SEC's $733M Lumen Internet Contract Faces Scrutiny Over Value and Competition

Contract Overview

Contract Amount: $733,828 ($733.8K)

Contractor: Lumen Technologies Government Solutions, Inc.

Awarding Agency: Securities and Exchange Commission

Start Date: 2021-03-22

End Date: 2027-06-30

Contract Duration: 2,291 days

Daily Burn Rate: $320/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: EIS- INTERNET PROTOCOL SERVICE

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20549

State: District of Columbia Government Spending

Plain-Language Summary

Securities and Exchange Commission obligated $733,828.22 to LUMEN TECHNOLOGIES GOVERNMENT SOLUTIONS, INC. for work described as: EIS- INTERNET PROTOCOL SERVICE Key points: 1. Significant contract value of $733.8M over 5 years. 2. Lumen Technologies holds the contract, a major player in the telecom sector. 3. Potential risks include vendor lock-in and price escalation. 4. Spending is concentrated in IT services, specifically telecommunications.

Value Assessment

Rating: fair

The contract's value of $733.8M over five years suggests a substantial investment. Benchmarking against similar government-wide contracts for internet protocol services is necessary to assess if the pricing is competitive, especially given the long-term commitment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which theoretically allows for the best price discovery. However, the specific details of the bidding process and the number of bidders are crucial to confirm effective price competition.

Taxpayer Impact: Taxpayer funds are being used for essential IT infrastructure. Ensuring competitive pricing through robust competition is key to maximizing the value of this expenditure.

Public Impact

Ensures critical internet connectivity for the Securities and Exchange Commission. Supports agency operations and data transmission needs. Potential for service disruptions if vendor performance falters. Impacts the market for government telecommunications services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long-term commitment may limit flexibility.
Vendor performance monitoring is critical.
Potential for price increases at renewal.

Positive Signals

Awarded through full and open competition.
Provides essential IT infrastructure.
Fixed-price contract structure.

Sector Analysis

This contract falls within the IT sector, specifically telecommunications services. Government spending on internet protocol services is substantial, with agencies relying on robust connectivity for daily operations and data management.

Small Business Impact

While the primary awardee is a large corporation, opportunities for small businesses may exist through subcontracting. Further analysis would be needed to determine the extent of small business participation in this contract.

Oversight & Accountability

Oversight will be crucial to ensure Lumen Technologies meets performance standards and that the SEC is receiving value for money throughout the contract's duration. Regular performance reviews and contract management are essential.

Related Government Programs

Wired Telecommunications Carriers
Securities and Exchange Commission Contracting
Securities and Exchange Commission Programs

Risk Flags

Long contract duration (5 years).
Potential for vendor lock-in.
Reliance on a single large provider.
Need for robust performance monitoring.
Unknown level of small business subcontracting.

Frequently Asked Questions

What is this federal contract paying for?

Securities and Exchange Commission awarded $733,828.22 to LUMEN TECHNOLOGIES GOVERNMENT SOLUTIONS, INC.. EIS- INTERNET PROTOCOL SERVICE

Who is the contractor on this award?

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

Which agency awarded this contract?

Awarding agency: Securities and Exchange Commission (Securities and Exchange Commission).

What is the total obligated amount?

The obligated amount is $733,828.22.

What is the period of performance?

Start: 2021-03-22. End: 2027-06-30.

What was the competitive landscape like during the bidding process, and how many bids were received?

The contract was awarded under 'full and open competition,' suggesting multiple vendors could bid. However, the specific number of bids received and the details of the evaluation process are not provided. Understanding this competitive intensity is key to assessing if the final price truly reflects market value and if the government secured the best possible terms.

Are there any performance metrics or service level agreements (SLAs) in place to ensure service quality and mitigate risks?

While the contract type is 'firm fixed price,' which helps control costs, the effectiveness of the service hinges on performance. The presence and stringency of Service Level Agreements (SLAs) are critical. Robust SLAs with clear penalties for non-performance are essential to ensure Lumen Technologies delivers reliable internet protocol services and to mitigate risks of service disruptions.

How does the per-unit cost of this contract compare to similar government or commercial contracts for internet protocol services?

Benchmarking the per-unit cost against comparable government-wide contracts (like Enterprise Infrastructure Solutions - EIS) or commercial agreements is vital. Without this comparison, it's difficult to definitively assess if the $733.8M price tag represents good value. Factors like service speed, reliability, and geographic coverage influence these costs.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › 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

Solicitation ID: 50310220R0015

Offers Received: 6

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: $1,387,930

Exercised Options: $733,828

Current Obligation: $733,828

Actual Outlays: $304,853

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