DOT's $13.9M Verizon wireless contract shows strong competition but raises questions on per-unit value

Contract Overview

Contract Amount: $13,888,740 ($13.9M)

Contractor: Cellco Partnership

Awarding Agency: Department of Transportation

Start Date: 2022-03-28

End Date: 2026-07-31

Contract Duration: 1,586 days

Daily Burn Rate: $8.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: VERIZON - FY22 NATIONAL WIRELESS CELLULAR DEVICES AND SERVICES FOR DOT

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73169

State: Oklahoma Government Spending

Plain-Language Summary

Department of Transportation obligated $13.9 million to CELLCO PARTNERSHIP for work described as: VERIZON - FY22 NATIONAL WIRELESS CELLULAR DEVICES AND SERVICES FOR DOT Key points: 1. Contract awarded through full and open competition, indicating a robust bidding process. 2. The contract's value of $13.9M over its period suggests significant reliance on wireless services. 3. Fixed-price contract type helps mitigate cost overrun risks for the government. 4. The duration of the contract (over 4 years) provides stability for service delivery. 5. While competition was high, detailed per-unit cost analysis is needed to confirm value for money. 6. The specific services procured are critical for the Federal Aviation Administration's operations.

Value Assessment

Rating: fair

Benchmarking the per-unit cost of wireless devices and services against similar government contracts is crucial for assessing value. Without specific unit details, it's difficult to definitively state if the $13.9M represents excellent value. However, the competitive nature of the award suggests a reasonable price was likely achieved. Further analysis of the average cost per device or service line item compared to market rates would provide a clearer picture of cost-effectiveness.

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. The presence of multiple bidders in such a competitive landscape typically drives prices down and encourages innovation. The specific number of bidders is not provided, but the 'full and open' designation implies a healthy level of market interest and engagement.

Taxpayer Impact: A competitive award process generally benefits taxpayers by ensuring the government receives services at a fair market price, minimizing the potential for overspending and maximizing the use of public funds.

Public Impact

Federal Aviation Administration (FAA) personnel benefit from reliable wireless communication services. Essential communication services are delivered to support the FAA's mission. The geographic impact is likely nationwide, supporting FAA operations across various locations. Workforce implications include enabling seamless communication for employees reliant on mobile devices.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific per-unit cost data makes it difficult to assess true value for money.
The total contract value could obscure significant variations in pricing for different service tiers or devices.
Potential for vendor lock-in if contract terms are not carefully managed throughout the period of performance.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
Firm fixed-price contract type provides cost certainty.
Long contract duration offers stability and predictability for essential services.

Sector Analysis

The wireless telecommunications sector is a mature and highly competitive market. Government spending in this area is substantial, supporting a wide range of agency operations. This contract fits within the broader category of telecommunications services, which are critical for modern government functioning. Comparable spending benchmarks would involve analyzing other large-scale wireless contracts awarded to major carriers by federal agencies.

Small Business Impact

The provided data does not indicate if this contract included small business set-asides or subcontracting requirements. Given the nature of national wireless services, it's possible that the primary contract is with a large telecommunications provider. Further investigation would be needed to determine if small businesses are involved in subcontracting capacities or if specific set-aside goals were established.

Oversight & Accountability

Oversight for this contract would typically fall under the Federal Aviation Administration's contracting officers and program managers. Accountability measures are inherent in the firm fixed-price structure, which obligates the contractor to deliver specified services at the agreed-upon price. Transparency is generally maintained through contract award databases, though detailed service usage and cost breakdowns may be less publicly accessible.

Related Government Programs

Federal Information Technology Acquisition Reform Act (FITARA)
General Services Administration (GSA) Schedule Contracts
Wireless Services for Federal Agencies

Risk Flags

Potential for uncompetitive pricing if bid count was low.
Risk of technology obsolescence over contract duration.
Lack of detailed per-unit cost transparency.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $13.9 million to CELLCO PARTNERSHIP. VERIZON - FY22 NATIONAL WIRELESS CELLULAR DEVICES AND SERVICES FOR DOT

Who is the contractor on this award?

The obligated recipient is CELLCO PARTNERSHIP.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $13.9 million.

What is the period of performance?

Start: 2022-03-28. End: 2026-07-31.

What is the average cost per wireless device or service line item under this contract, and how does it compare to market rates or similar government contracts?

The provided data aggregates the total contract value to $13.9 million without detailing the cost per individual device or service plan. To assess value for money, a breakdown of costs by device type (e.g., smartphone, tablet) and service plan (e.g., data allowance, calling minutes) is necessary. Benchmarking these per-unit costs against the GSA's Wireless Communications Services (WCS) schedule or other federal agency contracts for similar services would reveal if DOT is receiving competitive pricing. For instance, if the average monthly data cost per user significantly exceeds the market rate of $30-$60 for comparable business plans, it would indicate potential overspending.

How many bids were received for this 'full and open competition' award, and what does this number suggest about the competitiveness of the pricing?

The data indicates the contract was awarded under 'full and open competition,' but it does not specify the number of bids received. A high number of bids (e.g., five or more) typically signals strong market interest and usually leads to more competitive pricing as vendors vie for the contract. Conversely, a low number of bids, even under full and open competition, might suggest market limitations or that only a few vendors could meet the stringent requirements, potentially resulting in less aggressive pricing. Without the bid count, it's difficult to definitively assess the degree of price competition achieved.

What specific types of wireless devices and services are included in this contract, and are they essential for the FAA's core mission?

The contract is for 'National Wireless Cellular Devices and Services.' This likely encompasses a range of devices such as smartphones, tablets, and potentially mobile hotspots, along with associated cellular service plans including voice, data, and messaging. For the Federal Aviation Administration (FAA), reliable and secure wireless communication is critical for air traffic control coordination, field operations, emergency response, and administrative functions. Understanding the specific devices and service levels procured is key to evaluating their necessity and ensuring they align with the FAA's operational requirements and safety mandates.

What is the historical spending trend for wireless services by the Department of Transportation, and how does this $13.9 million contract compare?

Analyzing historical spending data for wireless services by the Department of Transportation (DOT) is crucial for context. If DOT's previous spending on similar services was significantly lower, this $13.9 million contract might represent an increase in demand, scope, or potentially rising costs. Conversely, if past contracts were of similar magnitude, it suggests a consistent level of reliance on these services. Without historical data, it's challenging to determine if this contract reflects an anomaly, a planned expansion, or a stable continuation of service procurement. Examining trends over the past 3-5 fiscal years would provide valuable insight.

Does the firm fixed-price (FFP) contract type adequately mitigate risks for the government, considering the dynamic nature of wireless technology and services?

A firm fixed-price (FFP) contract is generally advantageous for the government as it shifts the risk of cost overruns to the contractor. This structure provides budget certainty for the $13.9 million expenditure. However, the rapid evolution of wireless technology could pose a challenge. If the contract has a long duration (like this one, ending in 2026), the government might be locked into potentially outdated technology or service plans if provisions for upgrades or adjustments are not included. The FFP structure is effective for managing baseline costs, but the agency must ensure the contract includes mechanisms to adapt to technological advancements or competitive pricing shifts in the market.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Verizon Maryland LLC

Address: 1 VERIZON WAY, BASKING RIDGE, NJ, 07920

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $37,422,718

Exercised Options: $13,888,740

Current Obligation: $13,888,740

Actual Outlays: $11,445,089

Parent Contract

Parent Award PIID: 6973GH22A00006

IDV Type: BPA

Timeline