Treasury's IRS Spends $62.5M on Wired Telecom Services with AT&T, Lacking Competition
Contract Overview
Contract Amount: $62,532,799 ($62.5M)
Contractor: AT&T Enterprises, LLC
Awarding Agency: Department of the Treasury
Start Date: 2018-10-01
End Date: 2019-09-30
Contract Duration: 364 days
Daily Burn Rate: $171.8K/day
Competition Type: NOT COMPETED UNDER SAP
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: CONTINUATION OF WR 0257. SUBJECT TO AVAILABILITY OF FUNDS. FY 19 ATTB BUREAU CIRCUIT COSTS 10/01/2018-09/30/2019.
Place of Performance
Location: VIENNA, FAIRFAX County, VIRGINIA, 22185
State: Virginia Government Spending
Plain-Language Summary
Department of the Treasury obligated $62.5 million to AT&T ENTERPRISES, LLC for work described as: CONTINUATION OF WR 0257. SUBJECT TO AVAILABILITY OF FUNDS. FY 19 ATTB BUREAU CIRCUIT COSTS 10/01/2018-09/30/2019. Key points: 1. Significant spending on essential telecommunications infrastructure. 2. Sole-source award raises concerns about price discovery and value. 3. Limited competition may lead to higher costs for taxpayers. 4. Sector benchmarks for IT services suggest potential for cost savings.
Value Assessment
Rating: questionable
The $62.5M contract for wired telecommunications is a substantial investment. Without competitive bidding, it's difficult to assess if the price is optimal compared to market rates for similar services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not competed under Simplified Acquisition Procedures (SAP) and was awarded as a BPA Call, indicating limited competition. This lack of a competitive process hinders price discovery and may result in a less favorable price for the government.
Taxpayer Impact: Taxpayers may be overpaying due to the absence of competitive bidding, as the government did not explore alternative vendors or negotiate based on multiple offers.
Public Impact
Essential communication services for the IRS are secured. Potential for higher costs impacts taxpayer funds. Lack of transparency in the procurement process.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- Potential Overpricing
- Limited Transparency
Positive Signals
- Essential Service Provision
- Established Vendor Relationship
Sector Analysis
The IT services sector, particularly telecommunications, is highly competitive. Benchmarks for similar wired telecommunications services often show a wide range of pricing based on service level agreements and contract terms. The $62.5M for a one-year period warrants scrutiny against industry standards.
Small Business Impact
The data does not indicate any specific provisions or considerations for small businesses in this procurement. The award to AT&T suggests a focus on large, established providers for this telecommunications requirement.
Oversight & Accountability
The award method (BPA Call, not competed under SAP) suggests that oversight may have been focused on administrative efficiency rather than rigorous competition. Further review of the justification for limited competition is recommended.
Related Government Programs
- Wired Telecommunications Carriers
- Department of the Treasury Contracting
- Internal Revenue Service Programs
Risk Flags
- Lack of competitive bidding
- Potential for inflated pricing
- Limited transparency in award process
- No indication of small business participation
Tags
wired-telecommunications-carriers, department-of-the-treasury, va, bpa-call, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $62.5 million to AT&T ENTERPRISES, LLC. CONTINUATION OF WR 0257. SUBJECT TO AVAILABILITY OF FUNDS. FY 19 ATTB BUREAU CIRCUIT COSTS 10/01/2018-09/30/2019.
Who is the contractor on this award?
The obligated recipient is AT&T ENTERPRISES, LLC.
Which agency awarded this contract?
Awarding agency: Department of the Treasury (Internal Revenue Service).
What is the total obligated amount?
The obligated amount is $62.5 million.
What is the period of performance?
Start: 2018-10-01. End: 2019-09-30.
What was the justification for not competing this significant telecommunications contract?
The provided data indicates the contract was 'NOT COMPETED UNDER SAP' and awarded as a 'BPA CALL'. A thorough review would require access to the contract file to understand the specific justification, such as existing contract vehicles, urgent needs, or unique capabilities that precluded full and open competition.
How does the $62.5M cost compare to industry benchmarks for similar wired telecommunications services?
Without detailed service level agreements and specific network configurations, a precise benchmark is difficult. However, $62.5M for a single year of wired telecommunications for one agency is substantial. Industry benchmarks for large-scale enterprise telecommunications often vary widely, but a lack of competition suggests this price may not be optimized.
What is the potential risk to taxpayer funds due to the limited competition?
The primary risk is that the government may have paid a premium for these services. Limited competition often leads to higher prices than would be achieved in a robustly contested procurement, directly impacting the efficient use of taxpayer dollars.
Industry Classification
NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: NOT COMPETED UNDER SAP
Solicitation Procedures: SIMPLIFIED ACQUISITION
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: AT&T Inc. (UEI: 108024050)
Address: 3033 CHAIN BRIDGE RD, OAKTON, VA, 22185
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $306,671,109
Exercised Options: $251,229,722
Current Obligation: $62,532,799
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Parent Contract
Parent Award PIID: TIRNO09Z00017
IDV Type: BPA
Timeline
Start Date: 2018-10-01
Current End Date: 2019-09-30
Potential End Date: 2020-09-30 08:54:06
Last Modified: 2020-04-02
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