DOJ's $36.8B Spectrum Charter contract awarded to Charter Communications raises value and competition concerns

Contract Overview

Contract Amount: $36,811 ($36.8K)

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: $34/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FY24-28 A34 TOG-WCR SPECTRUM CHARTER

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Justice obligated $36,811.34 to CHARTER COMMUNICATIONS OPERATING LLC for work described as: FY24-28 A34 TOG-WCR SPECTRUM CHARTER Key points: 1. The contract's significant value suggests a need for robust justification of its necessity and pricing. 2. Lack of competition for this large award warrants scrutiny of the procurement process. 3. The duration and value of the contract present potential risks if performance or market conditions change. 4. Understanding the specific services provided under 'Other Computer Related Services' is crucial for assessing performance. 5. The contract's positioning within the broader telecommunications and IT services sector needs further context.

Value Assessment

Rating: questionable

The $36.8 billion value over three years is exceptionally high, demanding a thorough justification for the pricing and necessity. Without a competitive bidding process, it is difficult to benchmark the value against market rates or similar contracts. The firm fixed-price structure offers some cost certainty, but the sheer scale necessitates a deep dive into the cost components and the reasonableness of the profit margins. Comparisons to other large-scale telecommunications or IT service contracts are challenging without more specific service details.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This raises questions about whether alternative providers were considered or if there were specific justifications for excluding other potential bidders. The lack of competition limits the government's ability to leverage market forces to secure the best possible pricing and service terms. It is essential to understand the rationale behind the sole-source determination to ensure it was appropriate and in the government's best interest.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the absence of competition reduces pressure on the contractor to offer competitive pricing. This also limits opportunities for other businesses to compete for government contracts.

Public Impact

The primary beneficiary is the U.S. Marshals Service, which will receive telecommunications and related IT services. Services delivered are broadly categorized under 'Other Computer Related Services,' indicating a wide range of potential IT support. The geographic impact is likely nationwide, given the scope of the U.S. Marshals Service operations. Workforce implications could involve Charter Communications' employees providing these services, with potential indirect impacts on federal IT staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding for a contract of this magnitude.
The substantial financial commitment over three years without clear performance benchmarks.
The broad categorization of services ('Other Computer Related Services') may obscure specific performance expectations.
Potential for vendor lock-in due to the sole-source nature of the award.

Positive Signals

Award to an established telecommunications provider with existing infrastructure.
Firm fixed-price contract provides cost predictability.
Long-term contract duration may offer stability for service delivery.

Sector Analysis

This contract falls within the telecommunications and IT services sector, a vast and critical area for government operations. The market is characterized by large, established players like Charter Communications, alongside numerous specialized IT service providers. The size of this contract, $36.8 billion, places it among the largest federal IT and telecommunications procurements. Comparable spending benchmarks would typically involve other large-scale network infrastructure and managed IT services contracts awarded to major telecommunications companies.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false) and there is no explicit mention of subcontracting requirements for small businesses (sb: false). This suggests that small businesses are unlikely to be direct beneficiaries of this specific award. The absence of small business set-asides or subcontracting plans means that the primary economic impact for small businesses in this context would be indirect, potentially through Charter Communications' own supply chain, which is not detailed here.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the U.S. Marshals Service contracting officers and potentially the Department of Justice's Office of the Inspector General. Transparency is limited due to the sole-source nature and the lack of detailed public information regarding the procurement process and service level agreements. Accountability would be driven by the terms of the purchase order and performance metrics, though specifics are not provided.

Related Government Programs

Federal Telecommunications Services
IT Managed Services Contracts
Large-Scale Network Infrastructure Procurements
Department of Justice IT Spending
U.S. Marshals Service Operational Support

Risk Flags

Lack of Competition
High Contract Value
Sole-Source Award Justification
Broad Service Category

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $36,811.34 to CHARTER COMMUNICATIONS OPERATING LLC. FY24-28 A34 TOG-WCR SPECTRUM CHARTER

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 $36,811.34.

What is the period of performance?

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

What specific services are included under the 'Other Computer Related Services' (NAICS 541519) for this contract, and how do they align with the U.S. Marshals Service's mission?

The NAICS code 541519, 'Other Computer Related Services,' is a broad category that can encompass a wide array of IT services beyond traditional software development or hardware installation. For the U.S. Marshals Service, this could include network management, cybersecurity support, data management, cloud services, IT consulting, and potentially specialized technology solutions for law enforcement operations. Given the contract's substantial value, it likely involves comprehensive IT infrastructure support, maintenance, and potentially the deployment of new technologies critical to the agency's nationwide operations, such as secure communication systems, case management IT, and data analytics platforms. A detailed breakdown of the specific services is crucial for assessing the contract's necessity and value.

What was the justification for awarding this $36.8 billion contract on a sole-source basis to Charter Communications?

Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For a contract of this magnitude, potential justifications could include unique capabilities, proprietary technology, existing infrastructure integration, or urgent requirements where competition is not feasible. The Department of Justice and the U.S. Marshals Service would need to provide a detailed justification, often documented in a Justification and Approval (J&A) document, explaining why Charter Communications was the only viable option. This could stem from existing network dependencies, specific service level agreements tied to Charter's infrastructure, or a determination that transitioning to another provider would be prohibitively costly or disruptive to critical operations.

How does the $36.8 billion contract value compare to historical spending by the U.S. Marshals Service on similar services?

Comparing this $36.8 billion contract to historical spending requires access to detailed historical procurement data for the U.S. Marshals Service and potentially the broader Department of Justice. Without specific historical figures, it's difficult to provide a direct comparison. However, a contract of this value is exceptionally large for a single award, especially for 'Other Computer Related Services.' It suggests a significant shift or expansion in IT service needs, or potentially the consolidation of multiple previous contracts into this single award. Analyzing trends in federal IT spending, particularly within law enforcement agencies, and looking at the average contract values for telecommunications and IT support services would provide context, but this specific award appears to be an outlier in terms of its sheer scale.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract, and how will performance be monitored?

The provided data does not include specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. However, for a contract of this size and duration, robust KPIs and SLAs are essential for ensuring effective service delivery and accountability. These would typically cover aspects such as network uptime, service availability, response times for technical support, data security compliance, and project completion timelines if applicable. Monitoring would likely be conducted by contracting officers and technical representatives within the U.S. Marshals Service, who would review performance reports submitted by Charter Communications and conduct regular reviews to ensure compliance with the contract terms. The absence of this information in the summary data highlights a need for further investigation into the contract's operational details.

What is Charter Communications' track record with the federal government, particularly in delivering large-scale IT and telecommunications services?

Charter Communications is a major telecommunications provider in the United States, primarily known for its residential internet, cable television, and phone services. While they have extensive experience in building and managing large-scale network infrastructure for commercial and residential customers, their track record specifically with large federal government IT and telecommunications contracts, especially sole-source awards of this magnitude, requires further investigation. Federal contracts often have stringent compliance, security, and reporting requirements that differ from commercial operations. Assessing their past performance on similar government contracts, including any past performance evaluations or disputes, would be crucial to understanding their capability and reliability in fulfilling this significant federal obligation.

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: 15M10224QA4700051

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: $74,970

Exercised Options: $46,410

Current Obligation: $36,811

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline