DHS awards AT&T $39.4M for VPN services, impacting wired telecommunications carriers
Contract Overview
Contract Amount: $39,452,285 ($39.5M)
Contractor: AT&T Enterprises, LLC
Awarding Agency: Department of Homeland Security
Start Date: 2022-04-18
End Date: 2026-04-17
Contract Duration: 1,460 days
Daily Burn Rate: $27.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: VIRTUAL PRIVATE NETWORK SERVICE (VPNS) AND OTHER NETWORK-RELATED SERVICES
Place of Performance
Location: VIENNA, FAIRFAX County, VIRGINIA, 22185
State: Virginia Government Spending
Plain-Language Summary
Department of Homeland Security obligated $39.5 million to AT&T ENTERPRISES, LLC for work described as: VIRTUAL PRIVATE NETWORK SERVICE (VPNS) AND OTHER NETWORK-RELATED SERVICES Key points: 1. Significant contract value of $39.4M for VPN and network services. 2. AT&T Enterprises, LLC is the sole awardee, raising questions about competition. 3. The contract falls under the Wired Telecommunications Carriers NAICS code. 4. Firm Fixed Price contract type suggests cost certainty for the government.
Value Assessment
Rating: fair
The contract value of $39.4M for VPN services appears reasonable given the duration and scope. Benchmarking against similar large-scale network service contracts would provide a clearer picture of its value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating a competitive bidding process. However, the award to a single entity, AT&T Enterprises, LLC, warrants further examination to ensure optimal price discovery and value.
Taxpayer Impact: Taxpayers benefit from a competitive bidding process, but the final price and service quality will determine the ultimate value for money.
Public Impact
Ensures critical network connectivity for U.S. Customs and Border Protection operations. Supports national security by providing secure communication channels. Impacts the telecommunications industry, particularly providers of VPN and network solutions.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for limited competition despite 'full and open' designation.
- Reliance on a single vendor for critical network services.
Positive Signals
- Firm Fixed Price contract provides cost predictability.
- Long-term contract ensures service continuity.
Sector Analysis
This contract falls within the IT and telecommunications sector, specifically wired telecommunications carriers. Spending in this area is crucial for government operations, with benchmarks varying based on service complexity and scale.
Small Business Impact
The data does not indicate any specific provisions or set-asides for small businesses in this contract award. Further analysis would be needed to determine the extent of small business participation.
Oversight & Accountability
The award is a delivery order under an existing contract, suggesting it has undergone some level of oversight. However, the specifics of the competition and vendor selection process require detailed review.
Related Government Programs
- Wired Telecommunications Carriers
- Department of Homeland Security Contracting
- U.S. Customs and Border Protection Programs
Risk Flags
- Potential for limited competition despite 'full and open' designation.
- Single vendor award may limit future negotiation leverage.
- Lack of small business participation noted.
- Dependence on one provider for critical infrastructure.
Tags
wired-telecommunications-carriers, department-of-homeland-security, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Homeland Security awarded $39.5 million to AT&T ENTERPRISES, LLC. VIRTUAL PRIVATE NETWORK SERVICE (VPNS) AND OTHER NETWORK-RELATED SERVICES
Who is the contractor on this award?
The obligated recipient is AT&T ENTERPRISES, LLC.
Which agency awarded this contract?
Awarding agency: Department of Homeland Security (U.S. Customs and Border Protection).
What is the total obligated amount?
The obligated amount is $39.5 million.
What is the period of performance?
Start: 2022-04-18. End: 2026-04-17.
What was the competitive landscape during the bidding process for this VPN service contract?
While the contract is listed as 'full and open competition,' the award to a single entity, AT&T Enterprises, LLC, suggests that either only one bid was received, or AT&T's proposal was significantly superior. Further investigation into the bidding process and the number of proposals submitted would clarify the true level of competition and its impact on pricing.
What are the potential risks associated with relying on a single vendor for critical VPN services?
Relying on a single vendor can create risks such as vendor lock-in, reduced negotiation leverage for future contracts, and potential service disruptions if the vendor faces financial or operational issues. It also limits opportunities for other capable providers, including small businesses, to compete for this essential government service.
How does the firm fixed price contract structure benefit the Department of Homeland Security in this scenario?
A firm fixed price contract provides the most cost certainty for the government, as the price is set and not subject to adjustments based on the contractor's cost experience. This structure shifts the risk of cost overruns to AT&T, allowing DHS to budget more effectively for these VPN and network services over the contract's duration.
Industry Classification
NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers
Product/Service Code: IT AND TELECOM - PLATFORM
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
Parent Company: Tyto Athene, LLC
Address: 3033 CHAIN BRIDGE RD, OAKTON, VA, 22124
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $203,153,569
Exercised Options: $39,452,285
Current Obligation: $39,452,285
Actual Outlays: $20,424,960
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: GS00Q17NSD3000
IDV Type: IDC
Timeline
Start Date: 2022-04-18
Current End Date: 2026-04-17
Potential End Date: 2033-04-17 10:46:35
Last Modified: 2025-09-11
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