Department of the Army awards $73M contract for radio and TV communication equipment to Datapath, Inc

Contract Overview

Contract Amount: $72,989,078 ($73.0M)

Contractor: Datapath, Inc.

Awarding Agency: Department of Defense

Start Date: 2006-05-12

End Date: 2008-12-31

Contract Duration: 964 days

Daily Burn Rate: $75.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 200608!003913!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !W15P7T06CG205 !A!N! !N! ! !20060512!20070821!015570583!015570583!015570583!N!DATAPATH INC !2450 SATELLITE BLVD !DULUTH !GA!30096!55776!135!13!NORCROSS !GWINNETT !GEORGIA !+000072989078!N!N!000000000000!5820!RADIO & TV COMM EQUIPMENT, EXCEPT AIRBORNE !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !NOT DISCERNABLE !334290!E! !3! ! ! ! ! !99990909!B! ! !N!Z!D!N!J!1!001!N!2A!A!N!Z! ! !N!B!N!N! ! !Z! !A!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: DULUTH, GWINNETT County, GEORGIA, 30096

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $73.0 million to DATAPATH, INC. for work described as: 200608!003913!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !W15P7T06CG205 !A!N! !N! ! !20060512!20070821!015570583!015570583!015570583!N!DATAPATH INC !2450 SATELLITE BLVD !DULUTH !GA!30096!55776!135!13!NORCROSS !GWIN… Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns. 2. The contract duration of 964 days suggests a significant, long-term need for the equipment. 3. The specific equipment category, 'Radio & TV Comm Equipment, Except Airborne,' indicates a focus on ground-based or non-aviation communication systems. 4. The award to a single vendor limits opportunities for competitive pricing and innovation. 5. The lack of competition may indicate a specialized or proprietary nature of the required equipment. 6. The contract value represents a substantial investment in communication infrastructure for the Army.

Value Assessment

Rating: questionable

The contract value of $72,989,078 for communication equipment appears substantial. Without specific details on the quantity and type of equipment, a direct comparison to similar contracts is difficult. However, the absence of competition suggests that the government may not have achieved the best possible pricing. Benchmarking against market rates for comparable commercial off-the-shelf equipment would be necessary to fully assess value for money. The firm fixed-price nature of the contract shifts some risk to the contractor, but the sole-source award limits the government's leverage.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one vendor, Datapath, Inc., was solicited. This approach is typically used when there is a compelling reason, such as unique capabilities, urgent need, or lack of other responsible sources. The absence of a competitive bidding process means that the government did not benefit from the price discovery that typically occurs in a multi-bidder environment. This can lead to higher prices than might be achieved through open competition.

Taxpayer Impact: Taxpayers may have paid a premium for this equipment due to the lack of competition. Without a competitive process, there is less assurance that the government secured the most cost-effective solution available.

Public Impact

The primary beneficiary of this contract is the Department of the Army, which will receive radio and TV communication equipment. The equipment is intended to support military operations and communication infrastructure. The geographic impact is likely concentrated within Army installations or operational areas where this equipment is deployed. The contract may have implications for the workforce involved in the manufacturing, installation, and maintenance of this specialized communication equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in the procurement process due to non-competitive award.
Potential for vendor lock-in if the equipment is proprietary or highly specialized.

Positive Signals

Firm fixed-price contract structure provides cost certainty for the government.
Contract awarded to a single, established vendor may indicate a proven track record or specialized capability.
The contract duration suggests a stable, long-term requirement, potentially leading to efficient production planning for the contractor.

Sector Analysis

The contract falls within the 'Electronics and Communication Equipment' sector, specifically under the North American Industry Classification System (NAICS) code 334290 for 'Other Communications Equipment Manufacturing.' This sector is characterized by rapid technological advancements and a mix of large defense contractors and specialized small businesses. The market size for military communication equipment is substantial, driven by ongoing modernization efforts and global security requirements. This contract represents a specific procurement within that larger market, likely for specialized ground-based communication systems.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award to Datapath, Inc., a single entity, does not directly benefit the small business ecosystem through set-asides. Further analysis would be needed to determine if Datapath has a history of subcontracting with small businesses for its projects.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. The Defense Contract Audit Agency (DCAA) may conduct audits to ensure cost reasonableness, especially given the sole-source nature. Transparency is limited due to the non-competitive award, but contract details and performance reports are usually available through federal procurement databases. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Communication Systems
Army Tactical Communication Networks
Radio and Television Broadcasting Equipment Manufacturing
Specialized Electronic Equipment Procurement

Risk Flags

Sole-source award
Lack of competition
Potential for price non-competitiveness

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $73.0 million to DATAPATH, INC.. 200608!003913!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !W15P7T06CG205 !A!N! !N! ! !20060512!20070821!015570583!015570583!015570583!N!DATAPATH INC !2450 SATELLITE BLVD !DULUTH !GA!30096!55776!135!13!NORCROSS !GWINNETT !GEORGIA !+000072989078!N!N!000000000000!5820!RADIO & TV COMM EQUIPMENT, EXCEPT AIRBORNE !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !NOT DISCERNABLE !334290!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is DATAPATH, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $73.0 million.

What is the period of performance?

Start: 2006-05-12. End: 2008-12-31.

What specific types of radio and TV communication equipment were procured under this contract?

The contract data indicates the procurement of 'Radio & TV Comm Equipment, Except Airborne' under NAICS code 334290. While the specific model numbers or detailed technical specifications are not provided in the summary data, this classification suggests equipment used for terrestrial broadcasting, two-way radio communication, or related non-aviation communication systems. This could include transmitters, receivers, antennas, signal processing units, or integrated communication systems designed for ground-based military operations. Further details would likely be found in the contract's statement of work or technical exhibits.

Why was this contract awarded on a sole-source basis instead of through full and open competition?

Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For this contract, potential justifications could include unique technological capabilities possessed by Datapath, Inc., urgent operational requirements that preclude a lengthy competitive process, or the existence of proprietary technology where Datapath is the sole developer or manufacturer. Without specific documentation from the Department of the Army justifying the sole-source determination (e.g., a Justification and Approval document), the exact reasons remain speculative. This lack of competition raises concerns about potential overpayment and limits opportunities for other qualified vendors.

How does the contract value of approximately $73 million compare to similar procurements for communication equipment by the Department of Defense?

Directly comparing this $73 million contract to similar procurements is challenging without knowing the exact specifications and quantities of equipment. However, the value is substantial and indicates a significant investment. The Department of Defense procures a wide range of communication equipment, from tactical radios to large-scale network infrastructure. Contracts of this magnitude are not uncommon for major system acquisitions or upgrades. The key concern here is not the absolute dollar amount, but whether this amount represents good value given the sole-source nature of the award. Benchmarking against commercially available systems or other sole-source awards for comparable military-grade equipment would be necessary for a thorough value assessment.

What is Datapath, Inc.'s track record with government contracts, particularly with the Department of Defense?

Datapath, Inc. has a history of receiving government contracts, including those with the Department of Defense. The provided data shows this specific contract awarded in 2006. A deeper dive into federal procurement databases (like FPDS or SAM.gov) would reveal the full extent of their contract history, including other agencies served, contract types, values, and performance ratings. Examining past performance, especially on similar communication equipment contracts, would provide insight into their reliability, quality of products, and ability to meet delivery schedules and technical requirements.

What are the potential risks associated with a sole-source contract of this size and duration?

The primary risks associated with a sole-source contract of this size ($73M) and duration (964 days, approx. 2.6 years) include: 1) Inflated Pricing: Without competition, the contractor may not be incentivized to offer the lowest possible price. 2) Limited Innovation: The government is reliant on the single vendor's offerings and cannot benefit from innovations or alternative solutions from other companies. 3) Vendor Lock-in: The government may become dependent on the sole-source provider, making future transitions difficult or costly. 4) Performance Issues: While the contract is firm fixed-price, a sole-source vendor might face fewer pressures to perform exceptionally well compared to a competitive environment. 5) Lack of Transparency: The justification for the sole-source award itself can sometimes lack transparency.

How does the NAICS code 334290 ('Other Communications Equipment Manufacturing') typically relate to defense spending?

NAICS code 334290 covers establishments primarily engaged in manufacturing communication equipment, except radio and television broadcast and wireless communications equipment. This can include a wide array of products relevant to defense, such as specialized radio systems (non-airborne), secure communication devices, signal intelligence equipment, and components for larger communication networks. Defense agencies often procure highly specialized or ruggedized versions of equipment within this category to meet demanding operational requirements in harsh environments. Therefore, this NAICS code is a relevant indicator of spending on critical, albeit sometimes niche, communication technologies for military applications.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Other Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins, Inc. (UEI: 962960589)

Address: 2450 SATELLITE BLVD, DULUTH, GA, 90

Business Categories: Category Business, Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline