DoD's $24.4M contract for HRSC support awarded to InspiritInc raises questions on competition and value

Contract Overview

Contract Amount: $24,411,105 ($24.4M)

Contractor: Inspiritec Inc

Awarding Agency: Department of Defense

Start Date: 2016-08-25

End Date: 2021-10-24

Contract Duration: 1,886 days

Daily Burn Rate: $12.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF HRSC SUPPORT

Place of Performance

Location: FORT KNOX, HARDIN County, KENTUCKY, 40121

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $24.4 million to INSPIRITEC INC for work described as: IGF::OT::IGF HRSC SUPPORT Key points: 1. The contract's value for money is questionable given the lack of competitive bidding. 2. Competition dynamics were limited, with a sole-source award. 3. Risk indicators include potential overpayment due to non-competitive pricing. 4. Performance context shows a 5-year duration for HRSC support services. 5. Sector positioning is within administrative and support services for the Defense sector.

Value Assessment

Rating: questionable

The contract's value is difficult to benchmark due to its sole-source nature. Without competitive bids, it's challenging to assess if the $24.4 million awarded represents a fair market price for the HRSC support services. Comparisons to similar contracts are limited by the lack of transparency in the procurement process. The firm-fixed-price structure offers some cost certainty, but the absence of competition prevents a robust value-for-money assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. The Department of the Army did not solicit bids from multiple vendors. This significantly limits price discovery and may result in higher costs for the government compared to a competitively awarded contract. The rationale for the sole-source award is not detailed in the provided data.

Taxpayer Impact: The lack of competition means taxpayers may not have received the best possible price for these services. Without competing offers, there's no market pressure to drive down costs.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Army, receiving HRSC support. Services delivered include telemarketing and contact center operations. The geographic impact is centered in Kentucky, where the contractor is located. Workforce implications are likely related to the employment of personnel for contact center operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding raises concerns about potential overpricing.
Sole-source award limits transparency and accountability in pricing.
Contract duration of 5 years without competition could lock in potentially suboptimal costs.
Absence of small business participation noted, though not explicitly stated as a requirement.
Specific performance metrics and their impact on cost are not detailed.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Contract awarded to a single entity, potentially simplifying management.
Long-term contract may ensure continuity of essential HRSC support services.
Contract duration of nearly 5 years suggests a stable, ongoing need for the service.

Sector Analysis

This contract falls within the administrative and support services sector, specifically contact centers and telemarketing. The federal market for such services is substantial, supporting various government functions. This particular award represents a significant portion of spending for HRSC support within the Department of Defense, highlighting the reliance on specialized external providers for these critical operational tasks.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting plans. The absence of small business involvement in this sole-source award suggests limited opportunities for smaller firms to participate in this specific contract, potentially impacting the broader small business ecosystem for federal contracting in this service area.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve contract officers and program managers within the Department of the Army. Accountability measures are tied to the firm-fixed-price terms and service level agreements, though specifics are not provided. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Human Resources Activity (DHRA) contracts
Army Human Resources Command (AHRC) support services
Federal Contact Center Services
Outsourced Call Center Contracts
Administrative Support Services Contracts

Risk Flags

Sole-source award lacks competition
Potential for overpricing due to lack of competition
Limited transparency in procurement process
No clear indication of small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.4 million to INSPIRITEC INC. IGF::OT::IGF HRSC SUPPORT

Who is the contractor on this award?

The obligated recipient is INSPIRITEC 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 $24.4 million.

What is the period of performance?

Start: 2016-08-25. End: 2021-10-24.

What is the track record of InspiritInc with federal contracts, particularly with the Department of Defense?

InspiritInc has been awarded federal contracts, with this specific contract for HRSC support being a significant one valued at over $24 million. Further analysis would require examining their contract history across various agencies, including performance ratings, past issues, and the types of services previously rendered. Understanding their performance on prior DoD contracts, especially those involving similar scope or complexity, would provide crucial context for assessing their capability and reliability in fulfilling the current HRSC support requirements. Without access to detailed performance data or past performance reviews, it is difficult to definitively assess their track record beyond the existence of this award.

How does the $24.4 million contract value compare to similar HRSC support contracts awarded by the DoD or other federal agencies?

Benchmarking this $24.4 million contract is challenging due to its sole-source nature and the lack of detailed service descriptions. Typically, competitive solicitations allow for price comparisons across multiple bidders, revealing market rates. For sole-source contracts, comparisons rely on historical data for similar services or publicly available pricing for commercial equivalents. Without specific details on the scope of HRSC support (e.g., number of calls handled, types of inquiries, operating hours), a direct comparison is speculative. However, a contract of this magnitude over a five-year period suggests a substantial operational requirement, and the absence of competition raises concerns about whether this represents optimal value compared to what could have been achieved through a competitive process.

What are the primary risks associated with this sole-source contract award for HRSC support?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competition. Without competing bids, InspiritInc may not have been incentivized to offer the most cost-effective solution. Another risk is reduced innovation, as a competitive environment often fosters better service delivery methods. Furthermore, the government has limited leverage to negotiate favorable terms or pricing adjustments throughout the contract's duration. There's also a risk of vendor lock-in, making it difficult and costly to switch providers if performance issues arise or better alternatives become available. The lack of transparency inherent in sole-source awards can also obscure potential inefficiencies or overcharges.

What is the expected effectiveness of the HRSC support services provided under this contract?

The effectiveness of the HRSC support services is contingent upon the specific performance metrics and service level agreements (SLAs) established within the contract, which are not detailed in the provided data. As a firm-fixed-price contract, the government expects a defined set of services to be delivered at a predetermined cost. The success of the contract hinges on InspiritInc's ability to meet these performance standards, such as call answer rates, resolution times, and customer satisfaction. The long-term nature of the contract (nearly 5 years) suggests an expectation of sustained, effective service delivery. However, without insight into the specific KPIs and quality assurance processes, a definitive assessment of expected effectiveness remains limited.

How does this contract fit into the broader historical spending patterns for HRSC support within the Department of the Army?

This $24.4 million contract represents a significant investment in HRSC support services for the Department of the Army over its nearly five-year duration. To understand its place in historical spending patterns, one would need to analyze previous contracts for similar services, noting the total expenditure, duration, and whether those were competitively or sole-source awarded. If the Army has historically relied on external contractors for HRSC functions, this contract may represent a continuation of that strategy. However, if spending on outsourced HRSC support has been increasing or decreasing, this contract's value could indicate a trend. The sole-source nature might also suggest a shift away from competitive procurement for these specific services, which warrants further investigation into the rationale behind such decisions.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Business Support Services › Telemarketing Bureaus and Other Contact Centers

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › ADMINISTRATIVE SUPPORT SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W9124D16R0025

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Inspiritec, Inc. (UEI: 112952432)

Address: 340 N 12TH ST STE 108, PHILADELPHIA, PA, 19107

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

Financial Breakdown

Contract Ceiling: $25,364,217

Exercised Options: $24,411,105

Current Obligation: $24,411,105

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline