of the Navy on NAICS code 541330 (Engineering Services) specifically during the contract period of April 30, 2012, to June 15, 2017, requires access to comprehensive federal procurement databases (like FPDS-NG or USASpending.gov) filtered by agency, NAICS code, and the specified date range. While this specific contract was for $62.8M, the overall Navy spending on engineering services would encompass numerous contracts across various divisions and requirements. A detailed analysis of procurement data would be necessary to aggregate this information, which is beyond the scope of the provided summary data.

What is the significance of the contract being an 'Award Delivery Order' (AW: DELIVERY ORDER)?

The designation 'DELIVERY ORDER' indicates that this contract is likely a task order issued under a larger indefinite-delivery, indefinite-quantity (IDIQ) contract or a similar type of contract vehicle. This means that the $62.8M represents the total value of orders placed against a base contract, rather than a single, fixed-price award from the outset. Delivery orders allow the government to procure specific goods or services as needed over the contract's duration. This approach provides flexibility for the agency to order varying quantities or types of services based on evolving requirements, while the 'full and open' competition likely occurred at the IDIQ contract level, establishing the terms under which these delivery orders could be issued.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002410R3492

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Smartronix LLC

Address: 22685 THREE NOTCH RD STE E, CALIFORNIA, MD, 20619

Business Categories: Category Business, Minority Owned Business, Not Designated a Small Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, Indian (Subcontinent) American Owned Business

Financial Breakdown

Contract Ceiling: $75,010,887

Exercised Options: $64,584,948

Current Obligation: $62,833,351

Subaward Activity

Number of Subawards: 244

Total Subaward Amount: $22,777,831

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017805D4563

IDV Type: IDC

Timeline