DoD Spends $673M on Communication Equipment Repair, Awarded to Vectrus Systems LLC
Contract Overview
Contract Amount: $673,005,741 ($673.0M)
Contractor: Vectrus Systems LLC
Awarding Agency: Department of Defense
Start Date: 2011-03-31
End Date: 2013-08-31
Contract Duration: 884 days
Daily Burn Rate: $761.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: LABOR
Place of Performance
Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80919
State: Colorado Government Spending
Plain-Language Summary
Department of Defense obligated $673.0 million to VECTRUS SYSTEMS LLC for work described as: LABOR Key points: 1. Significant spending of $673M on communication equipment repair and maintenance. 2. Awarded to a single contractor, Vectrus Systems LLC, raising questions about competition. 3. Contract duration of 884 days (approx. 2.4 years) indicates a substantial commitment. 4. The sector is Defense, specifically communication equipment repair.
Value Assessment
Rating: fair
The contract's total value is $673M. Benchmarking against similar contracts for communication equipment repair and maintenance is difficult without more specific data on the scope of services and equipment involved. The cost-plus-fixed-fee structure warrants scrutiny to ensure efficiency.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Although listed as 'full and open competition,' the award went to a single entity, Vectrus Systems LLC. This suggests either a highly specialized service or potential issues in the competitive bidding process that led to a sole awardee.
Taxpayer Impact: Taxpayer funds totaling $673M were allocated. The effectiveness of the competition method in securing the best value for this significant expenditure is a key consideration.
Public Impact
Ensures continued operational readiness for critical communication equipment within the Department of Defense. Supports a significant contract value, potentially impacting the market for communication equipment repair services. Highlights the ongoing need for specialized maintenance services in the defense sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of transparency in the competitive process despite 'full and open' designation.
- Potential for cost overruns with a Cost Plus Fixed Fee contract.
- Concentration of a large contract with a single vendor.
Positive Signals
- Addresses a critical need for communication equipment maintenance.
- Long-term contract provides stability for service provision.
Sector Analysis
The defense sector heavily relies on specialized maintenance for complex communication systems. Spending benchmarks for such services can vary widely based on the technology and scale of operations, but $673M represents a substantial investment.
Small Business Impact
The data indicates this contract was not awarded to small businesses, as indicated by 'sb': false. The focus appears to be on larger, established contractors capable of handling extensive defense contracts.
Oversight & Accountability
The contract's oversight would fall under the Defense Contract Management Agency. Ensuring cost controls and performance standards are met within the Cost Plus Fixed Fee structure is crucial for accountability.
Related Government Programs
- Communication Equipment Repair and Maintenance
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Potential lack of true competition despite 'full and open' designation.
- Cost-plus-fixed-fee structure may lead to higher costs.
- Significant contract value concentrated with one vendor.
- Limited visibility into the specific services and equipment covered.
- Contract duration is substantial, requiring ongoing monitoring.
Tags
communication-equipment-repair-and-maint, department-of-defense, co, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $673.0 million to VECTRUS SYSTEMS LLC. LABOR
Who is the contractor on this award?
The obligated recipient is VECTRUS SYSTEMS LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $673.0 million.
What is the period of performance?
Start: 2011-03-31. End: 2013-08-31.
What specific factors led to only one awardee being selected under a 'full and open competition' for this substantial contract?
Further investigation into the solicitation documents, evaluation criteria, and bidder pool is necessary to understand why only Vectrus Systems LLC was awarded the contract. It's possible the technical requirements were highly specialized, or other bidders did not meet the stringent qualifications, leading to a de facto sole-source situation despite the initial competition type.
How effectively were costs managed under the Cost Plus Fixed Fee (CPFF) structure for this $673M contract, and were there any significant cost underruns or overruns?
CPFF contracts can incentivize contractors to increase costs to maximize profit, as the fee is fixed. Analyzing the final cost against the initial estimates and any incurred overruns or underruns is essential to determine if taxpayers received good value. Detailed audit reports from the Defense Contract Management Agency would be the primary source for this information.
What is the long-term strategic impact of awarding such a large communication equipment repair contract to a single vendor like Vectrus Systems LLC?
Awarding a large, long-term contract to a single vendor can create dependency and potentially stifle innovation or competition in the future. It's important to assess if this strategy ensures consistent service delivery and readiness, or if it limits future flexibility and potentially higher-value alternatives for the Department of Defense.
Industry Classification
NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Communication Equipment Repair and Maintenance
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 2
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Vectrus, Inc.
Address: 2424 GARDEN OF THE GODS RD STE 300, COLORADO SPRINGS, CO, 80919
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $823,121,584
Exercised Options: $748,774,920
Current Obligation: $673,005,741
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2011-03-31
Current End Date: 2013-08-31
Potential End Date: 2013-08-31 00:00:00
Last Modified: 2024-01-27
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