Commerce Dept Awards $8.47M for VPN Services to Verizon, Ending Feb 2026
Contract Overview
Contract Amount: $8,467,910 ($8.5M)
Contractor: Verizon Business Network Services LLC
Awarding Agency: Department of Commerce
Start Date: 2021-02-18
End Date: 2026-05-31
Contract Duration: 1,928 days
Daily Burn Rate: $4.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: VPN SERVICES
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20230
Plain-Language Summary
Department of Commerce obligated $8.5 million to VERIZON BUSINESS NETWORK SERVICES LLC for work described as: VPN SERVICES Key points: 1. Significant contract value of $8.47 million over its term. 2. Verizon Business Network Services LLC is the incumbent provider. 3. Potential risk associated with long-term reliance on a single vendor. 4. Spending falls under Wired Telecommunications Carriers (NAICS 517110).
Value Assessment
Rating: good
The contract's pricing is considered good given the duration and scope of VPN services. Benchmarking against similar large-scale telecommunications contracts suggests competitive rates.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating a robust price discovery process. This method likely ensured competitive pricing for the VPN services.
Taxpayer Impact: Taxpayers benefit from competitive pricing achieved through an open bidding process for essential telecommunications infrastructure.
Public Impact
Ensures secure remote access for Department of Commerce employees. Supports critical government operations and data protection. Provides essential connectivity for a large federal agency.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long-term contract duration may limit future cost-saving opportunities.
- Vendor lock-in could reduce flexibility in adopting new technologies.
Positive Signals
- Awarded through full and open competition.
- Provides essential IT infrastructure for a major agency.
Sector Analysis
This spending falls within the IT and Telecommunications sector, specifically Wired Telecommunications Carriers. Benchmarks for similar federal VPN service contracts vary widely based on scale and security requirements.
Small Business Impact
The contract was awarded to a large business (Verizon Business Network Services LLC) and does not indicate any specific set-asides or participation for small businesses.
Oversight & Accountability
The contract is managed by the Department of Commerce's Office of the Secretary. Oversight would involve ensuring service delivery, adherence to terms, and financial accountability.
Related Government Programs
- Wired Telecommunications Carriers
- Department of Commerce Contracting
- Office of the Secretary Programs
Risk Flags
- Long contract duration
- Potential for vendor lock-in
- Reliance on a single provider for critical services
Tags
wired-telecommunications-carriers, department-of-commerce, dc, delivery-order, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Commerce awarded $8.5 million to VERIZON BUSINESS NETWORK SERVICES LLC. VPN SERVICES
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 (Office of the Secretary).
What is the total obligated amount?
The obligated amount is $8.5 million.
What is the period of performance?
Start: 2021-02-18. End: 2026-05-31.
What is the estimated annual cost of these VPN services?
The total contract value is $8,467,910.32 over approximately 62 months (February 2021 to May 2026). This averages to roughly $1.66 million per year. This figure represents the total potential cost and actual spending may vary based on usage and specific service orders.
What are the primary risks associated with this contract?
Key risks include potential vendor lock-in, limiting the agency's ability to switch to more cost-effective or technologically advanced solutions in the future. The long-term nature also means the agency is exposed to potential price increases upon renewal or if service needs change significantly.
How does this contract ensure effective service delivery?
Effectiveness is likely ensured through the firm fixed-price contract type, which incentivizes the vendor to deliver services within budget. Performance metrics and service level agreements (SLAs) within the contract, managed by the Office of the Secretary, would also be crucial for monitoring and ensuring effective delivery.
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: 5
Pricing Type: FIRM FIXED PRICE (J)
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: $8,467,910
Exercised Options: $8,467,910
Current Obligation: $8,467,910
Actual Outlays: $6,853,062
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
Start Date: 2021-02-18
Current End Date: 2026-05-31
Potential End Date: 2031-05-31 00:00:00
Last Modified: 2026-02-23
More Contracts from Verizon Business Network Services LLC
- Centralized HHS EIS Requirement — $398.5M (Department of Health and Human Services)
- Enterprise Infrastructure Solutions (EIS) Program - SSA Data Network Services (ssanet) — $283.5M (Social Security Administration)
- THE Tfcceis Task Order IS to Transition the Existing Tfcc Services From the Networx Contract Onto the EIS Contract Vehicle in a Manner That Will Enable Continuity of an Enterprise Network of Toll Free Services for the IRS — $264.6M (Department of the Treasury)
- National Security and Emergency Preparedness (ns/Ep) Priority Service (PS) With Verizon Business Services — $205.1M (Department of Defense)
- Toll Free Contact Center (tfcc)-Verizon-Exercise Option Period 1 YR 3 — $192.8M (Department of the Treasury)
View all Verizon Business Network Services LLC federal contracts →
Other Department of Commerce Contracts
- THE Purpose of This Contract IS to Develop the Ground System That Will Support Noaa S Next Generation Geostationary Satellite Series, Goes-R. This NEW Series of Spacecraft, SET to Begin Launching in 2015, IS Expected to Double the Clarity of Today S Satellite Imagery and Provide AT Least 20 Times More Atmospheric Observations From Space. the Contractor IS to Design, Develop, Test and Implement the Goes-R Ground System. the Ground System Will Capture Data From the Goes-R Satellites, and Process and Distribute the Information to Operational Users — $1.8B (L3harris Technologies, Inc.)
- Engineering Services and Development Leading to the Delivery of the Jpss Common Ground System Instrument and Support — $1.6B (Raytheon Company)
- Enterprise Solutions Framework (ESF) for Multi-Tiered Acquisition Framework for Systems Engineering and Integration - Program Tier Work Order 003 - 2020 Census Technical Integrator — $1.5B (T-Rex Solutions LLC)
- THE Goal of the Decennial Response Integration System (dris) Contract IS to Obtain a Practical Solution to Providing Respondent Assistance and Data Capture for the 2010 Census — $930.7M (Lockheed Martin Services, LLC)
- 2020 Census Questionnaire Assistance (2020 CQA) — $918.3M (Maximus Federal Services, Inc.)