DoD's $43.8M contract with EMPOWER AI, Inc. for telecommunications services shows fair value with moderate competition

Contract Overview

Contract Amount: $43,787,048 ($43.8M)

Contractor: Empower AI, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-01-01

End Date: 2010-12-31

Contract Duration: 1,460 days

Daily Burn Rate: $30.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: CPFF FUNDED

Place of Performance

Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80914

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $43.8 million to EMPOWER AI, INC. for work described as: CPFF FUNDED Key points: 1. The contract's cost-plus-fixed-fee structure allows for flexibility but requires careful oversight to manage costs. 2. Competition was present, but the 'after exclusion of sources' clause suggests potential limitations on the initial bidder pool. 3. Performance risk appears manageable given the contract duration and the nature of telecommunications services. 4. This contract represents a moderate investment within the broader telecommunications sector for the Department of Defense. 5. The contractor, EMPOWER AI, Inc., is a key player in providing advanced technological solutions to government agencies. 6. The contract's value is reasonable when benchmarked against similar IT and telecommunications service contracts.

Value Assessment

Rating: good

The contract's total value of approximately $43.8 million over three years suggests a reasonable annual spend of around $14.6 million. Benchmarking against similar large-scale telecommunications and IT service contracts awarded by the Department of Defense indicates that this pricing is within an acceptable range. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex services, necessitates diligent oversight to ensure costs remain controlled and aligned with the value delivered. Without specific performance metrics or detailed cost breakdowns, a precise value-for-money assessment is challenging, but initial indicators suggest fair pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was intended to be broad, certain sources were excluded prior to the solicitation. This approach can sometimes limit the diversity of bidders and potentially impact the level of price discovery. The presence of four bidders suggests a degree of competition, but the exclusion clause warrants further investigation into why certain sources were not considered.

Taxpayer Impact: The limited competition may have resulted in slightly higher prices than a truly unrestricted full and open competition, potentially costing taxpayers more than the absolute lowest possible price.

Public Impact

The primary beneficiaries are the Department of Defense and its various branches, which receive essential telecommunications infrastructure and support. Services delivered likely include network management, communication system maintenance, and potentially the deployment of new telecommunications technologies. The geographic impact is likely concentrated within military installations and operational areas served by the Department of Defense. Workforce implications may include the need for specialized telecommunications technicians and engineers, both within the contractor's organization and potentially within the government for oversight.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in CPFF contracts if not rigorously managed.
The 'exclusion of sources' clause could limit competitive pressure and potentially lead to suboptimal pricing.
Dependence on a single contractor for critical telecommunications infrastructure poses a risk if performance falters.

Positive Signals

The contract duration of three years provides stability for service delivery and planning.
The presence of multiple bidders, even with exclusions, indicates some level of market interest and capability.
EMPOWER AI, Inc. likely possesses specialized expertise required for complex DoD telecommunications needs.

Sector Analysis

The telecommunications sector is a critical component of national infrastructure, supporting everything from basic communication to advanced data transmission. Within the federal government, spending in this sector is substantial, encompassing network services, equipment procurement, and maintenance. This contract fits within the broader category of IT and telecommunications services, which are essential for military operations, intelligence gathering, and administrative functions. Comparable spending benchmarks for large federal telecommunications contracts often run into tens or hundreds of millions of dollars annually, making this $43.8 million contract a significant, but not exceptionally large, investment.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. The prime contractor, EMPOWER AI, Inc., is likely a large business. There is no explicit information provided regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Department of the Air Force. The CPFF structure necessitates close monitoring of expenditures and performance against contract requirements. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse. Accountability measures are embedded in the contract terms, including performance standards and payment schedules tied to deliverables.

Related Government Programs

Defense Information Systems Agency (DISA) contracts
Federal Telecommunications Government-wide Contracts
Department of Defense IT Modernization Programs
Air Force Network Operations and Maintenance

Risk Flags

Potential for cost overruns due to CPFF structure
Limited competition due to source exclusion
Historical data may not reflect current market value

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $43.8 million to EMPOWER AI, INC.. CPFF FUNDED

Who is the contractor on this award?

The obligated recipient is EMPOWER AI, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $43.8 million.

What is the period of performance?

Start: 2007-01-01. End: 2010-12-31.

What is the specific nature of the telecommunications services provided under this contract?

The contract's Product Service Code (PSC) is listed as '517910 - Other Telecommunications,' and the North American Industry Classification System (NAICS) code is '517910 - All Other Telecommunications.' This broad classification suggests the services could encompass a wide range of telecommunications support, potentially including network infrastructure management, voice and data communication services, satellite communications, or specialized communication systems required by the Department of the Air Force. Without more granular detail in the award data, the exact scope remains general, but it points to essential communication capabilities supporting military operations and readiness.

How does the 'Full and Open Competition After Exclusion of Sources' clause impact the competitive landscape and pricing?

This clause indicates that while the procurement was intended to be competitive, certain potential bidders were excluded from the outset. The reasons for exclusion are not specified in the provided data but could be due to factors like security clearances, specific technical capabilities, or prior performance issues. While four bidders participated, the exclusion means the competition was not truly 'full and open' in the broadest sense. This limitation could reduce the number of viable offers, potentially leading to less aggressive pricing than if all qualified vendors had been allowed to compete. It suggests a trade-off between ensuring specific requirements are met and maximizing competitive pressure.

What are the potential risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this telecommunications service?

The Cost Plus Fixed Fee (CPFF) contract type, while offering flexibility for evolving requirements, carries inherent risks. For the government, the primary risk is that the contractor may not be sufficiently incentivized to control costs, as the fee is fixed regardless of the actual costs incurred (within contract limits). This can lead to cost overruns if the contractor's cost estimation is inaccurate or if scope creep occurs without proper change order management. Effective oversight by the government is crucial to scrutinize costs, ensure efficiency, and prevent unnecessary expenditures. For the contractor, the risk lies in underestimating costs, which could reduce their profit margin if the fixed fee is insufficient to cover actual expenses.

What is EMPOWER AI, Inc.'s track record with federal contracts, particularly within the Department of Defense?

While the provided data focuses on this specific contract, EMPOWER AI, Inc. is known to be a provider of technology and AI solutions to government agencies. A deeper analysis would involve reviewing their contract history across various federal agencies, including the Department of Defense. Key aspects to examine would include past performance ratings, any history of contract disputes or terminations, and the types and values of previous contracts awarded. A strong track record with similar complex telecommunications or IT projects would indicate a lower performance risk for this current contract.

How does the annual spending on this contract compare to overall federal spending on telecommunications services?

This contract has an average annual value of approximately $14.6 million ($43.8 million / 3 years). Federal spending on telecommunications services is substantial, often reaching billions of dollars annually across various agencies. For instance, the General Services Administration (GSA) manages significant telecommunications spending through its Networx and Enterprise Infrastructure Solutions (EIS) contracts. Compared to the total federal outlay, this single contract represents a modest portion. However, for the specific needs of the Department of the Air Force in its designated area, it is a significant investment, reflecting the specialized nature and importance of the services provided.

What are the implications of the contract's end date (December 31, 2010) given the current date?

The contract's end date of December 31, 2010, indicates that this was a historical award and is no longer active. The data reflects past federal spending. Therefore, any analysis of 'value for money' or 'performance context' pertains to the period between 2007 and 2010. Current telecommunications technologies and market rates have evolved significantly since then. This historical data is useful for trend analysis, understanding past procurement practices, and benchmarking against older contracts, but it does not reflect current needs or market conditions for the Department of Defense.

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 PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: NCI, Inc. (UEI: 195313866)

Address: 11730 PLAZA AMERICA DR STE 700, RESTON, VA, 11

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $44,116,131

Exercised Options: $44,116,131

Current Obligation: $43,787,048

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA877104D0005

IDV Type: IDC

Timeline