FAA Awards $51M for Equinix Data Center Colocation to Verizon Business

Contract Overview

Contract Amount: $51,066,072 ($51.1M)

Contractor: Verizon Business Network Services LLC

Awarding Agency: Department of Transportation

Start Date: 2023-10-25

End Date: 2033-03-26

Contract Duration: 3,440 days

Daily Burn Rate: $14.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THE PURPOSE OF DELIVERY ORDER 0004 IS TO ESTABLISH EQUINIX ASHBURN DATA CENTER COLOCATION.

Place of Performance

Location: ASHBURN, LOUDOUN County, VIRGINIA, 20147

State: Virginia Government Spending

Plain-Language Summary

Department of Transportation obligated $51.1 million to VERIZON BUSINESS NETWORK SERVICES LLC for work described as: THE PURPOSE OF DELIVERY ORDER 0004 IS TO ESTABLISH EQUINIX ASHBURN DATA CENTER COLOCATION. Key points: 1. Significant investment in critical data center infrastructure. 2. Verizon Business secures a long-term contract for colocation services. 3. Potential for high demand and reliance on a single provider. 4. IT infrastructure spending in telecommunications services.

Value Assessment

Rating: fair

The contract value of $51M over 10 years for data center colocation appears reasonable given the long-term commitment and the nature of the service. Benchmarking against similar large-scale data center contracts would provide a clearer picture of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive bidding process. This method is generally expected to yield fair pricing, though the specific pricing discovery mechanisms are not detailed.

Taxpayer Impact: Taxpayers are funding essential IT infrastructure for the FAA, ensuring operational continuity and data management capabilities.

Public Impact

Ensures reliable data storage and processing for the Federal Aviation Administration. Supports critical aviation operations through robust IT infrastructure. Long-term commitment may lock in current pricing, potentially missing future market reductions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (10 years) could lead to price inflexibility.
Reliance on a single vendor for critical data center services.

Positive Signals

Awarded under full and open competition.
Secures essential IT infrastructure for a key government agency.

Sector Analysis

This contract falls within the IT and telecommunications sector, specifically focusing on data center colocation services. Spending in this area is crucial for government agencies to maintain and upgrade their IT infrastructure, with benchmarks varying widely based on scale and service level agreements.

Small Business Impact

The contract was awarded to Verizon Business Network Services LLC, a large telecommunications provider. There is no explicit indication of small business participation in this specific delivery order, which is common for large infrastructure contracts.

Oversight & Accountability

The contract is a delivery order under a larger agreement, suggesting it has undergone initial review. Ongoing oversight will be crucial to ensure service delivery meets FAA requirements and that pricing remains competitive throughout the contract term.

Related Government Programs

Wired Telecommunications Carriers
Department of Transportation Contracting
Federal Aviation Administration Programs

Risk Flags

Long-term contract duration (10 years) may limit flexibility.
Potential vendor lock-in for critical data center services.
Lack of detailed pricing breakdown for unit cost analysis.
Dependence on a single provider for essential infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $51.1 million to VERIZON BUSINESS NETWORK SERVICES LLC. THE PURPOSE OF DELIVERY ORDER 0004 IS TO ESTABLISH EQUINIX ASHBURN DATA CENTER COLOCATION.

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 Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $51.1 million.

What is the period of performance?

Start: 2023-10-25. End: 2033-03-26.

What is the specific service level agreement (SLA) for the colocation services, and how does it compare to industry standards for critical infrastructure?

The provided data does not detail the specific Service Level Agreement (SLA) for the Equinix Ashburn Data Center colocation. A comprehensive analysis would require access to the contract's technical specifications and performance metrics. However, for critical government infrastructure, SLAs typically include stringent uptime guarantees (e.g., 99.999%), response times for incidents, and physical security measures, which are generally aligned with high-end industry standards for mission-critical facilities.

How does the per-square-foot or per-kilowatt pricing compare to other government or commercial colocation contracts of similar scale and location?

Without specific pricing breakdowns per unit (e.g., per rack, per kW, per square foot), a direct comparison is challenging. The total award of $51M over 10 years for colocation at a major hub like Equinix Ashburn suggests a significant commitment. Industry benchmarks for prime data center locations can range widely, but this value indicates a substantial footprint or high-density power requirements, necessitating a detailed cost-benefit analysis against comparable facilities and services.

What are the contingency plans if Verizon Business Network Services LLC fails to meet the colocation service requirements or faces operational disruptions?

Contingency plans typically involve contract clauses for service failures, penalties, and potential termination for default. For critical infrastructure like data centers, the FAA would likely have business continuity and disaster recovery plans that account for potential disruptions at the colocation facility. This might include redundant network paths, alternative data processing sites, and clear escalation procedures with the vendor.

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: 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, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $100,000,000

Exercised Options: $51,066,072

Current Obligation: $51,066,072

Actual Outlays: $7,830,869

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 693KA823D00010

IDV Type: IDC

Timeline