AT&T awarded $66.9M for Treasury's wired telecommunications network services in FY21

Contract Overview

Contract Amount: $66,948,489 ($66.9M)

Contractor: AT&T Enterprises, LLC

Awarding Agency: Department of the Treasury

Start Date: 2020-10-01

End Date: 2021-09-30

Contract Duration: 364 days

Daily Burn Rate: $183.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FY21 TNET MPLS NETWROX /NON-STANDARD ORDERS

Place of Performance

Location: VIENNA, FAIRFAX County, VIRGINIA, 22185

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $66.9 million to AT&T ENTERPRISES, LLC for work described as: FY21 TNET MPLS NETWROX /NON-STANDARD ORDERS Key points: 1. Contract value represents a significant investment in essential network infrastructure. 2. Competition dynamics suggest a potentially competitive bidding process for this service. 3. Performance context is tied to the delivery of critical telecommunications for the IRS. 4. Sector positioning places this contract within the broader IT and telecommunications landscape. 5. Risk indicators may include service reliability and potential for cost overruns if not managed.

Value Assessment

Rating: good

The contract value of $66.9 million for FY21 wired telecommunications network services appears reasonable given the scope of supporting a large federal agency like the IRS. Benchmarking against similar large-scale telecommunications contracts for federal agencies would provide a more precise value-for-money assessment. The fixed-price nature of the contract offers some cost certainty, but the specific unit costs for services rendered are not detailed here. Without granular data on service components and their associated costs, a definitive assessment of pricing efficiency is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors were likely invited to bid. This approach generally fosters a competitive environment, encouraging vendors to offer their best pricing and service terms to secure the contract. The presence of multiple bidders typically leads to better price discovery and potentially lower costs for the government compared to sole-source or limited competition scenarios. The specific number of bids received would further clarify the intensity of the competition.

Taxpayer Impact: Full and open competition is favorable for taxpayers as it is designed to drive down costs through market forces, ensuring the government receives competitive pricing for essential services.

Public Impact

The Internal Revenue Service (IRS) is the primary beneficiary, receiving essential network services. Services delivered include wired telecommunications network support, crucial for agency operations. The geographic impact is primarily within Virginia, where the contract's administrative location is noted. Workforce implications may involve AT&T employees providing and maintaining these network services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if future contracts are not competitively re-bid.
Dependence on a single vendor for critical network infrastructure could pose a risk.
Ensuring service level agreements (SLAs) are met and penalties are enforced.

Positive Signals

Awarded through full and open competition, suggesting market-driven pricing.
Fixed-price contract type provides cost predictability for the government.
Long-term relationship with a major telecommunications provider can ensure stability.

Sector Analysis

This contract falls within the telecommunications services sector, specifically wired network infrastructure. The market for such services is dominated by large providers like AT&T, Verizon, and Lumen Technologies. Federal spending in this area is substantial, supporting agency operations nationwide. Comparable spending benchmarks would involve analyzing other large federal contracts for similar network services, often measured by the number of users supported or the bandwidth provided.

Small Business Impact

As this contract was awarded under full and open competition and does not explicitly mention small business set-asides, the direct impact on small businesses may be limited unless AT&T engages in significant subcontracting. Analysis of subcontracting plans would be necessary to determine the extent to which small businesses participate in fulfilling this contract's requirements. The primary awardee is a large corporation, suggesting the focus is on established providers with extensive infrastructure.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer's representative (COR) within the IRS or the Department of the Treasury. Accountability measures are embedded in the contract's terms and conditions, including performance standards and payment schedules. Transparency is facilitated through contract databases like FPDS, which record award details. Inspector General jurisdiction may apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Federal Information Technology Acquisition Reform Act (FITARA) related spending
General Services Administration (GSA) Schedules for telecommunications
IRS IT Modernization initiatives
Department of the Treasury cybersecurity spending

Risk Flags

Potential for service disruption impacting critical IRS functions.
Cybersecurity risks associated with network infrastructure.
Ensuring competitive pricing and avoiding vendor lock-in.
Compliance with evolving federal telecommunications regulations.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $66.9 million to AT&T ENTERPRISES, LLC. FY21 TNET MPLS NETWROX /NON-STANDARD ORDERS

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 $66.9 million.

What is the period of performance?

Start: 2020-10-01. End: 2021-09-30.

What is AT&T's track record with federal telecommunications contracts?

AT&T is a long-standing and major provider of telecommunications services to the federal government, holding numerous contracts across various agencies. Their track record includes providing a wide range of services, from basic voice and data to complex network infrastructure and cybersecurity solutions. Historically, AT&T has been a significant player in federal IT spending. While specific performance metrics for individual contracts are not publicly detailed here, their continued presence in the federal market suggests a generally satisfactory performance history. However, like any large contractor, they may have faced scrutiny or performance issues on specific contracts, which would be detailed in contract performance reports or IG investigations if publicly available.

How does the $66.9M contract value compare to similar federal telecommunications network contracts?

The $66.9 million contract value for FY21 wired telecommunications network services for the IRS is substantial, reflecting the scale of operations for a major federal agency. To benchmark this effectively, one would compare it to contracts awarded to other large telecommunications providers (e.g., Verizon, Lumen) for similar services to agencies of comparable size and complexity. For instance, contracts supporting the Department of Defense or other large civilian agencies often run into tens or hundreds of millions of dollars annually. Factors influencing value include the scope of services (e.g., bandwidth, number of locations, types of circuits), contract duration, and specific technologies deployed. Without detailed service breakdowns, a precise comparison is difficult, but the amount is consistent with large-scale federal network procurements.

What are the primary risks associated with this type of telecommunications contract?

Key risks include service disruptions or outages impacting IRS operations, potentially leading to significant financial and operational consequences. Another risk is vendor lock-in, where the government becomes heavily reliant on AT&T's infrastructure and services, making it difficult and costly to switch providers in the future. Cost escalation beyond the fixed price, particularly if scope creep occurs or unforeseen technical challenges arise, is also a concern, although the fixed-price nature mitigates this to some extent. Cybersecurity vulnerabilities within the network infrastructure could expose sensitive government data. Finally, ensuring compliance with evolving federal regulations and standards for telecommunications services presents an ongoing risk.

How effective is full and open competition in ensuring value for taxpayer money in this sector?

Full and open competition is generally considered the most effective method for ensuring value for taxpayer money in the telecommunications sector. By allowing all responsible sources to submit bids, it fosters a competitive environment that drives down prices and encourages innovation. Agencies can solicit proposals that meet specific technical requirements and evaluate them based on a combination of price, technical merit, and past performance. This process helps prevent monopolies or oligopolies from dictating terms and prices. However, the effectiveness relies on the agency clearly defining its needs and evaluating proposals rigorously. In complex IT and telecommunications procurements, ensuring that the lowest price technically acceptable (LPTA) doesn't sacrifice necessary quality or long-term value is crucial.

What is the historical spending trend for wired telecommunications services at the IRS or Treasury?

Historical spending on wired telecommunications services by the IRS and the broader Department of the Treasury has likely been substantial and relatively consistent, given the agency's critical functions. Federal agencies rely heavily on robust network infrastructure for daily operations, data processing, and communication. Spending trends are often influenced by technology upgrades, network modernization efforts, and changes in service requirements. While specific historical data for this exact contract is not provided, agencies like the IRS typically award multi-year contracts for core network services, often in the tens of millions of dollars annually. Trends may show a shift towards more software-defined networking (SDN) and cloud-based solutions, but traditional wired infrastructure remains essential.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: AT&T Inc.

Address: 3033 CHAIN BRIDGE RD, OAKTON, VA, 22185

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

Financial Breakdown

Contract Ceiling: $375,285,233

Exercised Options: $375,285,233

Current Obligation: $66,948,489

Actual Outlays: $66,868,281

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS00T07NSD0007

IDV Type: IDC

Timeline