Department of Defense awards $181.5M contract for communications equipment to Datapath, Inc

Contract Overview

Contract Amount: $181,473,246 ($181.5M)

Contractor: Datapath, Inc.

Awarding Agency: Department of Defense

Start Date: 2006-09-21

End Date: 2009-07-01

Contract Duration: 1,014 days

Daily Burn Rate: $179.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 200612!007501!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !W15P7T06CG410 !A!N! !N! ! !20060921!20071230!015570583!015570583!015570583!N!DATAPATH INC !2450 SATELLITE BLVD !DULUTH !GA!30096!55776!135!13!NORCROSS !GWINNETT !GEORGIA !+000181153928!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: CEDAR RAPIDS, LINN County, IOWA, 52498

State: Iowa Government Spending

Plain-Language Summary

Department of Defense obligated $181.5 million to DATAPATH, INC. for work described as: 200612!007501!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !W15P7T06CG410 !A!N! !N! ! !20060921!20071230!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 over 1000 days suggests a long-term need for these services. 3. The awarded amount is substantial, indicating a significant investment in communications technology. 4. The specific product code points to a niche market within electronics and communication equipment. 5. The contractor, Datapath, Inc., is a single entity, limiting broader market engagement. 6. The contract was not competed, suggesting potential limitations in achieving best value.

Value Assessment

Rating: questionable

The awarded amount of $181.5 million for communications equipment is substantial. Without comparable contract data or detailed cost breakdowns, it is difficult to definitively assess value for money. The lack of competition is a significant factor that could lead to inflated pricing. Benchmarking against similar sole-source procurements or market rates for comparable equipment would be necessary for a more thorough evaluation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in urgent situations. The lack of competition limits the government's ability to leverage market forces to secure the best possible price and terms.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is less pressure on the contractor to offer competitive pricing. It also limits opportunities for other businesses to secure government contracts.

Public Impact

The primary beneficiary of this contract is the Department of Defense, specifically the Army, which will receive advanced communications equipment. The contract will ensure the availability of critical communication systems for military operations. The geographic impact is primarily within the United States, where the equipment will be utilized and potentially serviced. The contract supports the defense industrial base by providing business to Datapath, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in suboptimal pricing.
Sole-source award raises concerns about the necessity of this specific vendor.
Long contract duration could lead to scope creep or unforeseen cost increases.

Positive Signals

Award to a single, established vendor may ensure continuity of supply.
Firm Fixed Price contract type provides cost certainty for the government.

Sector Analysis

This contract falls within the 'Other Communications Equipment Manufacturing' sector, a segment of the broader electronics and communication equipment industry. This industry is characterized by rapid technological advancements and specialized production capabilities. The market size for defense-related communications equipment is significant, driven by national security needs. This contract represents a substantial investment within this specialized niche.

Small Business Impact

There is no indication that this contract included small business set-asides. As a sole-source award to a specific company, it is unlikely to have direct subcontracting implications for small businesses unless Datapath, Inc. voluntarily engages them. This contract does not appear to foster the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and procurement regulations. Accountability measures are inherent in the firm fixed-price structure, which aims to cap costs. Transparency may be limited due to the sole-source nature of the award. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Communications Systems
Army Signal Corps Equipment
Electronic Warfare Systems
Tactical Communication Networks

Risk Flags

Sole-source award
Lack of competition
Potential for price inflation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $181.5 million to DATAPATH, INC.. 200612!007501!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !W15P7T06CG410 !A!N! !N! ! !20060921!20071230!015570583!015570583!015570583!N!DATAPATH INC !2450 SATELLITE BLVD !DULUTH !GA!30096!55776!135!13!NORCROSS !GWINNETT !GEORGIA !+000181153928!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 $181.5 million.

What is the period of performance?

Start: 2006-09-21. End: 2009-07-01.

What is the track record of Datapath, Inc. in fulfilling similar government contracts?

Information regarding Datapath, Inc.'s specific track record with government contracts is not detailed in the provided data. However, the award of a $181.5 million contract suggests a level of capability and past performance that the Department of the Army deemed sufficient for this sole-source procurement. Further investigation into past performance reviews, contract completion history, and any reported issues or successes would be necessary to fully assess their track record. Without this granular data, it's presumed the Army conducted due diligence before awarding this significant sole-source contract.

How does the awarded price compare to market rates for similar communications equipment?

The provided data does not include specific details about the communications equipment being procured or its unit cost, making a direct comparison to market rates challenging. The contract is for 'Other Communications Equipment Manufacturing' (NAICS 334290) and was awarded on a sole-source basis. Sole-source awards inherently limit the ability to benchmark against competitive bids. To assess value, one would need to identify comparable commercial off-the-shelf (COTS) equipment or similar sole-source defense contracts, analyze their pricing structures, and account for any unique specifications or support requirements associated with this particular award. The lack of competition suggests a potential for the price to be higher than if it were competitively bid.

What are the primary risks associated with this sole-source contract?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the absence of competition. Without multiple bidders vying for the contract, the government may not achieve the best possible value. Another risk is vendor lock-in, where the government becomes dependent on Datapath, Inc. for this specific equipment, potentially limiting future flexibility or negotiation power. Furthermore, the long duration of the contract (over 1000 days) increases the risk of cost overruns if unforeseen issues arise or if the scope of work needs to be modified. Ensuring robust oversight and clear performance metrics will be crucial to mitigate these risks.

How effective is the firm fixed-price contract type in managing costs for this procurement?

The Firm Fixed Price (FFP) contract type is generally effective in managing costs for the government because it shifts the risk of cost overruns to the contractor. Datapath, Inc. is obligated to deliver the specified communications equipment for the agreed-upon price of $181.5 million, regardless of their actual costs. This provides a high degree of cost certainty for the Department of the Army. However, the effectiveness of FFP in achieving the *best* price is diminished in a sole-source environment. While the total cost is fixed, the initial fixed price itself might be higher than it would be under competitive conditions. The FFP structure does, however, incentivize the contractor to control their own costs efficiently to maximize their profit margin.

What are the historical spending patterns for 'Other Communications Equipment Manufacturing' by the Department of the Army?

The provided data snippet focuses on a single contract award and does not offer historical spending patterns for the 'Other Communications Equipment Manufacturing' (NAICS 334290) category by the Department of the Army. To analyze historical spending, one would need access to broader contract databases covering multiple fiscal years. Such an analysis would involve identifying all contracts awarded under this NAICS code, summing their values annually, and examining trends in award types (competed vs. sole-source), average contract values, and key contractors. This would help contextualize the $181.5 million award within the Army's broader procurement history for similar equipment.

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, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline