Army awards $28.6M contract for Pacific overseas infrastructure, highlighting wired telecommunications needs

Contract Overview

Contract Amount: $28,628,405 ($28.6M)

Contractor: LGS Innovations LLC

Awarding Agency: Department of Defense

Start Date: 2020-04-03

End Date: 2025-09-20

Contract Duration: 1,996 days

Daily Burn Rate: $14.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: PACIFIC OUTSIDE PLANT - OVERSEAS INFRASTRUCTURE CAPABILITY SET. ENGINEER, FURNISH, INSTALL, SECURE, AND TEST A TURNKEY SOLUTION FOR THE PAC OSP-O INFRASTRUCTURE CAPABILITY SET TO THE US ARMY AT DESIGNATED SITES THROUGHOUT THE PACIFIC THEATER.

Place of Performance

Location: HIGH POINT, GUILFORD County, NORTH CAROLINA, 27265

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $28.6 million to LGS INNOVATIONS LLC for work described as: PACIFIC OUTSIDE PLANT - OVERSEAS INFRASTRUCTURE CAPABILITY SET. ENGINEER, FURNISH, INSTALL, SECURE, AND TEST A TURNKEY SOLUTION FOR THE PAC OSP-O INFRASTRUCTURE CAPABILITY SET TO THE US ARMY AT DESIGNATED SITES THROUGHOUT THE PACIFIC THEATER. Key points: 1. Contract addresses critical infrastructure needs in the Pacific theater, focusing on secure and reliable telecommunications. 2. The award was made under full and open competition, suggesting a robust market for these services. 3. The contract type, Cost Plus Fixed Fee, may present cost control challenges if not closely managed. 4. The duration of the contract, nearly 2000 days, indicates a long-term commitment to infrastructure development. 5. The North American Industry Classification System (NAICS) code 517110 points to the wired telecommunications carriers sector. 6. The contract is a delivery order, suggesting it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the scope of work and the exact services provided. The Cost Plus Fixed Fee (CPFF) contract type can sometimes lead to higher costs compared to fixed-price contracts if not managed diligently. However, CPFF is often used for complex projects where the final scope is not fully defined at the outset, allowing for flexibility. Comparing the per-unit cost would require detailed breakdowns of installation, equipment, and labor, which are not publicly available.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This competitive process is generally favorable for price discovery and ensuring the government receives competitive pricing. The presence of multiple bidders suggests a healthy market for wired telecommunications infrastructure services in the specified region.

Taxpayer Impact: Full and open competition typically benefits taxpayers by driving down prices through market forces and encouraging innovation among contractors.

Public Impact

The US Army benefits from enhanced communication and data infrastructure in the Pacific theater. Services include engineering, furnishing, installation, securing, and testing of telecommunications capabilities. The geographic impact is significant, covering designated sites throughout the Pacific. Workforce implications may include specialized technical roles for installation and maintenance of telecommunications systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can lead to cost overruns if not managed tightly.
The long duration of the contract requires sustained oversight to ensure performance and value.
Overseas infrastructure projects can face logistical and security challenges.

Positive Signals

Awarded under full and open competition, suggesting competitive pricing and vendor availability.
Addresses critical infrastructure needs for military operations in a strategic region.
The contract is a delivery order, implying it's part of a potentially larger, established framework.

Sector Analysis

This contract falls within the wired telecommunications carriers sector, which involves the infrastructure for transmitting voice and data. The market for such services is substantial, driven by both commercial and government demand for reliable connectivity. Government spending in this area is crucial for national security and operational readiness, particularly in geographically dispersed or challenging environments like the Pacific theater. Comparable spending benchmarks would typically involve other large-scale telecommunications infrastructure projects for government agencies.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses. Given the scale and technical requirements of overseas infrastructure projects, it is likely that larger, established telecommunications companies were the primary bidders. Subcontracting opportunities for small businesses may exist, but this would depend on the prime contractor's strategy and the specific needs of the project.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures would be tied to the terms of the Cost Plus Fixed Fee agreement, requiring detailed reporting on costs and progress. Transparency is facilitated through contract award notices and reporting requirements, though detailed performance metrics may not be publicly disclosed. The Inspector General's office could investigate any allegations of fraud, waste, or abuse.

Related Government Programs

Defense Telecommunications Infrastructure
Overseas Military Construction
Pacific Theater Operations Support
Wired Network Installation Services

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Long contract duration increases risk of scope creep and obsolescence.
Overseas operations present unique logistical and security challenges.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.6 million to LGS INNOVATIONS LLC. PACIFIC OUTSIDE PLANT - OVERSEAS INFRASTRUCTURE CAPABILITY SET. ENGINEER, FURNISH, INSTALL, SECURE, AND TEST A TURNKEY SOLUTION FOR THE PAC OSP-O INFRASTRUCTURE CAPABILITY SET TO THE US ARMY AT DESIGNATED SITES THROUGHOUT THE PACIFIC THEATER.

Who is the contractor on this award?

The obligated recipient is LGS INNOVATIONS LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $28.6 million.

What is the period of performance?

Start: 2020-04-03. End: 2025-09-20.

What is the specific breakdown of costs within this Cost Plus Fixed Fee contract?

The provided data does not include a detailed cost breakdown for this Cost Plus Fixed Fee (CPFF) contract. CPFF contracts typically reimburse the contractor for allowable costs incurred, plus a fixed fee representing profit. To understand the cost structure, one would need access to the contractor's financial submissions, including direct labor, indirect costs, materials, equipment, and the negotiated fixed fee. Without this granular data, it's impossible to assess the efficiency of resource allocation or identify potential areas for cost savings. The total award amount of $28.6 million represents the estimated total cost plus the fixed fee.

How does the $28.6 million award compare to similar overseas telecommunications infrastructure projects?

Direct comparison of the $28.6 million award to similar overseas telecommunications infrastructure projects is difficult without more specific project details and market data. The scope of work (engineer, furnish, install, secure, test), geographic location (Pacific theater), and specific requirements (OSP-O Infrastructure Capability Set) are unique. However, large-scale government telecommunications projects, especially those involving overseas deployment and complex infrastructure, can range from tens to hundreds of millions of dollars depending on scale, technology, and duration. The value is relative to the criticality of the infrastructure for military operations in the region.

What are the primary risks associated with a Cost Plus Fixed Fee contract for overseas infrastructure?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for overseas infrastructure include potential cost overruns and contractor inefficiency. Since the government reimburses allowable costs, there is less incentive for the contractor to control expenses compared to a fixed-price contract. This risk is amplified in overseas environments due to potential logistical challenges, unforeseen site conditions, currency fluctuations, and geopolitical factors that can drive up costs. Effective oversight, stringent cost accounting standards, and clear performance metrics are crucial to mitigate these risks and ensure the government receives good value.

What is the track record of LGS Innovations LLC in delivering similar large-scale overseas infrastructure projects?

Assessing the track record of LGS Innovations LLC requires a review of their past performance on contracts of similar size, scope, and complexity, particularly those involving overseas infrastructure and telecommunications. While the data indicates LGS Innovations LLC is the contractor, it does not provide specific performance history or past issues. A comprehensive analysis would involve examining past performance evaluations, any contract disputes or terminations, and their experience in the Pacific theater. Government contract databases and performance rating systems (like CPARS) are typically used to evaluate contractor reliability and past success.

How does the duration of this contract (nearly 2000 days) impact its overall value and risk?

The nearly 2000-day duration (approximately 5.5 years) for this contract signifies a long-term commitment to establishing and maintaining critical overseas infrastructure. This extended period allows for thorough implementation, testing, and potential adjustments, which can be beneficial for complex projects. However, it also increases the risk of scope creep, technological obsolescence, and potential cost increases due to inflation or changing requirements. Long durations necessitate sustained government oversight to ensure the project remains aligned with evolving needs and budget constraints, and that the contractor maintains performance standards throughout the contract lifecycle.

What are the implications of the NAICS code 517110 (Wired Telecommunications Carriers) for this contract?

The NAICS code 517110, 'Wired Telecommunications Carriers,' indicates that the primary business activity of the contractor relates to operating infrastructure for transmitting voice and data over wired networks. For this contract, it means the services procured involve the physical installation, maintenance, and potentially the operation of wired telecommunications systems, such as fiber optic cables, switching equipment, and related infrastructure. This aligns with the description of engineering, furnishing, and installing a telecommunications capability set. It signals that the government is procuring core telecommunications network infrastructure services.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: CACI International Inc

Address: 4090 PREMIER DRIVE, HIGH POINT, NC, 27265

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

Financial Breakdown

Contract Ceiling: $62,997,284

Exercised Options: $28,628,405

Current Obligation: $28,628,405

Subaward Activity

Number of Subawards: 16

Total Subaward Amount: $14,345,979

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA873215D0042

IDV Type: IDC

Timeline