VA awards $38.4M for co-located hosting, Lumen Technologies secures contract

Contract Overview

Contract Amount: $38,448,590 ($38.4M)

Contractor: Lumen Technologies Government Solutions, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2019-09-25

End Date: 2026-09-30

Contract Duration: 2,562 days

Daily Burn Rate: $15.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: CO-LOCATED HOSTING SERVICES - COMBINATION A CHICAGO, IL AND STERLING, CA

Place of Performance

Location: CHICAGO HEIGHTS, COOK County, ILLINOIS, 60411

State: Illinois Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $38.4 million to LUMEN TECHNOLOGIES GOVERNMENT SOLUTIONS, INC. for work described as: CO-LOCATED HOSTING SERVICES - COMBINATION A CHICAGO, IL AND STERLING, CA Key points: 1. Contract value of $38.4M over its period of performance. 2. Awarded under full and open competition, indicating broad market engagement. 3. Fixed-price contract type suggests predictable cost outcomes. 4. Performance period spans over 6 years, from late 2019 to late 2026. 5. The contract is for co-located hosting services in Illinois and California. 6. No small business set-aside was utilized for this award.

Value Assessment

Rating: good

The total contract value of $38.4M over approximately 6.7 years averages to about $5.7M annually. This figure needs to be benchmarked against similar co-location hosting contracts for federal agencies to fully assess value. The firm fixed-price nature provides cost certainty, which is a positive indicator for value, assuming the scope of services is well-defined and met.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The presence of two bids indicates a moderate level of competition for this specific requirement. While two bidders is better than one, a higher number of bidders typically leads to more competitive pricing and a wider range of technical solutions.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through vendor rivalry. Even with two bidders, the competitive process helps ensure the government receives a fair market price for the services rendered.

Public Impact

The Department of Veterans Affairs (VA) is the primary beneficiary, receiving essential co-located hosting services. These services are critical for maintaining the operational continuity and accessibility of VA's IT infrastructure and data. The geographic impact is focused on supporting VA operations in Illinois and California. The contract supports the IT workforce involved in managing and maintaining these hosting facilities and services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if follow-on contracts are not competitively procured.
Reliance on a single vendor for critical hosting infrastructure could pose availability risks.
Ensuring the contracted services meet evolving cybersecurity standards will be crucial.

Positive Signals

Firm fixed-price contract provides cost predictability.
Awarded through full and open competition, allowing for market-driven pricing.
Long-term contract duration allows for stable service provision and planning.

Sector Analysis

The telecommunications and data center industry is highly competitive, with numerous providers offering co-location and hosting services. Federal agencies like the VA rely on these services to host critical IT systems and data, ensuring availability and security. Spending in this sector is substantial, driven by the increasing demand for cloud and data management solutions. Comparable contracts often involve significant dollar values due to the infrastructure and service level agreements required.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This means that opportunities for small businesses to participate in delivering these co-location hosting services may be limited, primarily through direct subcontracting with the prime vendor if they choose to engage them.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract structure, requiring the vendor to deliver specified services. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance monitoring details are not provided.

Related Government Programs

Federal Data Center Consolidation Initiative
IT Infrastructure Modernization Programs
Cloud Computing Services Contracts
Telecommunications Services Contracts

Risk Flags

Potential for service disruption
Cybersecurity vulnerabilities
Vendor financial stability
Technological obsolescence risk
Contract scope creep

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $38.4 million to LUMEN TECHNOLOGIES GOVERNMENT SOLUTIONS, INC.. CO-LOCATED HOSTING SERVICES - COMBINATION A CHICAGO, IL AND STERLING, CA

Who is the contractor on this award?

The obligated recipient is LUMEN TECHNOLOGIES GOVERNMENT SOLUTIONS, INC..

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $38.4 million.

What is the period of performance?

Start: 2019-09-25. End: 2026-09-30.

What is the track record of Lumen Technologies Government Solutions, Inc. in delivering similar co-location hosting services to federal agencies?

Lumen Technologies Government Solutions, Inc., formerly CenturyLink, has a significant history of providing telecommunications and IT infrastructure services to the federal government. They have held numerous contracts across various agencies, including the Department of Defense and civilian departments, for services ranging from network connectivity to data center solutions. Their experience includes managing complex, large-scale IT environments. However, specific performance metrics and past issues related to co-location hosting for the VA would require a deeper dive into contract performance reports and agency-specific evaluations. It's important to review their performance on similar firm-fixed-price, long-duration contracts to assess reliability and adherence to service level agreements.

How does the awarded price of $38.4M compare to market rates for similar co-location hosting services?

Benchmarking the $38.4M award against market rates requires detailed analysis of the specific services, capacity (e.g., rack space, power, cooling), Service Level Agreements (SLAs), and geographic locations. Co-location services can vary widely in cost. For a contract spanning over six years, the average annual cost of approximately $5.7M needs to be compared with industry reports and pricing from other major providers for comparable facilities in Chicago and Sterling, CA. Factors like redundancy, security certifications (e.g., FedRAMP, SOC 2), and included managed services significantly influence pricing. Without these specifics, a precise comparison is difficult, but the full and open competition suggests the price was deemed fair relative to the bids received.

What are the primary risks associated with this co-location hosting contract for the VA?

Key risks include potential vendor performance issues, such as service outages or failure to meet SLAs, which could disrupt critical VA operations. Cybersecurity threats targeting the hosting facilities or data represent a significant risk, requiring robust security measures from the vendor. Dependence on a single provider for essential infrastructure could lead to challenges if the vendor experiences financial instability or undergoes significant corporate changes. Furthermore, the long duration of the contract (over 6 years) means that technological advancements or changing VA requirements might outpace the contracted services, potentially leading to inefficiencies or the need for costly modifications if not managed proactively.

How effective is this contract in supporting the VA's overall IT modernization and data management goals?

This contract is likely effective in providing a stable and secure foundation for the VA's IT infrastructure by ensuring reliable co-location hosting. By outsourcing the physical hosting environment, the VA can focus its resources on modernizing applications, improving data analytics, and enhancing user services. The long-term nature of the contract provides stability, which is crucial for mission-critical systems. However, the effectiveness in achieving broader modernization goals depends on how well the co-location services integrate with the VA's cloud strategy, cybersecurity posture, and application development pipelines. Continuous assessment of the hosting environment's alignment with evolving IT strategies is necessary.

What are the historical spending patterns for co-location hosting services by the Department of Veterans Affairs?

Historical spending data for VA's co-location hosting would reveal trends in their reliance on external data center facilities. Analyzing past contracts, including their value, duration, and awarded vendors, would indicate whether spending has been consistent, increasing, or decreasing. It would also show if the VA has historically favored full and open competition or other procurement methods for these services. Understanding these patterns helps contextualize the current $38.4M award, assessing if it represents a typical investment, an increase due to expanded needs, or a strategic shift in how the VA manages its IT infrastructure. Such analysis is key to evaluating the long-term financial commitment.

What is the potential impact of this contract on the VA's data resilience and disaster recovery capabilities?

Co-located hosting, especially when established across geographically dispersed sites like Illinois and California, can significantly enhance data resilience and disaster recovery (DR) capabilities for the VA. By distributing critical IT infrastructure and data across these locations, the VA reduces the risk of a single point of failure. If one site experiences an outage due to a natural disaster, cyberattack, or technical issue, operations can potentially be maintained or quickly restored from the other site. The effectiveness of this depends on the specific DR architecture implemented, the synchronization of data between locations, and the defined recovery time objectives (RTOs) and recovery point objectives (RPOs) within the contract's SLAs.

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: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 931 14TH STE 1000 B, DENVER, CO, 80202

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

Financial Breakdown

Contract Ceiling: $102,578,342

Exercised Options: $38,448,590

Current Obligation: $38,448,590

Actual Outlays: $22,920,762

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q17NSD3006

IDV Type: IDC

Timeline