DoD's $42.2M Verizon contract for wired telecommunications services awarded under full and open competition

Contract Overview

Contract Amount: $42,238,575 ($42.2M)

Contractor: Verizon Business Network Services LLC

Awarding Agency: Department of Defense

Start Date: 2014-01-28

End Date: 2025-04-04

Contract Duration: 4,084 days

Daily Burn Rate: $10.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF VZBZ000541EBM

Place of Performance

Location: ASHBURN, LOUDOUN County, VIRGINIA, 20147

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $42.2 million to VERIZON BUSINESS NETWORK SERVICES LLC for work described as: IGF::OT::IGF VZBZ000541EBM Key points: 1. Contract awarded via full and open competition, suggesting a competitive pricing environment. 2. The contract duration of over 11 years (4084 days) indicates a long-term need for these services. 3. The firm-fixed-price contract type shifts cost risk to the contractor. 4. Services are for wired telecommunications, a critical component of modern defense infrastructure. 5. The contract was awarded as a delivery order against an existing contract. 6. The contractor, Verizon Business Network Services LLC, is a major telecommunications provider.

Value Assessment

Rating: good

The contract value of $42.2M over approximately 11 years suggests a moderate annual spend. Benchmarking this against similar large-scale telecommunications contracts for government agencies is difficult without more granular data on service scope and volume. However, the firm-fixed-price structure is generally favorable for the government, locking in costs and reducing the risk of cost overruns. The long duration implies a stable, ongoing need, and the award through full and open competition suggests that pricing was likely vetted against market alternatives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. This typically leads to a more robust selection of offers and potentially more competitive pricing as vendors vie for the business. The specific number of bidders is not provided, but the nature of the competition suggests multiple entities likely participated, contributing to price discovery.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation from multiple vendors, ensuring the government receives the best value.

Public Impact

Provides essential wired telecommunications services to the Department of Defense. Supports the operational readiness and communication capabilities of military personnel. Services are likely utilized across various DoD facilities, potentially with a significant impact on national security operations. The contract supports jobs within the telecommunications sector, particularly at Verizon Business Network Services LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 11 years) could lead to vendor lock-in and potential challenges in adapting to rapidly evolving telecommunications technology.
Lack of specific details on service performance metrics makes it difficult to assess the contractor's track record beyond the award itself.
The contract is a delivery order against a larger contract, meaning the initial competition details for the parent contract are not visible here.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
Firm-fixed-price contract type provides cost certainty for the government.
Contractor is a well-established telecommunications provider with significant infrastructure and experience.
Long-term award suggests a stable and predictable need for these critical services.

Sector Analysis

The wired telecommunications carriers industry is a mature sector providing essential network infrastructure. This contract falls within the broader IT and telecommunications services market, which is a significant area of federal spending. The Department of Defense is a major consumer of these services, relying on robust and secure networks for its global operations. Comparable spending benchmarks would involve analyzing other large-scale government telecommunications contracts, particularly those for defense agencies, to understand typical pricing and contract structures.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the nature of large-scale telecommunications infrastructure and services, it is common for prime contracts to be awarded to large, established providers like Verizon. Subcontracting opportunities for small businesses may exist within the execution of this contract, but this information is not detailed in the provided data.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Information Systems Agency (DISA) and the Department of Defense's contracting and financial management oversight bodies. The firm-fixed-price nature of the contract simplifies some aspects of oversight by focusing on delivery and adherence to terms rather than cost justification. Transparency is generally provided through contract award databases, though detailed performance metrics and specific oversight reports may not always be publicly accessible.

Related Government Programs

Defense Information Systems Agency (DISA) Contracts
Department of Defense Telecommunications Spending
Wired Network Infrastructure Services
Federal Government Communication Contracts

Risk Flags

Long contract duration may lead to technological obsolescence.
Lack of detailed performance metrics in summary data.
Delivery order against a parent contract obscures initial competition details.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.2 million to VERIZON BUSINESS NETWORK SERVICES LLC. IGF::OT::IGF VZBZ000541EBM

Who is the contractor on this award?

The obligated recipient is VERIZON BUSINESS NETWORK SERVICES LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $42.2 million.

What is the period of performance?

Start: 2014-01-28. End: 2025-04-04.

What is the specific scope of 'wired telecommunications services' covered by this contract?

The provided data identifies the North American Industry Classification System (NAICS) code as 517110, which corresponds to Wired Telecommunications Carriers. This typically includes services such as local and long-distance voice and data transmission via wired telephone networks, including the operation of associated infrastructure like switches and towers. For the Department of Defense, this likely encompasses a wide range of services including dedicated data lines, voice circuits, network backbone connectivity, and potentially private branch exchange (PBX) services across various military installations. The exact services would be detailed in the contract's statement of work, which is not provided here, but generally involves the provision and maintenance of physical network infrastructure for communication.

How does the $42.2M contract value compare to historical spending on similar services by the DoD?

Without access to the specific statement of work and the precise services rendered, a direct comparison of the $42.2M value to historical DoD spending on similar services is challenging. However, the contract's duration of over 11 years (4084 days) suggests an average annual spend of approximately $3.8 million ($42.2M / 11 years). This figure needs to be contextualized by the scale and criticality of the facilities and operations being supported. The DoD is a massive organization with extensive global communication needs, and spending on telecommunications is a significant portion of its IT budget. Historical data from agencies like DISA would be necessary to determine if this annual spend is in line with or deviates from previous procurement patterns for comparable wired telecommunications infrastructure and services.

What are the key performance indicators (KPIs) or service level agreements (SLAs) associated with this contract?

The provided data does not specify the Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. Typically, for wired telecommunications services, SLAs would focus on metrics such as network uptime (availability), latency, jitter, packet loss, and repair response times. The firm-fixed-price nature of the contract implies that the contractor is responsible for meeting these performance standards. Failure to meet SLAs could result in penalties or contractually defined remedies. Detailed KPIs and SLAs would be outlined in the contract's statement of work and associated appendices, which are not available in the provided summary data.

What is Verizon Business Network Services LLC's track record with the Department of Defense for similar contracts?

Verizon Business Network Services LLC is a major telecommunications provider with extensive experience serving government clients, including the Department of Defense. While specific details of their past performance on contracts identical to this one are not provided, Verizon has a long history of delivering large-scale network and telecommunications solutions. Their track record would typically be assessed by the DoD during the procurement process, considering factors like past performance evaluations, financial stability, and technical capabilities. Awards like this delivery order suggest a satisfactory performance history on the parent contract or a strong competitive offering that met DoD requirements.

Are there any identified risks or concerns regarding the long-term nature of this contract?

The primary risk associated with a long-term contract like this (over 11 years) is technological obsolescence. The telecommunications landscape evolves rapidly, and a contract spanning over a decade could potentially lock the DoD into outdated technology or infrastructure. This could lead to decreased efficiency, increased vulnerability, or higher costs if upgrades are needed but not adequately covered. Another concern could be vendor lock-in, making it difficult and costly to switch providers if a better or more cost-effective solution emerges. Mitigation strategies often include contract clauses for technology refresh, performance-based requirements that encourage innovation, and regular reviews of the contract's continued necessity and value.

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: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Verizon Maryland LLC

Address: 22001 LOUDOUN COUNTY PKWY, ASHBURN, VA, 20147

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

Financial Breakdown

Contract Ceiling: $42,238,575

Exercised Options: $42,238,575

Current Obligation: $42,238,575

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC101909D2000

IDV Type: IDC

Timeline