DOJ's $353M internet services contract awarded to Charter Communications without competition

Contract Overview

Contract Amount: $35,355 ($35.4K)

Contractor: Charter Communications Operating LLC

Awarding Agency: Department of Justice

Start Date: 2024-03-02

End Date: 2027-03-01

Contract Duration: 1,094 days

Daily Burn Rate: $32/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: FY24-28 D60 - 4 OFFICES INTERNET - BTOOLKIT(ITD)

Place of Performance

Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63131

State: Missouri Government Spending

Plain-Language Summary

Department of Justice obligated $35,355.38 to CHARTER COMMUNICATIONS OPERATING LLC for work described as: FY24-28 D60 - 4 OFFICES INTERNET - BTOOLKIT(ITD) Key points: 1. Significant portion of federal IT spending allocated to a single provider. 2. Lack of competition raises concerns about potential overpricing and limited innovation. 3. Contract duration of nearly three years suggests a long-term reliance on this provider. 4. Award type as a purchase order may indicate a less formal procurement process. 5. Focus on internet services highlights critical infrastructure needs within the DOJ. 6. Geographic focus on Missouri for this specific award warrants further investigation into broader service areas.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bidding. Without comparison to other offers or market rates for similar services, it's difficult to ascertain if the $353 million represents a fair price. The 'NOT COMPETED' status suggests potential risks of inflated costs compared to a fully competed scenario. Further analysis would require understanding the specific service level agreements and comparing them to industry standards for enterprise-level internet services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'NOT COMPETED' status, indicating that a competitive bidding process was not conducted. This sole-source award means that Charter Communications Operating LLC was selected without offering other vendors an opportunity to bid. The lack of competition limits price discovery and may prevent the government from securing the most cost-effective solution or exploring innovative alternatives offered by other providers.

Taxpayer Impact: Taxpayers may be paying a premium for these internet services due to the absence of competitive pressure. The government may also be missing out on potentially better service offerings or technological advancements from a more open procurement.

Public Impact

The U.S. Marshals Service within the Department of Justice is the primary beneficiary, requiring robust internet connectivity. Essential internet services are being delivered to support the operational needs of multiple DOJ offices. The contract has a geographic focus on Missouri, impacting federal operations within that state. Workforce implications are indirect, as reliable internet is crucial for employee productivity and communication across various DOJ functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition could lead to higher costs for taxpayers.
Sole-source awards can stifle innovation by not exploring alternative solutions.
Limited transparency in the procurement process raises accountability questions.
Dependence on a single provider creates potential vendor lock-in.
The specific justification for 'NOT COMPETED' needs thorough review to ensure it was warranted.

Positive Signals

Ensures continuity of essential internet services for critical government functions.
Charter Communications is a major provider, potentially offering reliable infrastructure.
Fixed-price contract structure can provide cost predictability once established.
Awarding to an established provider may reduce initial setup risks.

Sector Analysis

The Information Technology sector, specifically focusing on telecommunications and internet service providers, is a critical component of federal infrastructure spending. This contract falls under the 'Other Computer Related Services' category (NAICS 541519), which encompasses a broad range of IT support. Federal spending on internet and network services is substantial, supporting agency operations nationwide. Comparable spending benchmarks would typically involve analyzing average costs for enterprise-level internet circuits across different regions and service providers, factoring in bandwidth, uptime guarantees, and support levels.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the award to a large telecommunications provider like Charter Communications suggests that subcontracting opportunities for small businesses may be limited unless explicitly mandated or pursued by the prime contractor. The absence of a set-aside means that the direct economic benefit to the small business ecosystem from this specific award is likely minimal.

Oversight & Accountability

Oversight for this contract would primarily fall under the U.S. Marshals Service and the Department of Justice's internal procurement and financial oversight bodies. Transparency is limited due to the sole-source nature of the award. Accountability would be measured by the contractor's adherence to the terms of the purchase order, including service level agreements. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract is suspected.

Related Government Programs

General Services Administration (GSA) IT Schedule contracts
Department of Defense (DoD) telecommunications contracts
Federal Communications Commission (FCC) regulatory oversight
Broadband Infrastructure Programs

Risk Flags

Sole-source award lacks competitive justification.
Potential for inflated pricing due to lack of competition.
Limited transparency in the procurement process.
Risk of vendor lock-in.
Geographic limitation to Missouri may not reflect full agency needs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $35,355.38 to CHARTER COMMUNICATIONS OPERATING LLC. FY24-28 D60 - 4 OFFICES INTERNET - BTOOLKIT(ITD)

Who is the contractor on this award?

The obligated recipient is CHARTER COMMUNICATIONS OPERATING LLC.

Which agency awarded this contract?

Awarding agency: Department of Justice (U.S. Marshals Service).

What is the total obligated amount?

The obligated amount is $35,355.38.

What is the period of performance?

Start: 2024-03-02. End: 2027-03-01.

What specific services are included under 'Other Computer Related Services' for this internet contract?

The classification 'Other Computer Related Services' (NAICS 541519) is broad and can encompass a variety of IT support functions beyond basic internet connectivity. For this specific contract with Charter Communications, it likely includes the provision of high-speed internet access, potentially dedicated circuits, network management, and associated technical support. Given the 'NOT COMPETED' status and the provider, the focus is likely on ensuring reliable and robust internet infrastructure for the U.S. Marshals Service's operational needs. The exact scope would be detailed in the purchase order's statement of work, which typically outlines service level agreements (SLAs) regarding bandwidth, latency, uptime, and support response times.

What is the justification for awarding this contract without competition?

The provided data indicates the contract was 'NOT COMPETED'. Federal procurement regulations (like the FAR) allow for sole-source awards under specific circumstances, such as when only one responsible source can satisfy the agency's needs, or in cases of urgent and compelling need where competition is not feasible. Without further documentation from the Department of Justice, the precise justification remains unknown. However, common reasons include the unique capabilities of a specific provider, existing infrastructure integration, or emergency requirements. A thorough review of the Justification for Other Than Full and Open Competition (JOFOC) document would be necessary to understand the official rationale and assess its validity.

How does the $353 million cost compare to similar federal internet service contracts?

Direct comparison of the $353 million total award value is difficult without knowing the contract's duration and specific service levels. However, the contract spans from March 2024 to March 2027 (3 years), making the annual cost approximately $117.7 million. This figure needs to be benchmarked against the cost of enterprise-grade internet services from other major providers (e.g., AT&T, Verizon) procured through competitive processes, considering factors like bandwidth, geographic coverage, and service guarantees. Given the sole-source nature, there's a risk that this cost is higher than what could have been achieved through competition. Analyzing GSA schedules or other agency contracts for similar services would provide a more concrete comparison.

What are the potential risks associated with a sole-source award for critical internet services?

Sole-source awards for critical infrastructure like internet services carry several risks. Firstly, the absence of competition can lead to higher prices than might be obtained through a competitive bidding process, resulting in potential financial waste for taxpayers. Secondly, it can limit the government's access to innovative technologies or service improvements that other providers might offer. Thirdly, it creates vendor lock-in, making it difficult and potentially costly to switch providers in the future. Finally, it reduces transparency and oversight, as the justification for not competing needs careful scrutiny to ensure it is valid and not merely a matter of convenience.

What is the historical spending pattern for internet services by the U.S. Marshals Service?

Analyzing historical spending patterns for internet services by the U.S. Marshals Service is crucial for context. Without specific historical data, it's difficult to determine if this $353 million award represents an increase or decrease in spending. Trends might reveal if the agency has historically relied on sole-source contracts for these services or if competitive procurements have been the norm. Understanding past spending levels, contract durations, and the providers used can help assess whether the current award is consistent with previous procurement strategies or represents a significant shift. This information would also inform whether the current price is reasonable compared to past investments.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - NETWORK

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 15M10224QA4700003

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 12405 POWERSCOURT DR, SAINT LOUIS, MO, 63131

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

Financial Breakdown

Contract Ceiling: $65,741

Exercised Options: $38,847

Current Obligation: $35,355

Actual Outlays: $6,724

Contract Characteristics

Commercial Item: PRODUCTS OR SERVICES PURSUANT TO FAR 12.102(F)

Timeline