DoD's $62M telecommunication network management contract with AT&T shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $26,332,858 ($26.3M)

Contractor: AT&T Enterprises, LLC

Awarding Agency: Department of Defense

Start Date: 2005-07-12

End Date: 2010-11-30

Contract Duration: 1,967 days

Daily Burn Rate: $13.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: 200510!003679!9700!HC1013!DEFENSE INFO. TECHNOLOGY CONTRAC!DCA20097D0054 !A!N! !Y!0089 ! !20050712!20070228!621599893!621599893!006980080!N!AT&T CORP !1900 GALLOWS ROAD !VIENNA !VA!22182!81072!059!51!VIENNA !FAIRFAX !VIRGINIA !+000004943196!N!N!000000000000!D316!TELECOMMUNICATION NETWORK MANAGEMENT SERVICES !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !517110!E! !5!B!S! ! ! !20200930!B!F!Y!A! !A!N!J!2!003!C! !Z!N!Z! ! !Y!C!N! ! ! !Z!Z!A!A!000!A!C!N! ! ! ! ! !HC1046!0001! !

Place of Performance

Location: VIENNA, FAIRFAX County, VIRGINIA, 22182

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $26.3 million to AT&T ENTERPRISES, LLC for work described as: 200510!003679!9700!HC1013!DEFENSE INFO. TECHNOLOGY CONTRAC!DCA20097D0054 !A!N! !Y!0089 ! !20050712!20070228!621599893!621599893!006980080!N!AT&T CORP !1900 GALLOWS ROAD !VIENNA !VA!22182!81072!059!51!VIENNA !FAIR… Key points: 1. The contract's total value of $62.16 million over its period of performance appears reasonable given the scope of telecommunication network management services. 2. While AT&T is a major player, the limited competition for this contract may have impacted price discovery and potentially led to higher costs for taxpayers. 3. The contract was awarded under full and open competition, but the number of bidders is not specified, making a definitive assessment of competitive intensity difficult. 4. The contract's duration of approximately 5 years (1967 days) is substantial, indicating a long-term need for these services. 5. The services provided are critical for maintaining robust communication infrastructure within the Department of Defense. 6. The contract's performance context is within the Defense Information Systems Agency (DISA), a key entity for military IT and communications.

Value Assessment

Rating: fair

The contract's total value of $62.16 million for telecommunication network management services over roughly five years appears to be within a reasonable range for large-scale government IT contracts. Benchmarking against similar large-scale network management contracts is challenging without more specific service details and market data. However, the price per day is approximately $31,570, which, while substantial, is not inherently indicative of poor value without further context on the complexity and scale of the network managed. The firm-fixed-price structure generally provides cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' which is the most competitive method. However, the data does not specify the number of bids received. A high number of bidders typically leads to better price discovery and potentially lower costs for the government. If only a few bids were submitted despite full and open competition, it could indicate market concentration or barriers to entry for other potential contractors.

Taxpayer Impact: While full and open competition is ideal, the actual level of competition (number of bidders) is crucial for taxpayer benefit. If competition was robust, it likely resulted in a fair price. If competition was limited in practice, taxpayers may have overpaid.

Public Impact

The primary beneficiaries are the Department of Defense and its various branches, which rely on secure and efficient telecommunication networks for operations. The services delivered include telecommunication network management, ensuring the reliability and performance of critical communication systems. The geographic impact is likely widespread, supporting DoD operations across various locations where its personnel and systems are deployed. Workforce implications include the employment of telecommunications specialists and IT professionals by AT&T to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in due to the long-term nature and critical infrastructure reliance.
Limited insight into the specific performance metrics and quality of service provided by AT&T.
Dependence on a single large contractor for essential communication network management.

Positive Signals

Awarded under full and open competition, suggesting an effort to maximize contractor options.
Firm-fixed-price contract type provides budget certainty for the government.
AT&T is a well-established telecommunications provider with significant experience.

Sector Analysis

This contract falls within the Information Technology and Telecommunications sector, specifically focusing on network management services. The market for such services is large and competitive, with numerous providers ranging from large telecommunications companies to specialized IT firms. The Department of Defense is a significant consumer of these services, often requiring high levels of security, reliability, and scalability. Comparable spending benchmarks would involve analyzing other large-scale network infrastructure and management contracts awarded by federal agencies, particularly within the defense sector.

Small Business Impact

There is no indication that this contract involved small business set-asides. As a large telecommunications contract likely awarded to a major provider like AT&T, the primary focus is on capability and scale rather than small business participation. Subcontracting opportunities for small businesses may exist, but they are not explicitly detailed in the provided data. The impact on the small business ecosystem is likely minimal unless significant subcontracting plans were mandated and executed.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the Defense Contract Management Agency (DCMA) or equivalent within the Department of Defense. Accountability measures would be tied to the performance work statement and the firm-fixed-price terms. Transparency is generally facilitated through contract databases like FPDS, but detailed performance reports or audits are often not publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Information Technology Contracts
Telecommunication Services
Network Management Services
Department of Defense IT Spending
Large-Scale IT Infrastructure Contracts

Risk Flags

Limited Competition Data
Lack of Specific Performance Metrics
Potential for Vendor Lock-in

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.3 million to AT&T ENTERPRISES, LLC. 200510!003679!9700!HC1013!DEFENSE INFO. TECHNOLOGY CONTRAC!DCA20097D0054 !A!N! !Y!0089 ! !20050712!20070228!621599893!621599893!006980080!N!AT&T CORP !1900 GALLOWS ROAD !VIENNA !VA!22182!81072!059!51!VIENNA !FAIRFAX !VIRGINIA !+000004943196!N!N!000000000000!D316!TELECOMMUNICATION NETWORK MANAGEMENT SERVICES !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !517110!E! !5!B!S! ! ! !202

Who is the contractor on this award?

The obligated recipient is AT&T ENTERPRISES, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $26.3 million.

What is the period of performance?

Start: 2005-07-12. End: 2010-11-30.

What was the specific number of bids received for this 'full and open competition' contract?

The provided data indicates the contract was awarded under 'full and open competition' (CT=A). However, it does not specify the number of bids received (NO=3 is likely the number of contract actions or modifications, not bidders). A definitive assessment of competitive intensity requires knowing how many entities actually submitted proposals. If only a few bids were received, it could suggest market limitations or that the 'full and open' designation did not translate into robust price competition for this specific requirement.

How does the per-day cost of this contract compare to similar telecommunication network management contracts?

The contract's total value was $62,159,989.30 over a period of 1967 days (from 2005-07-12 to 2010-11-30, including extensions). This results in an approximate daily cost of $31,570. Comparing this to similar contracts is difficult without more granular data on the scope, scale, and specific services rendered. Large-scale, mission-critical network management for a major entity like the DoD often commands higher prices due to security requirements, 24/7 support, and infrastructure complexity. Without specific benchmarks for comparable DoD network management contracts, it's challenging to definitively state if this represents a high or low per-day cost.

What are the key performance indicators (KPIs) used to measure AT&T's performance under this contract?

The provided data does not detail the specific Key Performance Indicators (KPIs) or the Performance Work Statement (PWS) for this contract. Typically, for telecommunication network management, KPIs would include metrics such as network uptime/availability, response times for outages, service restoration times, data throughput, security compliance, and adherence to service level agreements (SLAs). The firm-fixed-price nature suggests that AT&T is responsible for delivering the defined services, and performance would be monitored against contractual requirements, with potential penalties or incentives tied to meeting or exceeding these KPIs.

What is the historical spending trend for telecommunication network management services by the Defense Information Systems Agency (DISA)?

The provided data represents a single contract award from 2005 to 2010. To understand historical spending trends for DISA in telecommunication network management, a broader analysis of contract awards over multiple years would be necessary. This would involve querying databases like FPDS for similar contracts awarded by DISA and potentially other DoD components. Factors influencing trends include technological advancements (e.g., shift to cloud, cybersecurity needs), changes in military operational requirements, and budget allocations. This single data point does not provide sufficient context for trend analysis.

Were there any performance issues or contract modifications noted during the life of this contract?

The data indicates the original award date was 2005-07-12 and the final delivery date was 2010-11-30, suggesting a duration of over 5 years. The 'NO' field shows '3', which could potentially represent modifications or delivery orders. Without further details on these modifications (e.g., changes in scope, value, or schedule), it's difficult to assess if there were significant performance issues. However, the contract's completion suggests that the services were ultimately delivered as required, though the specifics of its execution and any challenges encountered are not publicly detailed.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: TWO STEP

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: AT&T Inc.

Address: 2020 K ST NW STE 700, WASHINGTON, DC, 20006

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DCA20097D0054

IDV Type: IDC

Timeline