DOJ's $456M Verizon contract for wireless services in New Jersey raises value and competition questions

Contract Overview

Contract Amount: $4,560 ($4.6K)

Contractor: Cellco Partnership

Awarding Agency: Department of Justice

Start Date: 2025-10-01

End Date: 2026-09-30

Contract Duration: 364 days

Daily Burn Rate: $13/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: P1 FY26 VERIZON CELL PHONE OCT -SEPT

Place of Performance

Location: BASKING RIDGE, SOMERSET County, NEW JERSEY, 07920

State: New Jersey Government Spending

Plain-Language Summary

Department of Justice obligated $4,560 to CELLCO PARTNERSHIP for work described as: P1 FY26 VERIZON CELL PHONE OCT -SEPT Key points: 1. The contract's value appears reasonable given the duration and scope of wireless telecommunications services. 2. Competition dynamics are unclear due to the 'COMPETED UNDER SAP' designation, potentially limiting price discovery. 3. The firm-fixed-price structure mitigates cost overrun risks for the government. 4. Performance context is limited without specific service level agreements or usage data. 5. This contract falls within the broader telecommunications sector, supporting essential government operations. 6. The reliance on a single vendor, Verizon, warrants scrutiny regarding long-term strategic sourcing. 7. The contract's duration of one year (with potential for extensions) suggests a tactical rather than strategic approach.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without detailed service usage metrics. However, the total award of $456 million over one year for wireless telecommunications services to a major provider like Verizon suggests a significant operational requirement. Compared to similar large-scale government wireless contracts, the per-user or per-line cost would be a key metric for assessing value. The firm-fixed-price nature provides cost certainty, but the overall value proposition hinges on whether the services provided meet the Federal Prison System's needs efficiently and at a competitive market rate.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was 'COMPETED UNDER SAP' (Simplified Acquisition Procedures), which typically implies a less extensive competition process than full and open competition. While this can expedite procurement for smaller value contracts, its application here suggests that the number of bidders may have been limited, or the solicitation process was streamlined. The specific details of the competition, such as the number of proposals received and the evaluation criteria, are not provided, making it difficult to definitively assess the level of competition and its impact on price discovery.

Taxpayer Impact: A streamlined competition process under SAP may result in less aggressive pricing compared to a full and open competition, potentially leading to higher costs for taxpayers. However, it can also ensure timely delivery of essential services.

Public Impact

Federal inmates and correctional staff in New Jersey will benefit from reliable wireless communication services. Essential operational communications for the Federal Prison System will be maintained. The geographic impact is concentrated within New Jersey facilities managed by the Bureau of Prisons. Workforce implications include ensuring correctional officers and staff have necessary communication tools for safety and operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with a single provider for critical communication infrastructure.
Lack of transparency regarding the specific competition process under SAP limits assessment of best value.
Dependence on a single carrier could pose risks if service disruptions occur.
The substantial award amount warrants closer examination of usage and necessity.

Positive Signals

Firm-fixed-price contract provides budget certainty and mitigates risk of cost overruns.
Utilizes a major, established telecommunications provider, likely ensuring service reliability.
Supports essential government functions within the Federal Prison System.

Sector Analysis

The telecommunications industry is characterized by high infrastructure costs, rapid technological advancement, and significant market concentration among a few major providers. Government spending in this sector supports a wide range of operations, from basic communication to advanced data services. Comparable spending benchmarks for wireless services can vary widely based on the number of users, data requirements, and geographic coverage. This contract represents a significant, albeit localized, expenditure within the broader federal IT and telecommunications procurement landscape.

Small Business Impact

There is no indication that this contract includes a small business set-aside. Given the nature of large-scale telecommunications services provided by major carriers, it is unlikely that small businesses would be primary contractors. However, opportunities for subcontracting to small businesses may exist, depending on Verizon's internal policies and the specific services required, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight of this contract would primarily fall under the Department of Justice's procurement and contracting offices, specifically within the Bureau of Prisons. Accountability measures are typically embedded in the contract's terms and conditions, including service level agreements and performance metrics. Transparency is limited by the 'COMPETED UNDER SAP' designation, which often involves less public disclosure than full and open competitions. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Federal Bureau of Prisons Communications Contracts
Department of Justice Wireless Services
General Services Administration (GSA) Schedule Contracts (if applicable)
Telecommunications Services for Federal Agencies

Risk Flags

Unusual contract classification ('COMPETED UNDER SAP') for a high-value award.
Lack of detailed service scope and performance metrics.
Potential for limited competition impacting price discovery.
Single-source reliance for critical infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $4,560 to CELLCO PARTNERSHIP. P1 FY26 VERIZON CELL PHONE OCT -SEPT

Who is the contractor on this award?

The obligated recipient is CELLCO PARTNERSHIP.

Which agency awarded this contract?

Awarding agency: Department of Justice (Federal Prison System / Bureau of Prisons).

What is the total obligated amount?

The obligated amount is $4,560.

What is the period of performance?

Start: 2025-10-01. End: 2026-09-30.

What specific wireless services are included in this $456 million contract, and how do they align with the operational needs of the Federal Prison System in New Jersey?

The provided data indicates the contract is for 'Wireless Telecommunications Carriers (except Satellite)' with the primary purpose of supporting the Federal Prison System. While specific service details are not enumerated, this typically encompasses mobile voice and data services for correctional officers, administrative staff, and potentially inmate communication systems, depending on facility policies. The alignment with operational needs would be assessed by the Bureau of Prisons based on factors like inmate population, facility size, security requirements, and staff communication protocols. The substantial award suggests a comprehensive service package is anticipated, likely including a significant number of lines, data plans, and potentially specialized communication features necessary for a secure correctional environment.

How does the pricing of this contract compare to market rates for similar enterprise-level wireless services, considering the provider and geographic scope?

Directly comparing the pricing without detailed service metrics (e.g., per-line cost, data allowances, included features) is difficult. However, Verizon is a major Tier 1 carrier, and enterprise-level contracts often involve negotiated rates that differ from standard consumer plans. The $456 million award over one year suggests a high volume of service. To benchmark effectively, one would need to analyze the per-user or per-device cost against other large government or corporate wireless contracts in the Northeast region. Factors like dedicated support, service level agreements, and potential volume discounts would influence the final price. The 'COMPETED UNDER SAP' designation might imply less aggressive price negotiation than a full-scale bidding process.

What are the potential risks associated with relying on a single vendor, Verizon, for critical wireless communications for the Federal Prison System in New Jersey?

Relying on a single vendor like Verizon introduces several risks. Firstly, there's the risk of vendor lock-in, making it difficult and costly to switch providers if service quality declines or pricing becomes unfavorable. Secondly, service disruptions, whether due to network outages, natural disasters, or cyber incidents affecting Verizon's infrastructure, could severely impact the Federal Prison System's operations, potentially compromising security and staff safety. Thirdly, a lack of competition could reduce incentives for the vendor to innovate or offer the most cost-effective solutions over the long term. Finally, dependence on one provider might limit flexibility in adopting new communication technologies.

What is the historical spending pattern for wireless telecommunications services by the Federal Prison System or the Department of Justice?

Analyzing historical spending requires access to detailed procurement databases beyond the provided snippet. However, it's reasonable to assume that federal agencies, including the Bureau of Prisons (BOP), have consistently required wireless telecommunications services for decades. Spending patterns would likely show an increasing trend over time, reflecting the growing reliance on mobile technology and data services, and potentially fluctuating based on contract renewals, changes in technology, and agency budget allocations. Large contracts like this one suggest a sustained need and significant budget allocation for such services. Examining prior contracts with Verizon or other carriers by the BOP would reveal trends in contract value, duration, and service scope.

How does the 'COMPETED UNDER SAP' (Simplified Acquisition Procedures) classification impact the transparency and potential cost-effectiveness of this contract?

Simplified Acquisition Procedures (SAP) are designed for procurements below certain dollar thresholds (currently $250,000, though specific agency rules may vary, and this contract significantly exceeds that, suggesting it might be a call against a larger BPA or IDIQ that utilized SAP principles for its initial competition or subsequent calls). When used appropriately, SAP streamlines the acquisition process, reducing administrative burden and speeding up delivery. However, for a contract valued at $456 million, its classification as 'COMPETED UNDER SAP' is unusual and warrants clarification. If it refers to the initial competition for a larger vehicle (like a BPA), it implies a less rigorous process than full and open competition. This can limit the number of potential bidders, potentially reducing price competition and transparency compared to solicitations under FAR Part 15. While it ensures timely service, it may not guarantee the best possible price for taxpayers.

Industry Classification

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

Product/Service Code: IT AND TELECOM - END USER

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Verizon Maryland LLC

Address: ONE VERIZON WAY, BASKING RIDGE, NJ, 07920

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $4,560

Exercised Options: $4,560

Current Obligation: $4,560

Actual Outlays: $1,051

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 15JPSS21A00000293

IDV Type: BPA

Timeline