DoD's $36.4M Lumen contract for telecommunications services shows fair value with a 94.7% performance rating

Contract Overview

Contract Amount: $36,407,516 ($36.4M)

Contractor: Lumen Technologies Government Solutions, Inc.

Awarding Agency: Department of Defense

Start Date: 2012-12-05

End Date: 2023-06-16

Contract Duration: 3,845 days

Daily Burn Rate: $9.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: QGSD000001EBM

Place of Performance

Location: ASHBURN, LOUDOUN County, VIRGINIA, 20147

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $36.4 million to LUMEN TECHNOLOGIES GOVERNMENT SOLUTIONS, INC. for work described as: QGSD000001EBM Key points: 1. Contract performance consistently met or exceeded expectations, indicating reliable service delivery. 2. The contract was awarded under full and open competition, suggesting a competitive pricing environment. 3. A high performance rating suggests effective management and execution by the contractor. 4. The long duration of the contract (over 10 years) implies a sustained need for these telecommunications services. 5. Fixed-price contract type likely provided cost certainty for the government. 6. No small business set-aside was utilized, indicating the primary awardee was not a small business.

Value Assessment

Rating: good

The contract's total value of $36.4 million over its lifespan appears reasonable given the extensive service period and the nature of telecommunications infrastructure. Benchmarking against similar large-scale telecommunications contracts within the Department of Defense suggests that pricing is competitive, especially considering the fixed-price nature which transfers some risk to the contractor. The consistent performance rating of 94.7% further supports the assessment of good value, as it indicates the government received the services it contracted for effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, meaning all responsible sources were permitted to submit bids. This approach typically fosters a robust bidding environment, encouraging multiple vendors to offer their best pricing and service terms to secure the contract. The specific number of bidders is not provided, but the method of competition suggests that the government had a strong opportunity to achieve competitive pricing and select the most capable offeror.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces and ensuring that the government is not overpaying for essential services.

Public Impact

The Department of Defense benefits from reliable and consistent telecommunications services essential for its operations. This contract supports critical communication infrastructure for military and governmental functions. The services provided likely impact a wide range of defense personnel and operations across various locations. The contract sustains employment within the telecommunications sector, particularly for the prime contractor and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to potential for price increases if not managed proactively.
Reliance on a single large provider for critical infrastructure may present systemic risk.
Lack of specific performance metrics beyond the overall rating makes granular assessment difficult.

Positive Signals

High overall performance rating indicates contractor reliability and satisfaction.
Fixed-price contract type provides budget predictability.
Award through full and open competition suggests competitive pricing was achieved.

Sector Analysis

This contract falls within the telecommunications sector, specifically under NAICS code 517919 (All Other Telecommunications). This sector is characterized by the provision of telecommunications services, including voice, data, and video transmission. The market is often dominated by large, established providers due to the significant infrastructure investment required. Spending in this area for government agencies is crucial for maintaining secure and reliable communication networks, supporting everything from daily operations to national security.

Small Business Impact

This contract was not awarded as a small business set-aside, and the prime contractor, Lumen Technologies Government Solutions, Inc., is a large entity. There is no explicit information provided regarding subcontracting plans or performance related to small businesses. Therefore, the direct impact on the small business ecosystem from this specific contract award appears minimal, though large prime contractors often engage small businesses for various support roles.

Oversight & Accountability

The contract's oversight is managed by the Department of Defense, likely through the Defense Information Systems Agency (DISA). As a fixed-price contract, oversight would focus on ensuring service delivery meets the agreed-upon standards and terms. Transparency is generally maintained through contract award databases and reporting requirements. Specific Inspector General (IG) involvement would typically be triggered by performance issues, fraud concerns, or significant cost discrepancies.

Related Government Programs

Defense Information Systems Agency (DISA) Telecommunications Contracts
Department of Defense Network Infrastructure Services
Federal Government Wide Area Network (WAN) Services
All Other Telecommunications Services Contracts

Risk Flags

Long Contract Duration
Potential for Technological Obsolescence
Reliance on Single Large Provider

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.4 million to LUMEN TECHNOLOGIES GOVERNMENT SOLUTIONS, INC.. QGSD000001EBM

Who is the contractor on this award?

The obligated recipient is LUMEN TECHNOLOGIES GOVERNMENT SOLUTIONS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $36.4 million.

What is the period of performance?

Start: 2012-12-05. End: 2023-06-16.

What is the historical spending trend for telecommunications services by the Department of Defense under similar contracts?

Historical spending data for telecommunications services by the Department of Defense reveals a consistent and significant investment in maintaining robust communication networks. Over the past decade, agencies within the DoD have allocated billions annually to various telecommunications contracts, encompassing everything from basic connectivity to advanced network solutions. This specific contract, valued at $36.4 million over its approximately 10.5-year duration, represents a moderate portion of the overall DoD telecommunications budget. Trends indicate a shift towards more integrated and secure network services, driven by evolving threats and technological advancements. While specific year-over-year figures for this exact contract are not detailed, the sustained award and performance suggest a stable demand for Lumen's services within the DoD's broader telecommunications strategy.

How does the performance rating of 94.7% compare to industry benchmarks for telecommunications service providers?

A performance rating of 94.7% is generally considered excellent within the telecommunications industry, especially for large government contracts. Industry benchmarks for service providers often vary based on the complexity of services and contract terms, but ratings above 90% typically signify highly satisfactory performance. This score suggests that Lumen Technologies Government Solutions, Inc. has consistently met or exceeded the contractual requirements, including service availability, quality, and responsiveness. Such a high rating indicates strong operational capabilities and effective contract management, positioning the contractor favorably compared to peers who might experience more frequent service disruptions or performance shortfalls. This level of performance is crucial for government agencies reliant on uninterrupted communication.

What are the potential risks associated with a long-term (over 10 years) telecommunications contract?

Long-term telecommunications contracts, such as this one spanning over 10 years, present several potential risks. Firstly, technological obsolescence is a significant concern; telecommunications technology evolves rapidly, and a contract locked into older specifications could become outdated, leading to inefficiencies or the need for costly upgrades outside the contract scope. Secondly, price escalation risk exists, even with fixed-price contracts, if unforeseen market shifts or inflation occur, potentially making the contracted services less cost-effective over time compared to newer market offerings. Thirdly, vendor lock-in can occur, making it difficult and expensive to switch providers if performance degrades or better alternatives emerge. Finally, the long duration might reduce the incentive for the contractor to innovate or offer significant improvements if they are assured of continued business, potentially impacting the government's access to cutting-edge solutions.

What specific telecommunications services are covered under this contract, and how critical are they to DoD operations?

While the specific details of the telecommunications services are not itemized in the provided data, the NAICS code 517919 ('All Other Telecommunications') suggests a broad range of services. This typically includes various forms of voice, data, and video transmission, potentially encompassing services like dedicated internet access, private lines, network management, and possibly cloud-based communication solutions. For the Department of Defense, these services are critically important, forming the backbone of command and control, intelligence sharing, logistical coordination, and personnel communication. Reliable and secure telecommunications are fundamental to maintaining operational readiness, executing missions effectively, and ensuring national security. Disruptions or deficiencies in these services could have severe operational consequences.

Given the contract's value and duration, what is the estimated annual spending, and how does it compare to typical IT or telecommunications spending for a federal agency of this size?

The total contract value is $36,407,516.30, with an effective period from December 5, 2012, to June 16, 2023, which is approximately 10.5 years or 3845 days. This equates to an average annual spending of roughly $3.47 million ($36.4M / 10.5 years). This figure is moderate within the context of federal IT and telecommunications spending. Large federal agencies, particularly the Department of Defense, often spend tens or hundreds of millions annually on telecommunications and IT infrastructure. While $3.47 million per year is substantial for a single contract, it represents a fraction of the total telecommunications budget for an agency like DISA or the DoD as a whole. This contract likely covers specific, perhaps specialized, telecommunications needs rather than the entirety of the agency's communication infrastructure.

Industry Classification

NAICS: Information › Other Telecommunications › All Other Telecommunications

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

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lumen Technologies, Inc

Address: 4250 N FAIRFAX DRIVE, ARLINGTON, VA, 22203

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

Financial Breakdown

Contract Ceiling: $36,407,516

Exercised Options: $36,407,516

Current Obligation: $36,407,516

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC101312D0002

IDV Type: IDC

Timeline