HHS awards $9.87M for Internet Connection Services to Level 3 Telecom Holdings, LLC

Contract Overview

Contract Amount: $9,873,753 ($9.9M)

Contractor: Level 3 Telecom Holdings, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2023-03-01

End Date: 2027-02-28

Contract Duration: 1,460 days

Daily Burn Rate: $6.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: INTERNET CONNECTION

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $9.9 million to LEVEL 3 TELECOM HOLDINGS, LLC for work described as: INTERNET CONNECTION Key points: 1. Contract awarded via full and open competition, suggesting market availability. 2. Significant contract value for wired telecommunications services. 3. Potential for cost savings given the firm fixed price structure. 4. Long-term duration (4 years) indicates a sustained need for services.

Value Assessment

Rating: good

The contract value of $9.87M over 4 years averages $2.47M annually. Benchmarking against similar large-scale telecommunications contracts is difficult without specific service details, but the price appears reasonable for comprehensive internet connectivity.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This method generally promotes competitive pricing and ensures the government receives fair market value.

Taxpayer Impact: The use of full and open competition is expected to yield a cost-effective solution, benefiting taxpayers by ensuring competitive pricing for essential internet services.

Public Impact

Ensures reliable internet connectivity for critical NIH research and operations. Supports ongoing health research and public health initiatives. Provides essential infrastructure for federal agency communication and data transfer.

Waste & Efficiency Indicators

Waste Risk Score: 67 / 10

Warning Flags

Potential for vendor lock-in if service levels degrade post-award.
Reliance on a single vendor for critical infrastructure.

Positive Signals

Awarded through full and open competition.
Firm fixed price contract provides cost certainty.
Long-term contract ensures service continuity.

Sector Analysis

This contract falls within the Wired Telecommunications Carriers sector, which is crucial for government operations. Spending in this sector is generally stable, driven by the need for reliable data transmission and communication infrastructure.

Small Business Impact

The data does not indicate any specific provisions or set-asides for small businesses in this contract. Larger telecommunications providers typically dominate this market segment.

Oversight & Accountability

The contract is a delivery order under a larger agreement, suggesting existing oversight mechanisms. The firm fixed price structure provides some cost control, but ongoing monitoring of service delivery is essential.

Related Government Programs

Wired Telecommunications Carriers
Department of Health and Human Services Contracting
National Institutes of Health Programs

Risk Flags

Long-term reliance on a single provider.
Potential for price increases in future contract renewals.
Service disruptions could impact critical research.
Vendor's financial stability and long-term viability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $9.9 million to LEVEL 3 TELECOM HOLDINGS, LLC. INTERNET CONNECTION

Who is the contractor on this award?

The obligated recipient is LEVEL 3 TELECOM HOLDINGS, LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $9.9 million.

What is the period of performance?

Start: 2023-03-01. End: 2027-02-28.

What specific performance metrics are included in the contract to ensure service quality and reliability?

The provided data does not detail specific performance metrics. However, for a contract of this nature and value, it is expected that Service Level Agreements (SLAs) would be defined, outlining uptime guarantees, latency limits, and support response times. These metrics are crucial for ensuring the government receives the expected quality of service and for holding the vendor accountable.

How does the annual cost compare to industry benchmarks for similar internet services for federal agencies?

Without detailed specifications of bandwidth, service level agreements, and geographic coverage, a precise benchmark is challenging. However, the estimated annual cost of approximately $2.47 million appears within a reasonable range for robust, dedicated internet connectivity supporting a large federal agency like NIH. Market research and competitive bidding are key to validating this price point.

What is the contingency plan if Level 3 Telecom Holdings, LLC fails to meet contractual obligations?

Standard government contracts include clauses for remedies in case of vendor default, such as termination for cause and potential penalties. Given this is a delivery order, the underlying contract likely outlines dispute resolution processes and the government's right to seek alternative solutions. The agency would typically have procedures to transition services if necessary.

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 - END USER

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Lumen Technologies, Inc

Address: 931 14TH ST, DENVER, CO, 80202

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $12,290,353

Exercised Options: $9,873,753

Current Obligation: $9,873,753

Actual Outlays: $6,570,677

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F0426R

IDV Type: FSS

Timeline