USAID awards AT&T $42.4M for enterprise network services, spanning a decade

Contract Overview

Contract Amount: $42,402,268 ($42.4M)

Contractor: AT&T Enterprises, LLC

Awarding Agency: Agency for International Development

Start Date: 2021-02-03

End Date: 2031-02-02

Contract Duration: 3,651 days

Daily Burn Rate: $11.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: USAID ENTERPRISE AND NETWORK SERVICES DOMESTIC AND NON-DOMESTIC TASK ORDER UNDER ENTERPRISE INFRASTRUCTURE SOLUTIONS (EIS)

Place of Performance

Location: VIENNA, FAIRFAX County, VIRGINIA, 22185

State: Virginia Government Spending

Plain-Language Summary

Agency for International Development obligated $42.4 million to AT&T ENTERPRISES, LLC for work described as: USAID ENTERPRISE AND NETWORK SERVICES DOMESTIC AND NON-DOMESTIC TASK ORDER UNDER ENTERPRISE INFRASTRUCTURE SOLUTIONS (EIS) Key points: 1. Contract value represents a significant investment in USAID's global IT infrastructure. 2. The fixed-price structure with economic price adjustment aims to mitigate inflation risks. 3. A decade-long duration suggests a strategic, long-term commitment to network modernization. 4. The contract's scope covers both domestic and non-domestic task orders, indicating broad operational support. 5. Performance is benchmarked against similar large-scale telecommunications contracts for government agencies.

Value Assessment

Rating: good

The total award of $42.4 million over 10 years averages to approximately $4.24 million annually. This appears reasonable for comprehensive enterprise and network services supporting a global agency like USAID. Benchmarking against similar large-scale telecommunications contracts awarded to major providers for federal agencies suggests this pricing is competitive, especially considering the inclusion of both domestic and international support. The fixed-price with economic price adjustment (EPA) structure is common for long-duration IT service contracts to account for potential market fluctuations.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of two bids suggests a competitive process, though the exact number of bidders is not detailed. Full and open competition generally leads to better price discovery and ensures that the government receives offers from a wide range of qualified contractors, potentially resulting in more favorable terms and pricing.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value for essential network services, preventing potential overspending associated with sole-source or limited competition awards.

Public Impact

USAID personnel worldwide will benefit from enhanced and reliable network connectivity, supporting their mission-critical operations. The contract ensures the delivery of essential enterprise and network services, including telecommunications infrastructure. Geographic impact is global, covering both domestic U.S. locations and non-domestic operational areas where USAID operates. Workforce implications include the potential for AT&T to utilize its skilled technicians and engineers for service delivery and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long duration (10 years) increases exposure to potential technological obsolescence or shifts in service needs.
Economic Price Adjustment (EPA) clause could lead to cost increases beyond initial projections if market conditions change significantly.
Reliance on a single large vendor for critical infrastructure poses a potential risk if performance issues arise.

Positive Signals

Award to a major telecommunications provider like AT&T suggests a high likelihood of robust service delivery and established support mechanisms.
Full and open competition indicates a thorough vetting process and potential for competitive pricing.
The contract's focus on enterprise and network services aligns with USAID's need for stable and secure global communications.

Sector Analysis

This contract falls within the telecommunications services sector, specifically wired telecommunications carriers. The U.S. federal government is a significant consumer of such services, with spending often concentrated among a few large providers. Contracts like this are crucial for maintaining the operational backbone of agencies, enabling communication and data transfer essential for their missions. Comparable spending benchmarks for large federal IT and telecommunications contracts often run into tens or hundreds of millions of dollars over similar durations.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). While AT&T is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on AT&T's internal policies and the specific requirements outlined in the task orders issued under this contract. Further analysis would be needed to determine the actual impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will primarily reside with the Agency for International Development (USAID) contracting officers and program managers. They are responsible for monitoring performance, ensuring compliance with contract terms, and approving task orders. Transparency is facilitated through contract databases like FPDS. While specific IG jurisdiction isn't detailed, the USAID Office of Inspector General (OIG) would have oversight authority for fraud, waste, and abuse related to this award.

Related Government Programs

General Services Administration (GSA) Enterprise Infrastructure Solutions (EIS)
Department of Defense (DoD) Telecommunications Contracts
Federal Civilian Agency Network Modernization Programs
Worldwide Communications Support Contracts

Risk Flags

Long-term contract duration increases risk of technological obsolescence.
Economic Price Adjustment (EPA) introduces potential for cost overruns.
Reliance on a single large provider for critical infrastructure.
Scope may need adjustments due to evolving mission needs over 10 years.

Frequently Asked Questions

What is this federal contract paying for?

Agency for International Development awarded $42.4 million to AT&T ENTERPRISES, LLC. USAID ENTERPRISE AND NETWORK SERVICES DOMESTIC AND NON-DOMESTIC TASK ORDER UNDER ENTERPRISE INFRASTRUCTURE SOLUTIONS (EIS)

Who is the contractor on this award?

The obligated recipient is AT&T ENTERPRISES, LLC.

Which agency awarded this contract?

Awarding agency: Agency for International Development (Agency for International Development).

What is the total obligated amount?

The obligated amount is $42.4 million.

What is the period of performance?

Start: 2021-02-03. End: 2031-02-02.

What is AT&T's track record with similar large-scale federal telecommunications contracts?

AT&T has a long and extensive history of providing telecommunications and network services to the U.S. federal government. They are a primary awardee of the General Services Administration's (GSA) Enterprise Infrastructure Solutions (EIS) contract, which is a massive indefinite-delivery, indefinite-quantity (IDIQ) contract vehicle similar in scope to what USAID is utilizing. AT&T also holds numerous other large prime contracts across various federal agencies, including defense and civilian departments, for services ranging from voice and data networks to cybersecurity and managed IT. Their experience includes supporting complex, global operations, which aligns with USAID's requirements. However, like any large contractor, they have faced scrutiny and performance reviews on specific contracts over the years, necessitating ongoing oversight.

How does the annual average cost compare to similar government-wide telecommunications contracts?

The average annual cost of approximately $4.24 million for this USAID contract appears competitive when benchmarked against similar large-scale telecommunications awards. For instance, under the GSA EIS contract, task orders for comprehensive network services supporting agencies of similar size and global reach can range from several million to tens of millions of dollars annually. Major providers like AT&T, Verizon, and CenturyLink (now Lumen) compete for these large contracts. Given that this award covers both domestic and non-domestic operations for USAID, and includes a decade of service, the $4.24 million annual average suggests a reasonable valuation, likely benefiting from the economies of scale inherent in such long-term, broad-scope agreements.

What are the primary risks associated with a 10-year contract duration for network services?

A 10-year duration for network services presents several key risks. Firstly, technological obsolescence is a significant concern; network technologies evolve rapidly, and a decade-long commitment could lock USAID into potentially outdated infrastructure or services if not managed proactively. Secondly, the economic price adjustment (EPA) clause, while intended to mitigate inflation, introduces uncertainty in long-term budgeting, as costs could escalate beyond initial projections. Thirdly, vendor lock-in is a risk; transitioning critical network infrastructure away from a single provider after a decade can be complex and costly. Finally, changes in USAID's mission, operational needs, or security requirements over such a long period might not be fully accommodated by the initial contract scope, requiring potentially costly modifications or new procurements.

How does the 'full and open competition' impact taxpayer value for this contract?

Awarding this contract through 'full and open competition' is a significant positive indicator for taxpayer value. It means that all responsible sources were permitted to submit bids, fostering a competitive environment. This competition typically drives down prices as contractors vie for the award, and encourages innovation in service offerings. The presence of multiple bidders, even if only two submitted final offers, suggests that USAID received options and could select the most advantageous proposal based on a combination of price, technical merit, and past performance. This process is designed to ensure that taxpayer funds are used efficiently and that the government obtains the best possible services at a fair market price, minimizing the risk of overpayment.

What are the potential implications of the fixed-price with economic price adjustment (FPEPA) pricing structure?

The Fixed Price with Economic Price Adjustment (FPEPA) structure aims to balance cost certainty for the government with protection for the contractor against significant market fluctuations, particularly relevant for a 10-year contract. For taxpayers, this means the base price is fixed, providing some budget predictability. However, the EPA clause allows for adjustments based on specific economic indicators (e.g., inflation indices for labor, materials, or specific commodities). While this prevents contractors from absorbing potentially massive cost increases due to unforeseen economic events, it also means the total contract cost could exceed the initially projected amount. The specific indices and adjustment caps defined in the contract are crucial for understanding the potential upside risk to the government's budget.

What is the significance of the contract covering both domestic and non-domestic task orders?

The inclusion of both domestic and non-domestic task orders signifies a comprehensive, global support requirement for USAID's network infrastructure. This means the contract is designed to provide reliable telecommunications and network services not only within the United States but also in the various countries where USAID operates missions and programs. Supporting non-domestic locations often involves greater complexity due to varying international regulations, infrastructure availability, security concerns, and logistical challenges. Awarding this under a single contract vehicle to a provider like AT&T, which has global reach and experience, likely offers efficiencies and cost savings compared to managing separate contracts for domestic and international support.

Industry Classification

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

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

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: $182,708,495

Exercised Options: $103,741,167

Current Obligation: $42,402,268

Actual Outlays: $37,830,023

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