HHS Awards $62.4M for Phone Lines to AT&T, Lacking Competition
Contract Overview
Contract Amount: $62,403 ($62.4K)
Contractor: AT&T Enterprises, LLC
Awarding Agency: Department of Health and Human Services
Start Date: 2024-01-16
End Date: 2026-02-15
Contract Duration: 761 days
Daily Burn Rate: $82/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: PHONE LINES- PAWNEE
Place of Performance
Location: PAWNEE, PAWNEE County, OKLAHOMA, 74058
State: Oklahoma Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $62,402.8 to AT&T ENTERPRISES, LLC for work described as: PHONE LINES- PAWNEE Key points: 1. Significant contract value of $62.4 million over two years. 2. Sole provider AT&T suggests limited competition and potential overpricing. 3. Risk of inflated costs due to lack of competitive bidding. 4. Telecommunications sector, essential for government operations.
Value Assessment
Rating: questionable
The contract value of $62.4 million for phone lines over approximately two years appears high given the lack of competitive bidding. Without comparison to similar contracts awarded through competitive processes, it's difficult to definitively assess value for money.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source or limited competition award. This approach bypasses the price discovery benefits of a competitive process, potentially leading to higher costs for taxpayers.
Taxpayer Impact: The lack of competition raises concerns about whether taxpayers are receiving the best possible price for these essential telecommunication services.
Public Impact
Government reliance on AT&T for critical phone infrastructure. Potential for higher costs impacting agency budgets. Questions about the necessity of a sole-source award for telecommunications.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpricing
- Sole-source award
Positive Signals
- Essential service provision
- Clear contract duration
Sector Analysis
The telecommunications sector is vital for government operations, providing essential communication services. Spending benchmarks for wired telecommunications carriers can vary widely based on service scope and duration, but a lack of competition often inflates costs.
Small Business Impact
There is no indication that small businesses were involved in this procurement, as it was awarded directly to AT&T Enterprises, LLC. This suggests a missed opportunity for small business participation.
Oversight & Accountability
Oversight is needed to ensure AT&T fulfills the contract terms and to investigate the justification for a sole-source award. Future procurements should prioritize competitive bidding to ensure cost-effectiveness.
Related Government Programs
- Wired Telecommunications Carriers
- Department of Health and Human Services Contracting
- Office of the Assistant Secretary for Financial Resources Programs
Risk Flags
- Lack of competitive bidding
- Potential for inflated pricing
- Sole-source award justification unclear
- Missed small business opportunities
Tags
wired-telecommunications-carriers, department-of-health-and-human-services, ok, purchase-order, under-100k
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $62,402.8 to AT&T ENTERPRISES, LLC. PHONE LINES- PAWNEE
Who is the contractor on this award?
The obligated recipient is AT&T ENTERPRISES, LLC.
Which agency awarded this contract?
Awarding agency: Department of Health and Human Services (Office of the Assistant Secretary for Financial Resources).
What is the total obligated amount?
The obligated amount is $62,402.8.
What is the period of performance?
Start: 2024-01-16. End: 2026-02-15.
What is the justification for awarding this contract to AT&T without competition, and what steps were taken to ensure fair pricing?
The provided data indicates the contract was 'NOT COMPETED'. Without further documentation, the specific justification remains unclear. Agencies typically sole-source when only one vendor can provide the required service or in emergency situations. However, for standard telecommunications, competitive bidding is usually feasible and preferred to ensure fair pricing and value for taxpayer funds.
What is the risk associated with a sole-source award for essential phone line services, particularly regarding long-term costs?
The primary risk of a sole-source award is the potential for inflated pricing, as the vendor faces no competitive pressure to offer the lowest possible cost. Over time, this can lead to significant overspending by the government. Additionally, it can stifle innovation and limit the government's ability to leverage new technologies or more cost-effective solutions available from other providers.
How does this contract's structure and lack of competition impact the overall effectiveness of federal spending in the telecommunications sector?
This contract's sole-source nature raises concerns about the effectiveness of federal spending. By not engaging in competitive bidding, the government may be overpaying for services, diverting funds that could be used for other critical needs. It also limits the agency's ability to explore potentially more efficient or advanced telecommunications solutions offered by a wider market.
Industry Classification
NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
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: $78,604
Exercised Options: $62,403
Current Obligation: $62,403
Actual Outlays: $21,661
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Timeline
Start Date: 2024-01-16
Current End Date: 2026-02-15
Potential End Date: 2027-02-15 00:00:00
Last Modified: 2026-04-06
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