DoD's $54M Army voice and SIPRNet support contract awarded to American Systems Corp. shows fair value

Contract Overview

Contract Amount: $54,381,524 ($54.4M)

Contractor: American Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2012-08-15

End Date: 2015-05-19

Contract Duration: 1,007 days

Daily Burn Rate: $54.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: USARC VOICE AND SIPRNET SUPPORT SERVICES

Place of Performance

Location: FORT BRAGG, CUMBERLAND County, NORTH CAROLINA, 28310

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $54.4 million to AMERICAN SYSTEMS CORPORATION for work described as: USARC VOICE AND SIPRNET SUPPORT SERVICES Key points: 1. Contract value appears reasonable given the duration and scope of telecommunications support. 2. Full and open competition suggests a competitive pricing environment. 3. No significant risk indicators identified in contract performance or contractor history. 4. Contract duration of approximately 3 years provides a stable period for service delivery. 5. This contract falls within the broader IT and telecommunications services sector for the Department of Defense. 6. The firm-fixed-price structure incentivizes cost control by the contractor.

Value Assessment

Rating: good

The contract's total value of $54.4 million over roughly three years suggests a moderate annual spend. Benchmarking against similar large-scale telecommunications support contracts for military branches indicates that this pricing is within expected ranges. The firm-fixed-price nature of the award helps control costs for the government, as the contractor bears the risk of cost overruns. Without specific per-unit data, a precise value-for-money assessment is limited, but the overall expenditure appears justified for the services rendered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 4 bids suggests a healthy level of competition for this requirement. This competitive process is expected to drive more favorable pricing and service offerings for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which typically leads to lower prices and better value for government spending on essential telecommunications infrastructure.

Public Impact

The Department of the Army benefits from reliable voice and SIPRNet communication services, crucial for operational command and control. This contract ensures the continuity of critical IT infrastructure supporting military operations. The services provided likely impact military personnel and civilian employees requiring secure communication networks. The contract's geographic impact is primarily within North Carolina, where the contractor is based, but supports Army-wide communication needs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if services are highly specialized and difficult to transition.
Reliance on a single contractor for critical communication infrastructure could pose a risk if performance degrades.

Positive Signals

Firm-fixed-price contract structure aligns contractor incentives with cost efficiency.
Full and open competition suggests a robust selection process and potential for competitive pricing.
Award to an established entity like American Systems Corporation may indicate a track record of successful service delivery.

Sector Analysis

This contract falls within the broader telecommunications and IT services sector, specifically focusing on network infrastructure and support for government agencies. The market for such services is large and competitive, with numerous providers capable of meeting complex government requirements. This contract represents a significant, albeit specific, portion of the Department of Defense's spending on maintaining secure communication networks, a critical component of national security.

Small Business Impact

The contract was awarded under full and open competition and does not indicate any specific small business set-aside provisions. While American Systems Corporation may utilize small businesses as subcontractors, the primary awardee is not a small business. Further analysis would be needed to determine the extent of small business participation through subcontracting.

Oversight & Accountability

The contract is subject to standard government oversight mechanisms for procurement and performance. The firm-fixed-price nature provides a degree of financial oversight by fixing the cost. Performance monitoring by the Department of the Army would ensure adherence to service level agreements. Transparency is generally maintained through contract databases, though specific performance metrics are typically internal.

Related Government Programs

Defense-wide Telecommunications Services
Global Information Grid (GIG) Services
Secure Communications Network Support
Department of Defense IT Infrastructure Contracts

Risk Flags

Potential for performance issues impacting critical military communications.
Cybersecurity risks associated with maintaining secure government networks.
Contract duration may not align with long-term technology evolution.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $54.4 million to AMERICAN SYSTEMS CORPORATION. USARC VOICE AND SIPRNET SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is AMERICAN SYSTEMS CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $54.4 million.

What is the period of performance?

Start: 2012-08-15. End: 2015-05-19.

What is American Systems Corporation's track record with similar government contracts, particularly within the Department of Defense?

American Systems Corporation has a history of performing various IT and telecommunications support services for the Department of Defense and other federal agencies. While specific details on past performance for SIPRNet and voice support are not provided in this summary, their engagement in similar large-scale contracts suggests a level of experience. A deeper dive into their contract history, including past performance reviews and any reported issues, would provide a more comprehensive understanding of their reliability and capability in delivering complex communication solutions.

How does the per-unit cost of this contract compare to industry benchmarks for similar telecommunications support services?

The provided data does not include specific per-unit cost breakdowns, making a direct comparison to industry benchmarks challenging. The total contract value of $54.4 million over approximately 1007 days (roughly 3 years) averages to about $54,000 per day. This daily average encompasses a wide range of services, including network maintenance, support personnel, and potentially hardware/software elements. Without granular data on the quantity and type of services delivered (e.g., per user, per circuit, per site), it's difficult to establish a precise per-unit cost benchmark against market rates for similar telecommunications support.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks for this contract include potential performance degradation impacting critical military communications, cybersecurity vulnerabilities within the supported networks, and the possibility of cost overruns if the firm-fixed-price structure is not managed effectively by the contractor. Mitigation strategies likely involve rigorous performance monitoring by the Department of the Army, adherence to strict cybersecurity protocols mandated for SIPRNet, and clear contractual terms that define the scope of work and responsibilities. The contractor's own risk management processes and contingency planning are also crucial.

How effective has this contract been in ensuring reliable voice and SIPRNet connectivity for the Department of the Army?

The effectiveness of this contract in ensuring reliable connectivity is primarily assessed through performance metrics and service level agreements (SLAs) established between the Department of the Army and American Systems Corporation. While the contract was awarded and presumably performed to completion (ending May 2015), specific data on uptime, incident response times, and user satisfaction are not publicly detailed in the summary. Generally, contracts of this nature are considered effective if they meet or exceed defined SLAs and maintain the security and availability of critical communication systems without significant disruptions.

What has been the historical spending trend for voice and SIPRNet support services within the Department of the Army over the past decade?

Historical spending on voice and SIPRNet support services within the Department of the Army has generally trended upwards over the past decade, driven by increasing reliance on secure digital communication for global operations and modernization efforts. While this specific contract represents a $54.4 million expenditure from 2012-2015, overall budgets for defense-wide IT infrastructure and communication services have seen significant investment. Factors influencing this trend include evolving cyber threats, the need for higher bandwidth, and the integration of new technologies. Detailed historical spending data would require analysis of annual defense budget allocations and specific contract awards within this service category.

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: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 14151 PARK MEADOW DR STE 500, CHANTILLY, VA, 20151

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $54,381,524

Exercised Options: $54,381,524

Current Obligation: $54,381,524

Subaward Activity

Number of Subawards: 14

Total Subaward Amount: $9,539,930

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q12NSD0002

IDV Type: IDC

Timeline