VA awards $18.5M wired telecom contract to Lumen Technologies, highlighting a competitive landscape

Contract Overview

Contract Amount: $18,463,447 ($18.5M)

Contractor: Lumen Technologies Government Solutions, Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2021-09-30

End Date: 2026-08-31

Contract Duration: 1,796 days

Daily Burn Rate: $10.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: NLEC-NG BASIC CONTRACT FOR LUMEN

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22203

State: Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $18.5 million to LUMEN TECHNOLOGIES GOVERNMENT SOLUTIONS, INC for work described as: NLEC-NG BASIC CONTRACT FOR LUMEN Key points: 1. The contract value represents a significant investment in essential telecommunications infrastructure for the VA. 2. Lumen Technologies, a major player in the telecom sector, secured this award through full and open competition. 3. The firm fixed-price structure suggests a predictable cost model, though potential for cost overruns exists. 4. The contract duration of nearly five years indicates a long-term need for these services. 5. The award falls within the 'Wired Telecommunications Carriers' industry, a critical support service for government operations. 6. The absence of small business set-aside flags suggests a focus on large-scale providers for this requirement.

Value Assessment

Rating: good

The $18.5 million award for wired telecommunications services appears reasonable given the contract's duration and the nature of the services provided. Benchmarking against similar large-scale government telecom contracts would provide further insight into its value. The firm fixed-price type suggests that the contractor bears the risk of cost overruns, which is generally favorable for the government. However, without specific performance metrics or detailed service breakdowns, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of 3 bidders suggests a moderately competitive environment for this specific requirement. A higher number of bidders typically leads to more aggressive pricing and better value for the government. The fact that it was competed openly is a positive sign for price discovery.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces. It ensures that the government is not locked into a single provider and can leverage the best available offers.

Public Impact

Veterans Affairs (VA) personnel and operations will benefit from reliable wired telecommunications services. Essential communication infrastructure will be maintained and potentially upgraded across VA facilities. The contract supports the VA's mission to provide healthcare and benefits to veterans. The geographic impact is likely nationwide, supporting VA facilities across the country. The contract supports jobs within the telecommunications sector, specifically at Lumen Technologies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if follow-on contracts are not competitively bid.
Reliance on a single provider for critical infrastructure could pose a risk if service levels degrade.
Firm fixed-price contracts can sometimes lead to less incentive for innovation or service improvement beyond the minimum requirements.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
Firm fixed-price contract type provides cost certainty for the government.
Long contract duration suggests a stable and reliable service provision for the VA.
Lumen Technologies is an established provider with experience in government contracts.

Sector Analysis

The wired telecommunications carriers sector is a mature industry providing essential connectivity services. Government spending in this area is crucial for maintaining operational capabilities across various agencies. This contract fits within the broader category of government IT and communication infrastructure spending, which is a significant portion of federal IT budgets. Comparable spending benchmarks would involve looking at other large federal contracts for similar telecommunications services.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This suggests that the primary focus was on securing services from large, established telecommunications providers capable of meeting the VA's extensive needs. The lack of small business involvement in this specific award may limit opportunities for smaller players in this particular contract, though they may participate in other set-aside contracts.

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 type, requiring Lumen Technologies to deliver specified services within the agreed-upon price. Transparency is facilitated by the public nature of contract awards, though detailed performance data may not always be publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Information Technology Acquisition Reform Act (FITARA)
General Services Administration (GSA) Schedules
Telecommunications Services Contracts
Department of Veterans Affairs IT Modernization

Risk Flags

Potential for service degradation impacting VA operations.
Cybersecurity risks associated with critical network infrastructure.
Risk of technology obsolescence over the contract's long duration.
Dependence on a single vendor for essential communication services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $18.5 million to LUMEN TECHNOLOGIES GOVERNMENT SOLUTIONS, INC. NLEC-NG BASIC CONTRACT FOR LUMEN

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 $18.5 million.

What is the period of performance?

Start: 2021-09-30. End: 2026-08-31.

What is Lumen Technologies' track record with federal contracts, particularly with the Department of Veterans Affairs?

Lumen Technologies Government Solutions, Inc. (formerly CenturyLink) has a history of holding federal contracts. Analyzing their past performance with the VA and other agencies is crucial. This includes reviewing contract performance reports, any past disputes or terminations, and their overall success rate in delivering services. A review of federal procurement data would reveal the volume and types of contracts they have held, their performance ratings, and any significant issues encountered. Their experience with similar-sized and scoped telecommunications contracts would be a key indicator of their capability to fulfill this $18.5 million award effectively.

How does the awarded price compare to market rates for similar wired telecommunications services?

Benchmarking this $18.5 million contract against market rates requires detailed analysis of the specific services included (e.g., bandwidth, type of connectivity, service level agreements). Comparing the per-unit costs (if identifiable) or the overall contract value relative to the scope of services provided by Lumen to other government agencies or even commercial clients can offer insights. The firm fixed-price nature means the government has a defined cost, but understanding if this price is competitive relies on market intelligence and potentially data from the bidding process itself. If the number of bidders was low, it might suggest less competitive pricing than if multiple strong contenders vied for the contract.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks include potential service disruptions, cybersecurity vulnerabilities, and the possibility of cost overruns if the firm fixed-price contract has poorly defined scope or escalation clauses. Mitigation strategies typically involve robust Service Level Agreements (SLAs) with penalties for non-performance, stringent cybersecurity requirements, and active contract management by the VA. The long duration also presents a risk of technology obsolescence. The VA's oversight mechanisms, including regular performance reviews and audits, are critical for identifying and addressing risks proactively. The competitive nature of the award may also mitigate risks by ensuring the contractor has a strong incentive to perform well.

How effective is this contract in supporting the VA's overall mission and technological modernization efforts?

This contract is fundamental to the VA's ability to operate its nationwide network of facilities and deliver services to veterans. Reliable wired telecommunications are the backbone of modern healthcare systems, data management, and communication platforms. Its effectiveness hinges on the quality and reliability of the services provided by Lumen. If it enables seamless data transfer, supports telehealth initiatives, and ensures secure communication, it directly contributes to the VA's mission. Assessing its contribution to modernization would involve understanding if the contract supports upgrades to faster, more secure, or more resilient network infrastructure compared to previous solutions.

What are the historical spending patterns for wired telecommunications services within the Department of Veterans Affairs?

Analyzing historical spending patterns for wired telecommunications within the VA would reveal trends in contract values, durations, and awarded vendors over time. This $18.5 million award should be viewed in the context of previous expenditures. Have spending levels increased or decreased? Has the VA consolidated its telecom contracts or diversified its vendor base? Understanding these patterns can highlight shifts in strategy, potential cost efficiencies or inefficiencies, and the VA's long-term reliance on specific types of telecommunications infrastructure. It also helps in assessing whether this current award represents a significant change or a continuation of established practices.

What is the potential impact of this contract on the broader telecommunications market, particularly for competitors?

This award to Lumen Technologies signifies a significant win for the company and reinforces its position as a key provider of government telecommunications services. For competitors, it highlights the competitive landscape and the importance of securing such large-scale contracts. The fact that it was competed openly means other qualified vendors were considered, and their bids were evaluated. The outcome may influence future bidding strategies and market positioning for other telecommunications firms vying for federal contracts. It underscores the substantial government market for wired telecommunications and the capabilities required to serve it effectively.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications Carriers › Wired Telecommunications Carriers

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4250 N FAIRFAX DR, ARLINGTON, VA, 22203

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $18,665,004

Exercised Options: $18,665,004

Current Obligation: $18,463,447

Actual Outlays: $9,843,160

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10B20D0030

IDV Type: IDC

Timeline