DoD's $15.9M LAN/WLAN modernization contract awarded to Empower AI, Inc. for Arizona network upgrades
Contract Overview
Contract Amount: $15,940,471 ($15.9M)
Contractor: Empower AI, Inc.
Awarding Agency: Department of Defense
Start Date: 2024-09-30
End Date: 2026-09-29
Contract Duration: 729 days
Daily Burn Rate: $21.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: DEFENSE HEALTH AGENCY LOCAL AREA NETWORK/WIRELESS LOCAL AREA NETWORKS MODERNIZATION PROGRAM. SURVEY, DESIGN, PROCUREMENT, INSTALLATION, IMPLEMENTATION, CLOSEOUT, AND PROJECT MANAGEMENT SERVICES.
Place of Performance
Location: FORT HUACHUCA, COCHISE County, ARIZONA, 85613
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $15.9 million to EMPOWER AI, INC. for work described as: DEFENSE HEALTH AGENCY LOCAL AREA NETWORK/WIRELESS LOCAL AREA NETWORKS MODERNIZATION PROGRAM. SURVEY, DESIGN, PROCUREMENT, INSTALLATION, IMPLEMENTATION, CLOSEOUT, AND PROJECT MANAGEMENT SERVICES. Key points: 1. The contract focuses on comprehensive network modernization services, including survey, design, procurement, installation, and project management. 2. Awarded through full and open competition, suggesting a competitive bidding process. 3. The contract duration of 729 days indicates a significant, multi-year effort for network infrastructure. 4. The services are categorized under Computer Systems Design Services, a common area for IT infrastructure projects. 5. The contract type is Cost Plus Fixed Fee, which allows for cost reimbursement plus a fixed fee, potentially balancing flexibility with cost control. 6. The geographic focus on Arizona suggests a localized but critical infrastructure upgrade for the Department of Defense.
Value Assessment
Rating: fair
Benchmarking the value of this $15.9 million contract is challenging without specific comparable contract data for similar LAN/WLAN modernization efforts. The Cost Plus Fixed Fee (CPFF) contract type can sometimes lead to higher costs compared to fixed-price contracts if not managed carefully, as it reimburses the contractor for allowable costs plus a predetermined profit. However, CPFF can be appropriate for complex projects where the scope is not fully defined at the outset. Further analysis would require understanding the specific technical requirements and the contractor's proposed fee structure relative to industry standards.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 3 bidders suggests a moderate level of competition for this specific requirement. While full and open competition is generally preferred for maximizing price discovery and ensuring fair market value, the actual level of competition (number of bidders) can vary significantly based on the specialized nature of the services and the number of qualified contractors in the market.
Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices through market forces, ensuring that the government receives competitive bids and avoids paying premium prices associated with limited or sole-source procurements.
Public Impact
The primary beneficiaries are the Department of Defense personnel and operations within the specified Arizona facilities, who will receive enhanced network capabilities. The services delivered include the modernization of Local Area Networks (LAN) and Wireless Local Area Networks (WLAN), crucial for secure and efficient communication. The geographic impact is concentrated in Arizona, where the physical infrastructure upgrades will take place. Workforce implications may include the need for specialized IT personnel for installation, configuration, and project management, potentially involving both government staff and contractor employees.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contracts require diligent oversight to ensure costs remain reasonable and within budget expectations.
- The success of the modernization hinges on effective project management and timely completion of all phases.
- Ensuring robust cybersecurity measures are integrated throughout the network design and implementation is critical.
Positive Signals
- Awarded through full and open competition, indicating a competitive bidding process.
- The contract specifies a clear set of services from survey to closeout, providing a defined scope of work.
- The modernization of critical network infrastructure is essential for maintaining operational readiness.
Sector Analysis
The IT services sector, particularly network design, implementation, and management, is a significant area of federal spending. This contract falls under computer systems design services, which encompasses a broad range of activities related to planning and designing computer systems. Federal spending in this category often supports modernization efforts for aging infrastructure, cybersecurity enhancements, and the adoption of new technologies. Comparable spending benchmarks would typically be found within IT modernization programs across various agencies, with costs influenced by project scale, complexity, and geographic location.
Small Business Impact
This contract was not set aside for small businesses and was awarded under full and open competition. There is no explicit indication of small business subcontracting requirements in the provided data. Therefore, the direct impact on the small business ecosystem is likely minimal unless Empower AI, Inc. voluntarily includes small businesses in its subcontracting efforts. Further review of the contract's subcontracting plan, if applicable, would be necessary to fully assess its impact.
Oversight & Accountability
Oversight for this contract will likely be managed by the Department of the Army, under the Department of Defense, through designated contracting officers and technical representatives. Accountability measures are inherent in the Cost Plus Fixed Fee structure, which requires detailed reporting of costs and progress. Transparency is typically facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected or alleged.
Related Government Programs
- Defense Health Agency IT Modernization Programs
- Department of Defense Network Infrastructure Upgrades
- Federal IT Services Contracts
- Computer Systems Design Services
Risk Flags
- Cost Plus Fixed Fee contract type requires diligent cost oversight.
- Potential for schedule delays in complex IT infrastructure projects.
- Cybersecurity risks during network transition and implementation.
Tags
it-services, network-modernization, local-area-network, wireless-local-area-network, department-of-defense, department-of-the-army, cost-plus-fixed-fee, full-and-open-competition, computer-systems-design-services, arizona, infrastructure-upgrade, it-project-management
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $15.9 million to EMPOWER AI, INC.. DEFENSE HEALTH AGENCY LOCAL AREA NETWORK/WIRELESS LOCAL AREA NETWORKS MODERNIZATION PROGRAM. SURVEY, DESIGN, PROCUREMENT, INSTALLATION, IMPLEMENTATION, CLOSEOUT, AND PROJECT MANAGEMENT SERVICES.
Who is the contractor on this award?
The obligated recipient is EMPOWER AI, 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 $15.9 million.
What is the period of performance?
Start: 2024-09-30. End: 2026-09-29.
What is the track record of Empower AI, Inc. in delivering similar large-scale network modernization projects for the federal government?
Empower AI, Inc. (formerly known as Salient CRGT) has a history of providing IT services to the federal government, including network modernization and cybersecurity solutions. While specific details on past LAN/WLAN modernization projects of this exact scale and complexity are not immediately available in the provided data, the company's portfolio generally includes support for complex IT infrastructure across various defense and civilian agencies. A deeper dive into their contract history, performance evaluations (e.g., CPARS), and client testimonials would be necessary to fully assess their track record for this specific type of work. Their experience in areas like cloud migration, cybersecurity, and enterprise IT services suggests a foundational capability relevant to network modernization.
How does the estimated cost of $15.9 million compare to similar LAN/WLAN modernization projects within the Department of Defense or other federal agencies?
Benchmarking the $15.9 million cost for this 729-day LAN/WLAN modernization project requires comparing it against contracts with similar scope, complexity, geographic spread, and technological requirements. Without access to a database of comparable federal IT modernization contracts, a precise comparison is difficult. However, large-scale network infrastructure upgrades can range from millions to tens of millions of dollars, depending on the size of the facilities, the extent of the upgrade (e.g., replacing all cabling vs. upgrading wireless access points), and the specific security requirements. The Cost Plus Fixed Fee (CPFF) nature of this contract means the final cost could fluctuate based on actual allowable costs incurred by the contractor, plus a fixed fee. A thorough benchmark would involve analyzing the cost per square foot or per user for similar projects, factoring in the specific technical solutions proposed.
What are the primary risks associated with this contract, and what mitigation strategies are likely in place?
Key risks for this LAN/WLAN modernization contract include potential cost overruns due to the CPFF structure, schedule delays caused by unforeseen technical challenges or procurement issues, and cybersecurity vulnerabilities during the transition phase. Scope creep, where additional requirements are added beyond the initial agreement, is also a risk. Mitigation strategies likely involve robust project management, detailed technical specifications, phased implementation with clear milestones, regular performance reviews, stringent cybersecurity protocols, and proactive risk management planning by both the government and Empower AI, Inc. The contract's duration and the phased approach (survey, design, procurement, installation, closeout) also suggest a structured methodology to manage complexity and reduce risk.
How effective is the Cost Plus Fixed Fee (CPFF) contract type for managing IT modernization projects of this nature?
The CPFF contract type is often used for complex research and development or IT modernization projects where the scope and technical requirements are not fully defined at the outset, or where significant uncertainties exist. It provides flexibility by reimbursing the contractor for allowable costs plus a fixed fee representing profit. While this can be effective in ensuring the contractor has the resources to tackle complex challenges without being unduly penalized for unforeseen issues, it also places a greater burden on the government to meticulously monitor and audit costs to prevent overspending. For IT modernization, CPFF can be suitable if the project involves innovative solutions or requires extensive adaptation, but it necessitates strong government oversight to ensure value for money and control over the final price.
What are the historical spending patterns for LAN/WLAN modernization services within the Department of Defense?
Historical spending patterns for LAN/WLAN modernization within the Department of Defense (DoD) are substantial and ongoing, reflecting the critical need to maintain secure, high-performance networks across global operations. The DoD consistently invests billions annually in IT infrastructure, including network upgrades, cybersecurity enhancements, and the adoption of advanced technologies like 5G and cloud computing. Specific spending on LAN/WLAN modernization varies by service branch and specific modernization initiatives (e.g., Next Generation Enterprise Network - NGEN). This $15.9 million contract represents a segment of that broader investment, likely focused on specific installations or regional networks within the Army's purview, contributing to the overall modernization goals of the DoD's vast IT enterprise.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - NETWORK
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 3
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 11730 PLAZA AMERICA DR, RESTON, VA, 20190
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $45,629,132
Exercised Options: $38,818,930
Current Obligation: $15,940,471
Subaward Activity
Number of Subawards: 8
Total Subaward Amount: $9,039,090
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W9128Z22D0003
IDV Type: IDC
Timeline
Start Date: 2024-09-30
Current End Date: 2026-09-29
Potential End Date: 2027-09-29 00:00:00
Last Modified: 2026-01-15
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