NOAA Awards $167.7M Fixed-Price Task Order to Verizon for NWS Telecom Infrastructure

Contract Overview

Contract Amount: $16,770,935 ($16.8M)

Contractor: Verizon Business Network Services LLC

Awarding Agency: Department of Commerce

Start Date: 2024-07-01

End Date: 2026-06-30

Contract Duration: 729 days

Daily Burn Rate: $23.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: IT

Official Description: THIS IS A FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT TASK ORDER FOR THE NATIONAL WEATHER SERVICE FOR TELECOMMUNICATIONS INFRASTRUCTURE TRANSITION TO THE ENTERPRISE INFRASTRUCTURE SOLUTIONS (EIS) IDIQ CONTRACT.

Place of Performance

Location: SILVER SPRING, MONTGOMERY County, MARYLAND, 20910

State: Maryland Government Spending

Plain-Language Summary

Department of Commerce obligated $16.8 million to VERIZON BUSINESS NETWORK SERVICES LLC for work described as: THIS IS A FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT TASK ORDER FOR THE NATIONAL WEATHER SERVICE FOR TELECOMMUNICATIONS INFRASTRUCTURE TRANSITION TO THE ENTERPRISE INFRASTRUCTURE SOLUTIONS (EIS) IDIQ CONTRACT. Key points: 1. Verizon secures a significant task order for critical telecommunications infrastructure. 2. The contract leverages the Enterprise Infrastructure Solutions (EIS) IDIQ, indicating a strategic procurement approach. 3. Fixed-price with economic price adjustment offers some cost certainty while accounting for market fluctuations. 4. The award is for the National Weather Service, highlighting the importance of reliable communication for weather forecasting and public safety.

Value Assessment

Rating: good

This is a fixed-price with economic price adjustment contract, which is a common pricing structure for telecommunications services. The price is benchmarked against the overall IDIQ contract value and the duration of the task order.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a robust price discovery process. This method typically leads to more competitive pricing as multiple vendors have the opportunity to bid.

Taxpayer Impact: The use of a competitive process for this significant task order is expected to yield fair market value for taxpayers.

Public Impact

Ensures continuity of essential telecommunications services for the National Weather Service. Supports critical weather forecasting and dissemination of public safety information. Modernizes NWS telecommunications infrastructure through the EIS program. Potential for improved network reliability and performance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment introduces potential for cost increases beyond initial estimates.
Reliance on a single vendor (Verizon) for a critical service.

Positive Signals

Awarded under a competitive IDIQ contract.
Supports a vital government function (National Weather Service).
Fixed-price element provides some cost control.

Sector Analysis

This award falls within the Wired Telecommunications Carriers sector, a critical component of government IT infrastructure. Spending in this sector is substantial, and competitive IDIQ vehicles like EIS are designed to streamline procurement and achieve better pricing.

Small Business Impact

The data indicates this task order was not set aside for small businesses and was awarded to a large business (Verizon). There is no specific information provided regarding small business participation in the subcontracting plan.

Oversight & Accountability

The use of the EIS IDIQ contract implies established oversight mechanisms. However, ongoing monitoring of performance and cost adjustments under the economic price adjustment clause will be crucial for accountability.

Related Government Programs

Wired Telecommunications Carriers
Department of Commerce Contracting
National Oceanic and Atmospheric Administration Programs

Risk Flags

Potential for cost overruns due to economic price adjustment.
Dependency on a single large vendor for critical infrastructure.
Lack of specific detail on small business subcontracting.
Performance risks associated with large-scale telecommunications transitions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $16.8 million to VERIZON BUSINESS NETWORK SERVICES LLC. THIS IS A FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT TASK ORDER FOR THE NATIONAL WEATHER SERVICE FOR TELECOMMUNICATIONS INFRASTRUCTURE TRANSITION TO THE ENTERPRISE INFRASTRUCTURE SOLUTIONS (EIS) IDIQ CONTRACT.

Who is the contractor on this award?

The obligated recipient is VERIZON BUSINESS NETWORK SERVICES LLC.

Which agency awarded this contract?

Awarding agency: Department of Commerce (National Oceanic and Atmospheric Administration).

What is the total obligated amount?

The obligated amount is $16.8 million.

What is the period of performance?

Start: 2024-07-01. End: 2026-06-30.

What is the expected impact of the economic price adjustment on the total contract cost over its 729-day duration?

The economic price adjustment (EPA) clause allows for modifications to the contract price based on fluctuations in specific economic factors, such as inflation or changes in labor and material costs. While the base price is fixed, the EPA introduces uncertainty regarding the final cost. The actual impact will depend on the specific indices used in the EPA and the prevailing economic conditions over the contract period. Detailed analysis of historical EPA trends for similar telecommunications contracts would be needed to quantify potential cost increases.

How does the competitive landscape within the EIS IDIQ influence the pricing and service levels for this specific task order?

The EIS IDIQ was awarded through a full and open competition, establishing a pool of qualified vendors. This task order, also competed under full and open terms, likely benefited from this pre-existing competition. The availability of multiple vendors capable of meeting the NWS's requirements within the EIS framework should have driven competitive pricing and encouraged strong service level commitments from Verizon to secure the award.

What are the key performance indicators (KPIs) and service level agreements (SLAs) in place to ensure the effectiveness of this telecommunications infrastructure transition?

While specific KPIs and SLAs are not detailed in the provided data, task orders under the EIS IDIQ typically include stringent performance requirements. For the NWS, these would likely focus on network uptime, latency, bandwidth availability, and response times for issue resolution. Effective monitoring and reporting against these SLAs are crucial for ensuring the transition meets the operational needs of the National Weather Service and provides reliable communication.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers

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: 4

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: Verizon Maryland LLC

Address: 22001 LOUDOUN COUNTY PKWY, ASHBURN, VA, 20147

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

Financial Breakdown

Contract Ceiling: $77,809,917

Exercised Options: $20,723,452

Current Obligation: $16,770,935

Actual Outlays: $2,624,138

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q17NSD3009

IDV Type: IDC

Timeline