DoD's $45M HR Phone Center Support Contract Awarded to Inspiritel Inc. Amidst Limited Competition

Contract Overview

Contract Amount: $44,995,292 ($45.0M)

Contractor: Inspiritec Inc

Awarding Agency: Department of Defense

Start Date: 2021-10-25

End Date: 2026-08-24

Contract Duration: 1,764 days

Daily Burn Rate: $25.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: SERVICE HR PHONE CENTER SUPPORT

Place of Performance

Location: FORT KNOX, HARDIN County, KENTUCKY, 40122

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $45.0 million to INSPIRITEC INC for work described as: SERVICE HR PHONE CENTER SUPPORT Key points: 1. Value for money appears fair given the fixed-price nature, but a lack of competitive bidding raises concerns about optimal pricing. 2. Competition dynamics are limited, with the contract being awarded on a 'not available for competition' basis, suggesting potential for higher costs. 3. Risk indicators include the sole-source nature of the award and the long duration, which could lead to vendor lock-in and reduced flexibility. 4. Performance context is a multi-year HR phone support service, critical for personnel, but specific performance metrics are not detailed here. 5. Sector positioning is within the administrative support services for the federal government, a common area for outsourced functions.

Value Assessment

Rating: fair

The contract's value of approximately $45 million over its duration is difficult to benchmark without comparable sole-source awards or detailed service level agreements. The firm fixed-price structure provides some cost certainty for the government. However, the absence of a competitive bidding process means there's no direct market comparison to assess if this price represents optimal value for the services rendered. Further analysis would require understanding the specific scope of work and the pricing structure for different service tiers.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'not available for competition' justification, indicating that a competitive process was not utilized. This typically occurs when only one source is capable of meeting the requirement, or in specific circumstances like follow-on work to a previous contract where competition was previously established. The lack of multiple bidders means the government did not benefit from price discovery through a competitive solicitation process.

Taxpayer Impact: For taxpayers, a sole-source award can mean a higher price than what might be achieved through open competition. It limits the government's ability to leverage market forces to secure the most cost-effective solution.

Public Impact

Military personnel and their families will benefit from access to HR support services via phone. The contract delivers essential human resources information and support, likely covering areas such as benefits, pay, and personnel administration. The geographic impact is nationwide, supporting Department of Defense personnel across various locations. Workforce implications include the potential for outsourced HR functions, impacting both government civilian HR staff and the contractor's employees.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs.
Long contract duration (over 4 years) could reduce flexibility and incentivize complacency.
Performance standards and quality metrics are not explicitly detailed in the provided data, posing a risk to service quality.
Sole-source awards can limit opportunities for innovative solutions from a broader market.

Positive Signals

Firm fixed-price contract type provides cost certainty for the government.
The contract addresses a critical support function for Department of Defense personnel.
The award is to a single entity, potentially simplifying management and oversight.

Sector Analysis

This contract falls within the broader administrative and support services sector, specifically focusing on contact center operations. The federal government frequently outsources such functions to specialized providers. The market for these services is competitive, but specific government requirements, security clearances, and established relationships can influence contract awards. Comparable spending benchmarks would typically involve analyzing other large-scale call center support contracts across various federal agencies.

Small Business Impact

The provided data indicates that this contract was not awarded as a small business set-aside (ss=false, sb=false). Therefore, there are no direct subcontracting implications for small businesses stemming from this specific award mechanism. The prime contractor, Inspiritel Inc., is responsible for its own subcontracting plan if applicable, but this contract itself does not mandate small business participation.

Oversight & Accountability

Oversight for this contract would typically reside with the contracting officer and the relevant program management office within the Department of the Army. Accountability measures are usually tied to the contract's performance work statement and service level agreements. Transparency is often limited for sole-source awards, as the justification for not competing is not publicly scrutinized in the same way as a competitive solicitation. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

DoD Human Resources Services
Federal Contact Center Support Contracts
Administrative Support Services
Telemarketing and Call Center Services

Risk Flags

Sole-source award raises concerns about price and competition.
Long contract duration may limit flexibility.
Lack of detailed performance metrics in summary data.
Potential for higher costs due to lack of competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $45.0 million to INSPIRITEC INC. SERVICE HR PHONE CENTER 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 $45.0 million.

What is the period of performance?

Start: 2021-10-25. End: 2026-08-24.

What is Inspiritel Inc.'s track record with federal contracts, particularly within the Department of Defense?

A comprehensive review of Inspiritel Inc.'s federal contracting history would require access to databases like the Federal Procurement Data System (FPDS) or the Contract Data Requirements List (CDRL). Based on the limited data provided, this is a significant award valued at approximately $45 million. Without further data, it's difficult to assess their overall performance, past issues, or other contract types they have held. Typically, agencies would review a contractor's past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) before awarding a large contract, especially a sole-source one. This would include assessing their ability to meet delivery schedules, quality standards, and manage costs on previous engagements.

How does the $45 million contract value compare to similar HR phone support services procured by the federal government?

Benchmarking this $45 million contract requires comparing it to similar HR phone support services procured by the federal government. Given this is a sole-source award, direct price comparisons are challenging. However, one could look at the average cost per call, cost per agent hour, or total contract value for other large-scale call center operations within DoD or other agencies providing similar HR functions. For instance, if other agencies procure similar services through competitive bids at a significantly lower total value or lower per-unit costs, it would suggest this contract may not be achieving optimal value for money. The duration of the contract (over 4 years) also influences the total value, making comparisons with shorter-term contracts less direct.

What are the primary risks associated with awarding a large contract like this on a sole-source basis?

The primary risks associated with awarding a large contract like this on a sole-source basis include: 1. **Higher Costs:** Without competition, the contractor may not feel pressured to offer the lowest possible price, potentially leading to inflated costs for the government. 2. **Reduced Innovation:** A sole-source award limits the opportunity to explore innovative solutions or technologies that other potential bidders might offer. 3. **Vendor Lock-in:** The government may become dependent on a single provider, making it difficult and costly to switch vendors in the future, even if performance declines. 4. **Lack of Transparency:** The justification for sole-source procurement may not always be fully transparent or robust, raising questions about fairness and efficiency. 5. **Potential for Complacency:** The awarded contractor might become complacent due to the lack of competitive pressure, potentially impacting service quality over the contract's long duration.

What specific HR services are covered under this contract, and how will their effectiveness be measured?

The provided data identifies the service as 'SERVICE HR PHONE CENTER SUPPORT' and the North American Industry Classification System (NAICS) code as 'Telemarketing Bureaus and Other Contact Centers'. This suggests the contract covers inbound and potentially outbound calls related to human resources functions. Specific services likely include answering inquiries about benefits, payroll, leave, personnel records, and other HR-related matters for Department of Defense personnel. Effectiveness is typically measured through Service Level Agreements (SLAs) outlined in the Performance Work Statement (PWS). These SLAs often include metrics such as average speed of answer, call abandonment rate, first-call resolution rate, customer satisfaction scores, and adherence to privacy regulations. However, these specific metrics are not detailed in the provided summary data.

What is the historical spending pattern for HR phone center support within the Department of Defense?

Analyzing historical spending patterns for HR phone center support within the Department of Defense would involve examining past contracts for similar services. This contract, valued at approximately $45 million over its duration, represents a significant investment. Historical data could reveal trends in contract values, the number of contracts awarded, the types of competition used (competitive vs. sole-source), and the average duration of such contracts. Understanding these patterns can help determine if current spending is consistent with past practices, if costs have escalated, or if there's a shift towards outsourcing these functions. Without access to historical procurement data, it's impossible to provide specific figures or trends for DoD's HR phone support spending.

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 AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W9124D21R0010

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 340 N 12TH ST STE 200, 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: $51,811,141

Exercised Options: $45,027,365

Current Obligation: $44,995,292

Actual Outlays: $838,216

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline