DoD's $43.7M AFNET Engineering Services contract to Empower AI, Inc. awarded via full and open competition

Contract Overview

Contract Amount: $43,681,571 ($43.7M)

Contractor: Empower AI, Inc.

Awarding Agency: Department of Defense

Start Date: 2011-08-29

End Date: 2015-01-14

Contract Duration: 1,234 days

Daily Burn Rate: $35.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: COST NO FEE

Sector: IT

Official Description: AFNET REQUISITE ENGINEERING SERVICES (ARES)

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $43.7 million to EMPOWER AI, INC. for work described as: AFNET REQUISITE ENGINEERING SERVICES (ARES) Key points: 1. Contract awarded to Empower AI, Inc. for essential Air Force Network (AFNET) engineering services. 2. The contract utilized full and open competition, suggesting a competitive bidding process. 3. Performance period spanned from August 2011 to January 2015. 4. The contract type was Cost No Fee, indicating payment based on allowable costs. 5. The award amount was approximately $43.7 million. 6. The contract was a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle. 7. The North American Industry Classification System (NAICS) code is 517910 (Other Telecommunications).

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or detailed cost breakdowns. The Cost No Fee (CNF) contract type implies that the government reimburses allowable costs, but profit is not paid. This can sometimes lead to less incentive for cost control by the contractor compared to fixed-price contracts. However, the absence of a fee might indicate a specific program need or a relationship where cost efficiency was managed through other means. Further analysis would require comparing the final costs against the initial estimates and any established performance benchmarks.

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.' This designation implies that while the competition was broad, there might have been specific reasons for excluding certain sources initially, which were later overcome to allow for full and open competition. The presence of four bidders (no) suggests a reasonable level of competition for these specialized engineering services.

Taxpayer Impact: A competitive award process generally benefits taxpayers by fostering price discovery and potentially leading to more cost-effective solutions. The fact that multiple companies bid indicates that the government had options, which can drive down prices and improve the overall value received.

Public Impact

The primary beneficiaries are the United States Air Force, which receives critical network engineering support. Services delivered include engineering support essential for the operation and maintenance of the Air Force Network (AFNET). The geographic impact is likely focused on Air Force installations and operations globally, wherever AFNET is deployed. Workforce implications include the employment of skilled engineers and technical personnel by Empower AI, Inc. and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost No Fee contract type can sometimes reduce contractor incentives for cost efficiency if not managed rigorously.
The 'Exclusion of Sources' in the competition type warrants further investigation into the initial rationale and subsequent resolution.
Limited public information on specific performance outcomes makes a comprehensive value assessment difficult.

Positive Signals

Awarded through full and open competition, indicating a broad search for qualified vendors.
Multiple bidders participated, suggesting a healthy level of market interest and competition.
The contract supported a critical Air Force network infrastructure, indicating strategic importance.

Sector Analysis

This contract falls within the Telecommunications and IT services sector, specifically focusing on network engineering for a major government client. The market for government IT and telecommunications services is substantial, with significant spending allocated to maintaining and upgrading critical infrastructure like the AFNET. Comparable spending benchmarks would involve analyzing other large-scale network engineering contracts awarded by the Department of Defense or other federal agencies to understand typical cost structures and pricing models for similar services.

Small Business Impact

The provided data indicates that small business participation (sb) was false, and there was no specific small business set-aside (ss) for this contract. This suggests that the contract was not specifically targeted towards small businesses, and larger, established companies were likely the primary bidders. Subcontracting opportunities for small businesses may have existed, but they were not mandated as part of a set-aside strategy. The impact on the small business ecosystem is neutral to potentially negative if small businesses were capable of performing the work but were not actively solicited or considered.

Oversight & Accountability

Oversight for this contract would have been managed by the Department of Defense, likely through the Defense Contract Management Agency (DCMA), given their role in contract administration. Accountability measures would be tied to the contract's performance clauses and the Cost No Fee structure, ensuring that only allowable costs were reimbursed. Transparency is generally facilitated through contract databases like FPDS, which provide award details, though deeper insights into performance and cost justifications may be limited to government personnel and the contractor.

Related Government Programs

Air Force Network (AFNET) Operations and Maintenance
Department of Defense IT Infrastructure Support
Telecommunications Services Contracts
Network Engineering and Design Services

Risk Flags

Competition Type Ambiguity
Cost No Fee Structure Oversight
Limited Performance Data Availability

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $43.7 million to EMPOWER AI, INC.. AFNET REQUISITE ENGINEERING SERVICES (ARES)

Who is the contractor on this award?

The obligated recipient is EMPOWER AI, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $43.7 million.

What is the period of performance?

Start: 2011-08-29. End: 2015-01-14.

What was the specific nature of the 'Exclusion of Sources' in the competition type, and why was it later resolved for full and open competition?

The designation 'Full and Open Competition After Exclusion of Sources' is somewhat unusual. Typically, 'Full and Open Competition' means all responsible sources were permitted to compete. 'Exclusion of Sources' usually implies a justification for limiting the pool of potential bidders, often due to specific technical requirements, urgency, or proprietary data. The 'After' suggests that an initial exclusion might have been considered or implemented, but ultimately, the decision was made to allow all responsible sources to compete. Without further documentation specific to this award, the exact reason for the initial exclusion and its subsequent removal remains unclear. It could have stemmed from a misunderstanding of requirements, a change in acquisition strategy, or a successful challenge to the initial exclusion criteria. This ambiguity warrants a review of the solicitation documents and any associated justifications for the procurement approach.

How did the 'Cost No Fee' (CNF) contract type impact contractor performance and cost management compared to other contract types?

The Cost No Fee (CNF) contract type is characterized by the government reimbursing the contractor for all allowable costs incurred during performance, but without any additional fee or profit. This structure is typically used when the scope of work is uncertain, or when the government has a strong interest in the contractor's best efforts without the contractor bearing significant financial risk related to profit. For the contractor, the primary motivation is cost recovery rather than profit maximization. This can sometimes lead to less stringent cost controls, as the contractor is not directly incentivized to reduce costs to increase profit margins. However, effective government oversight, including robust auditing of allowable costs and performance monitoring, is crucial to ensure that costs remain reasonable and allocable to the contract. In this specific case, the CNF structure for AFNET engineering services suggests the government prioritized ensuring the availability of necessary expertise and resources, potentially accepting a higher degree of cost uncertainty in exchange for guaranteed service delivery.

What were the key performance indicators (KPIs) or metrics used to evaluate Empower AI, Inc.'s performance under this contract?

The provided data does not include specific Key Performance Indicators (KPIs) or metrics used to evaluate Empower AI, Inc.'s performance. Under a Cost No Fee contract, performance evaluation typically focuses on the contractor's adherence to the scope of work, the quality of deliverables, timeliness, and the allowability and reasonableness of incurred costs. For network engineering services, KPIs might have included network uptime, response times for issue resolution, successful implementation of network upgrades or changes, adherence to security protocols, and project completion rates. The absence of a fee means that contractor motivation relies heavily on factors like future contract opportunities, maintaining a good past performance record, and fulfilling contractual obligations. A comprehensive review of the contract's final performance reports or any associated contract administration records would be necessary to identify the specific metrics employed.

Can the $43.7 million award be considered a benchmark for similar AFNET engineering support contracts awarded around the same period?

The $43.7 million award for AFNET Requisite Engineering Services (ARES) to Empower AI, Inc. can serve as a reference point, but not a definitive benchmark, for similar contracts during the 2011-2015 period. Several factors influence its comparability. Firstly, the contract was a delivery order under a larger IDIQ vehicle, meaning the specific task orders could vary significantly in scope and complexity. Secondly, the Cost No Fee structure differs from fixed-price contracts, affecting how costs and value are perceived. Thirdly, the nature of network engineering services can be highly specialized, with costs varying based on the specific technologies, security requirements, and geographic locations supported. To establish a true benchmark, one would need to compare this award against other AFNET-related engineering support contracts, considering similar contract types, scopes of work, duration, and the competitive landscape at the time of award. Without such detailed comparative analysis, this figure represents an isolated data point for a specific set of services.

What is the historical spending trend for AFNET engineering services, and how does this contract fit within that trend?

Analyzing the historical spending trend for AFNET engineering services requires access to comprehensive contract data over an extended period. This specific contract, valued at approximately $43.7 million and spanning from 2011 to 2015, represents a significant but discrete investment in network engineering. Without broader historical data, it's difficult to definitively place this contract within a larger trend. However, given the critical nature of the Air Force Network, it is reasonable to assume that ongoing investment in its engineering, maintenance, and modernization is a consistent requirement. This contract likely represents a portion of the total spending on AFNET support during its performance period. To understand the trend, one would need to examine spending patterns in the years preceding and following this award, looking at the number, value, and types of contracts awarded for similar AFNET services to identify any increases, decreases, or shifts in procurement strategies.

Industry Classification

NAICS: Information › Other Telecommunications › Other Telecommunications

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: Advancemed Corporation (UEI: 824891477)

Address: 11730 PLAZA AMERICA DR STE 700, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $55,812,418

Exercised Options: $50,720,124

Current Obligation: $43,681,571

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA877104D0005

IDV Type: IDC

Timeline