DoD's $28.9M contract for telecommunications support awarded without competition, raising value-for-money questions

Contract Overview

Contract Amount: $28,933,646 ($28.9M)

Contractor: Domestic Awardees (undisclosed)

Awarding Agency: Department of Defense

Start Date: 2013-08-03

End Date: 2015-08-02

Contract Duration: 729 days

Daily Burn Rate: $39.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: IGF::OT::IGF TECHNICAL INTERCEPT UNIT/LAWFUL JUDICIAL INTERCEPT SUPPORT PROGRAM

Place of Performance

Location: ANNAPOLIS JUNCTION, ANNE ARUNDEL County, MARYLAND, 20701

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $28.9 million to DOMESTIC AWARDEES (UNDISCLOSED) for work described as: IGF::OT::IGF TECHNICAL INTERCEPT UNIT/LAWFUL JUDICIAL INTERCEPT SUPPORT PROGRAM Key points: 1. The contract's sole-source nature limits price discovery and potentially inflates costs. 2. Lack of competition suggests potential risks in contractor performance and innovation. 3. The contract duration of 729 days is substantial, requiring close performance monitoring. 4. The 'All Other Telecommunications' NAICS code is broad, obscuring specific service details. 5. The cost-plus-fixed-fee (CPFF) structure may incentivize cost overruns. 6. The absence of small business set-aside raises concerns about broader economic participation.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of disclosed awardee and specific service details. However, the 'cost plus fixed fee' pricing structure, combined with a sole-source award, inherently carries a higher risk of suboptimal value for money compared to competitively bid fixed-price contracts. Without comparative data on similar sole-source procurements for lawful judicial intercept support, it's difficult to definitively assess pricing fairness. The total award amount of $28.9 million over two years suggests a significant investment, underscoring the need for robust justification of its necessity and cost-effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of Defense did not solicit bids from multiple potential contractors. This approach is typically justified when only one source is capable of meeting the agency's needs, often due to proprietary technology, unique expertise, or urgent requirements. However, the absence of competition significantly reduces the opportunity for price negotiation and may lead to higher costs for the government. The lack of a competitive process means that market forces were not leveraged to ensure the best possible price and quality.

Taxpayer Impact: Taxpayers may be paying a premium for services due to the lack of competitive bidding. Without competition, there is less pressure on the contractor to offer the most cost-effective solution, potentially leading to inefficient use of public funds.

Public Impact

This contract supports the Department of Defense's intelligence and operational capabilities by providing lawful judicial intercept support. The services delivered are critical for national security and law enforcement operations requiring electronic surveillance. The geographic impact is likely focused on areas where the Department of Defense operates or requires intelligence gathering. The contract supports a specialized workforce within the telecommunications and intelligence sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition increases the risk of inflated pricing and reduced service quality.
The CPFF contract type can incentivize higher spending by the contractor.
Undisclosed awardee makes it impossible to assess past performance or potential conflicts of interest.
Broad NAICS code obscures the specific nature and potential risks of the services procured.

Positive Signals

The contract addresses a critical national security need for lawful intercept capabilities.
The fixed fee component of the CPFF contract provides some level of cost predictability.
The contract is managed by the Department of the Army, suggesting established procurement processes.

Sector Analysis

The telecommunications sector is vast and encompasses a wide range of services, from infrastructure to specialized support. Within this sector, contracts for lawful intercept capabilities are highly specialized and often involve sensitive technologies and expertise. The market for such services can be concentrated, with a limited number of firms possessing the necessary clearances and technical proficiency. Benchmarking this specific contract is difficult without knowing the exact services rendered, but spending on intelligence and surveillance technologies within the defense sector is substantial and ongoing.

Small Business Impact

The contract data indicates that small business participation was not a factor, as the 'ss' (small business set-aside) field is false and the 'sb' (small business) field is also false. This suggests that the procurement was not specifically targeted towards small businesses, nor was it awarded to a small business prime contractor. Consequently, there are no direct subcontracting implications for small businesses arising from this specific award. The absence of a small business focus in this sole-source procurement means that opportunities for small business innovation and participation in this specialized area of telecommunications support were not actively pursued.

Oversight & Accountability

Oversight for this contract would fall under the Department of the Army's contracting and program management offices. As a sole-source award, the justification for this procurement and the contractor's performance would be subject to internal review and potentially audits by the Department of Defense Inspector General. Transparency is limited due to the sole-source nature and the undisclosed awardee, making public assessment of accountability challenging. Specific oversight mechanisms would depend on the nature of the services and the sensitivity of the information involved.

Related Government Programs

Lawful Intercept Services
Telecommunications Support Services
Intelligence, Surveillance, and Reconnaissance (ISR) Support
Department of Defense IT and Communications Contracts
National Security Agency (NSA) related procurements

Risk Flags

Sole-source award lacks competition, potentially leading to higher costs.
Cost-plus-fixed-fee structure may incentivize cost overruns.
Undisclosed awardee prevents assessment of contractor's past performance and reliability.
Broad NAICS code obscures the specific nature and risks of services procured.
Lack of small business participation limits economic opportunities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.9 million to DOMESTIC AWARDEES (UNDISCLOSED). IGF::OT::IGF TECHNICAL INTERCEPT UNIT/LAWFUL JUDICIAL INTERCEPT SUPPORT PROGRAM

Who is the contractor on this award?

The obligated recipient is DOMESTIC AWARDEES (UNDISCLOSED).

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $28.9 million.

What is the period of performance?

Start: 2013-08-03. End: 2015-08-02.

What specific telecommunications services are being provided under this contract?

The provided data indicates the contract falls under NAICS code 517919, 'All Other Telecommunications.' This is a very broad category that could encompass a wide range of services, including but not limited to network management, signal intelligence support, secure communications, and potentially specialized lawful intercept technologies. Without further details or access to the contract's statement of work, the precise nature of the services remains undisclosed. This lack of specificity makes it difficult to assess the contract's necessity, value, and associated risks accurately. The 'IGF::OT::IGF TECHNICAL INTERCEPT UNIT/LAWFUL JUDICIAL INTERCEPT SUPPORT PROGRAM' description offers a clue, suggesting a focus on enabling legal surveillance capabilities, likely involving technical expertise in intercepting and processing communications data.

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

Sole-source awards are typically granted when only one responsible source is available or capable of meeting the agency's requirements. For a contract related to 'Lawful Judicial Intercept Support,' potential justifications could include the need for highly specialized proprietary technology, unique technical expertise, or specific security clearances that only a single contractor possesses. The Department of Defense would have had to document the rationale for this sole-source determination, likely citing factors such as national security, the unavailability of alternative solutions, or the prohibitive cost and time associated with developing a competitive solicitation for such a niche requirement. However, without access to the official justification documentation, the exact reasons remain speculative.

What is the typical cost structure for similar lawful intercept support contracts?

The cost structure for lawful intercept support contracts can vary significantly based on the complexity of the services, the technology involved, and the specific requirements of the agency. Contracts can be fixed-price, cost-reimbursable, or a hybrid like the Cost Plus Fixed Fee (CPFF) used here. CPFF contracts involve the government reimbursing the contractor for allowable costs plus a fixed fee representing profit. This structure can be advantageous when the scope of work is not fully defined or involves significant uncertainty, as it allows for flexibility. However, it also carries a risk of cost growth if not managed diligently. Benchmarking against other sole-source CPFF contracts for similar specialized services would be necessary for a comprehensive value assessment, but such data is often not publicly available due to security and proprietary concerns.

What are the potential risks associated with a sole-source CPFF contract for sensitive services?

Sole-source contracts, by definition, eliminate competitive pressure, which can lead to higher prices and potentially less incentive for the contractor to optimize performance or innovate. A Cost Plus Fixed Fee (CPFF) structure, while offering flexibility, can incentivize the contractor to incur more costs to increase the base upon which the fixed fee is calculated, although the fee itself is fixed. For sensitive services like lawful intercept support, risks also include potential over-reliance on a single vendor, challenges in ensuring robust security protocols are maintained without competitive oversight, and difficulties in verifying the necessity and efficiency of all incurred costs. Effective government oversight, stringent performance metrics, and clear contract terms are crucial to mitigate these risks.

How does the duration of this contract (729 days) impact its risk profile?

A contract duration of 729 days (approximately two years) is substantial for specialized technical services. This extended period increases the potential impact of any performance issues or cost overruns. It also means that the government is committed to a significant expenditure over a longer timeframe, necessitating continuous monitoring and evaluation of the contractor's performance and adherence to contract terms. For a sole-source contract, a longer duration amplifies the risks associated with lack of competition, as the government is locked into this relationship for an extended period without the opportunity to re-evaluate market alternatives. Regular performance reviews and milestone assessments are critical to ensure the contract remains aligned with evolving needs and delivers value.

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

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1800 F ST NW, WASHINGTON, DC, 20405

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

Financial Breakdown

Contract Ceiling: $33,526,430

Exercised Options: $33,526,430

Current Obligation: $28,933,646

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline