DoD awards $223M telecommunications contract to Salient Federal Solutions, Inc. with no competition

Contract Overview

Contract Amount: $222,894,102 ($222.9M)

Contractor: Salient Federal Solutions, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-04-13

End Date: 2025-12-31

Contract Duration: 2,819 days

Daily Burn Rate: $79.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: GCTC IV UCA AWARD

Place of Performance

Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22033

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $222.9 million to SALIENT FEDERAL SOLUTIONS, INC. for work described as: GCTC IV UCA AWARD Key points: 1. Contract awarded on a sole-source basis, raising questions about potential overpayment and lack of market pressure. 2. The contract's duration of nearly 8 years suggests a long-term need for these telecommunications services. 3. The 'All Other Telecommunications' NAICS code indicates a broad scope, potentially encompassing various service needs. 4. The firm fixed-price contract type aims to control costs, but the absence of competition limits price discovery. 5. Awarded to Salient Federal Solutions, Inc., a contractor with a significant federal presence. 6. The contract is managed by the Department of the Army, indicating a specific military requirement.

Value Assessment

Rating: questionable

Benchmarking the value of this $223 million contract is challenging due to the lack of competitive bidding. Without comparable contract data or multiple offers, it's difficult to ascertain if the pricing reflects fair market value. The firm fixed-price structure provides some cost certainty, but the absence of competition means there's no direct market pressure to ensure the most economical outcome for taxpayers. Further analysis would require access to internal cost data or a comparison to similar sole-source awards for comparable telecommunications services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed among multiple vendors. The Department of the Army determined that only one vendor, Salient Federal Solutions, Inc., could meet the specific requirements. This lack of competition limits the government's ability to explore alternative solutions or leverage market dynamics to achieve the best possible price and terms.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. It also limits opportunities for other businesses to secure government contracts.

Public Impact

The primary beneficiaries are likely military personnel and operations relying on robust telecommunications infrastructure. The contract delivers essential telecommunications services, crucial for command, control, and communication within the Department of Defense. The geographic impact is likely widespread, supporting DoD operations across various locations. Workforce implications may include direct employment by Salient Federal Solutions and indirect support roles within the DoD.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices and reduced innovation.
Sole-source awards can create vendor lock-in, making future transitions more difficult and costly.
The broad NAICS code could mask specific service needs that might be better met by specialized vendors if competed.

Positive Signals

Firm fixed-price contract type offers cost predictability.
Long-term contract duration suggests a stable and ongoing need, potentially leading to efficiencies through sustained service.
Award to an established federal contractor may indicate a history of meeting DoD requirements.

Sector Analysis

The telecommunications sector is a critical component of government operations, supporting everything from basic communication to advanced data transfer and cybersecurity. This contract falls under the broader IT and telecommunications services market, which is characterized by rapid technological advancements and significant government spending. Comparable spending benchmarks are difficult to establish without knowing the specific services rendered, but the overall federal IT spending is in the hundreds of billions annually. This award represents a substantial investment within this sector for the Department of Defense.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses indicated in the provided data. The sole-source nature of the award further limits opportunities for small businesses to participate in this particular contract. This means the primary contract value flows to the large business awardee, Salient Federal Solutions, Inc., with potential downstream impacts on the small business ecosystem being indirect.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified services within the agreed-upon price. Transparency is limited by the sole-source nature of the award; however, contract details are generally available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

DoD Telecommunications Services
Federal IT Procurement
Sole-Source Contract Awards
All Other Telecommunications Services

Risk Flags

Sole-source award lacks competitive justification.
Potential for inflated pricing due to lack of competition.
Risk of technological obsolescence over the contract's long duration.
Limited transparency regarding specific services and justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $222.9 million to SALIENT FEDERAL SOLUTIONS, INC.. GCTC IV UCA AWARD

Who is the contractor on this award?

The obligated recipient is SALIENT FEDERAL SOLUTIONS, 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 $222.9 million.

What is the period of performance?

Start: 2018-04-13. End: 2025-12-31.

What specific telecommunications services are covered under this contract?

The provided data indicates the contract falls under NAICS code 517919, 'All Other Telecommunications.' This broad classification suggests the contract could encompass a wide range of services, potentially including but not limited to network infrastructure, voice and data transmission, satellite communications, wireless services, and related support or maintenance. Without further details from the contract's statement of work, the precise nature and scope of the telecommunications services remain unspecified. This lack of specificity is common in high-level contract award data but makes detailed analysis of value and performance challenging.

Why was this contract awarded on a sole-source basis?

Sole-source awards are typically justified when only one responsible source is available or capable of meeting the agency's needs. Common justifications include unique capabilities, urgent requirements where competition is not feasible, or when a specific technology or service is only available from a single provider. For this $223 million Department of Defense contract, the specific justification for awarding to Salient Federal Solutions, Inc. without competition is not detailed in the provided data. Agencies must follow strict Federal Acquisition Regulation (FAR) guidelines to justify sole-source procurements, often requiring extensive documentation to prove the necessity and lack of alternatives.

How does the firm fixed-price contract type impact cost control given the lack of competition?

A firm fixed-price (FFP) contract type is generally preferred for its cost control benefits, as it obligates the contractor to perform the work for a predetermined price, regardless of their actual costs. This shifts the risk of cost overruns to the contractor. However, in a sole-source scenario, the 'predetermined price' is negotiated without the benefit of competitive market forces. While the FFP structure provides budget certainty for the government, the absence of competition means the government cannot be assured that the negotiated price is the most economical one achievable. The government relies heavily on its negotiation skills and market research (if conducted) to set a fair price.

What is Salient Federal Solutions, Inc.'s track record with the federal government?

Salient Federal Solutions, Inc. is a known entity in the federal contracting space. While the provided data doesn't detail their entire history, their ability to secure a $223 million sole-source award from the Department of the Army suggests a significant existing relationship and a perceived capability to meet DoD requirements. Federal procurement databases would contain more comprehensive information on their past performance, including other contracts awarded, agencies served, and performance ratings. A deeper dive would be needed to assess their overall track record, including any past performance issues or successes.

What are the potential risks associated with a nearly 8-year sole-source telecommunications contract?

The primary risks associated with a long-term, sole-source telecommunications contract include potential cost escalation over time, even with an FFP structure, if the initial price was not optimally negotiated. There's also the risk of technological obsolescence; telecommunications technology evolves rapidly, and an 8-year contract might lock the DoD into outdated systems. Vendor lock-in is another significant risk, making it difficult and costly to switch providers or adopt newer technologies. Furthermore, without competition, there's less incentive for the contractor to innovate or provide exceptional service beyond the contract minimums, potentially impacting operational effectiveness.

How does this contract compare to other federal spending in the telecommunications sector?

This $223 million award is a substantial contract within the federal telecommunications sector. Federal agencies collectively spend billions annually on telecommunications services, encompassing everything from basic phone lines and internet access to complex secure networks and satellite communications. While this specific award is significant, it represents one piece of a much larger spending pie. Its sole-source nature makes direct comparison to competitively awarded contracts difficult in terms of value-for-money. However, it highlights the DoD's reliance on specialized telecommunications capabilities and its willingness to award large, long-term contracts to meet these needs.

Industry Classification

NAICS: Information › Other Telecommunications › All Other Telecommunications

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W52P1J17RGCIV

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4000 LEGATO RD STE 600, FAIRFAX, VA, 22033

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

Financial Breakdown

Contract Ceiling: $222,894,102

Exercised Options: $222,894,102

Current Obligation: $222,894,102

Subaward Activity

Number of Subawards: 26

Total Subaward Amount: $8,156,020

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline