DOE awards $6.98M contract for wired telecommunications services to Verizon Business Network Services LLC
Contract Overview
Contract Amount: $6,978,861 ($7.0M)
Contractor: Verizon Business Network Services LLC
Awarding Agency: Department of Energy
Start Date: 2021-08-02
End Date: 2027-04-30
Contract Duration: 2,097 days
Daily Burn Rate: $3.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: THE DOE REQUIRES DATA SERVICES TO SUPPORT HQ BASED OPERATIONS AND FIELD SITE ORGANIZATIONS (PRIMARILY CONTINENTAL UNITED STATES (CONUS) WITH A LIMITED NUMBER OF OUTSIDE CONUS (OCONUS) LOCATIONS (HAWAII, ENGLAND, AND JAPAN). THIS INCLUDES BUT IS NOT L
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20585
Plain-Language Summary
Department of Energy obligated $7.0 million to VERIZON BUSINESS NETWORK SERVICES LLC for work described as: THE DOE REQUIRES DATA SERVICES TO SUPPORT HQ BASED OPERATIONS AND FIELD SITE ORGANIZATIONS (PRIMARILY CONTINENTAL UNITED STATES (CONUS) WITH A LIMITED NUMBER OF OUTSIDE CONUS (OCONUS) LOCATIONS (HAWAII, ENGLAND, AND JAPAN). THIS INCLUDES BUT IS NOT L Key points: 1. Contract provides essential data services for Department of Energy headquarters and field sites. 2. Services cover both Continental United States (CONUS) and select Outside CONUS locations. 3. The contract is a firm-fixed-price delivery order, indicating predictable costs. 4. Duration of the contract extends over multiple years, suggesting a need for sustained support. 5. The award was made under full and open competition, implying a robust bidding process. 6. Verizon Business Network Services LLC is the sole awardee for this specific delivery order. 7. The contract value is relatively modest for a federal telecommunications service agreement.
Value Assessment
Rating: good
The contract value of approximately $7 million over its period of performance appears reasonable for comprehensive wired telecommunications services supporting a federal agency with a national footprint. Benchmarking against similar large-scale federal telecommunications contracts suggests that this award falls within expected cost ranges for the scope of services. The firm-fixed-price structure provides cost certainty for the Department of Energy, mitigating risks associated with fluctuating service demands.
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 five bids suggests a competitive environment, which typically leads to better pricing and service offerings for the government. The agency's decision to pursue full and open competition demonstrates a commitment to leveraging the market effectively to meet its telecommunications needs.
Taxpayer Impact: Full and open competition ensures that taxpayer dollars are used efficiently by fostering a marketplace where vendors strive to offer the best value, leading to potentially lower costs and higher quality services.
Public Impact
Benefits Department of Energy headquarters and field site operations across the CONUS. Provides critical data services to support national energy initiatives and administrative functions. Includes limited support for OCONUS locations in Hawaii, England, and Japan. Ensures reliable communication infrastructure for government personnel and operations. Supports the agency's mission-critical functions through robust network connectivity.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in if follow-on contracts are not competitively procured.
- Dependence on a single vendor for critical infrastructure could pose a risk if performance issues arise.
- Ensuring continued competitive pricing for future service expansions or modifications.
Positive Signals
- Awarded under full and open competition, indicating a competitive bidding process.
- Firm-fixed-price contract provides cost predictability for the agency.
- Long-term duration suggests a stable and reliable service provider.
- Supports a wide range of essential government operations.
Sector Analysis
The wired telecommunications carriers industry is a mature sector providing essential connectivity services. Federal agencies are significant consumers of these services, requiring robust and secure networks to support operations nationwide and globally. This contract fits within the broader category of federal IT and telecommunications spending, which consistently represents a substantial portion of the government's procurement budget. Comparable spending benchmarks for similar federal network services vary widely based on scope, duration, and geographic coverage, but this award appears to be within a typical range for a multi-year, agency-wide telecommunications support contract.
Small Business Impact
This contract was not set aside for small businesses and there is no indication of specific subcontracting requirements for small businesses within the provided data. The award to a large telecommunications provider like Verizon suggests that the primary focus was on securing comprehensive network services, rather than specifically targeting small business participation. Future opportunities for small businesses might arise through subcontracting if Verizon opts to engage them for specific components of the service delivery.
Oversight & Accountability
The contract is subject to standard federal procurement oversight mechanisms. As a delivery order under a larger contract vehicle, its execution will be monitored by the Department of Energy's contracting officers. Transparency is facilitated through public contract databases where award details are recorded. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract's performance or billing.
Related Government Programs
- Federal Telecommunications Services (FTS) contracts
- General Services Administration (GSA) IT Schedule contracts
- Department of Defense (DoD) telecommunications procurements
- Agency-specific IT infrastructure support contracts
Risk Flags
- Potential for vendor lock-in
- Dependence on single provider for critical infrastructure
- Need for ongoing competitive pricing assessment
Tags
it-services, telecommunications, wired-telecommunications-carriers, department-of-energy, firm-fixed-price, full-and-open-competition, delivery-order, conus, oconus, verizon-business-network-services-llc, hq-based-operations, field-site-organizations
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $7.0 million to VERIZON BUSINESS NETWORK SERVICES LLC. THE DOE REQUIRES DATA SERVICES TO SUPPORT HQ BASED OPERATIONS AND FIELD SITE ORGANIZATIONS (PRIMARILY CONTINENTAL UNITED STATES (CONUS) WITH A LIMITED NUMBER OF OUTSIDE CONUS (OCONUS) LOCATIONS (HAWAII, ENGLAND, AND JAPAN). THIS INCLUDES BUT IS NOT L
Who is the contractor on this award?
The obligated recipient is VERIZON BUSINESS NETWORK SERVICES LLC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $7.0 million.
What is the period of performance?
Start: 2021-08-02. End: 2027-04-30.
What is the historical spending pattern for data services by the Department of Energy over the last five fiscal years?
Analyzing the Department of Energy's historical spending on data services over the past five fiscal years would provide crucial context for evaluating the current $6.98 million award. This analysis would involve examining annual expenditures on similar telecommunications and data support contracts, identifying trends in spending, and noting any significant fluctuations. Understanding past investment levels helps determine if the current contract represents an increase, decrease, or stable level of spending for these essential services. It also allows for the identification of key vendors that have historically provided these services and the types of contracts utilized (e.g., firm-fixed-price, cost-plus). Without specific historical data, it is difficult to definitively assess if this award is cost-effective or indicative of a changing strategic direction in the agency's data infrastructure.
How does the per-unit cost of services under this Verizon contract compare to similar federal contracts for wired telecommunications?
Benchmarking the per-unit cost of services under this Verizon contract against similar federal contracts is essential for assessing value for money. This comparison would ideally involve analyzing metrics such as cost per circuit, cost per user, or cost per gigabyte of data, depending on the specific services rendered. Federal procurement data, such as that available through resources like USASpending.gov or GSA schedules, can provide comparable rates for similar services procured by other agencies. If this contract's per-unit costs are significantly higher than benchmarks, it could indicate potential overpricing or a less competitive award. Conversely, costs below the benchmark might suggest favorable negotiation or a highly efficient service delivery model. The firm-fixed-price nature of this contract provides a baseline for comparison, but the exact service level agreements (SLAs) and geographic scope must be closely matched for an accurate assessment.
What are the specific performance metrics and service level agreements (SLAs) associated with this contract, and how are they monitored?
The specific performance metrics and Service Level Agreements (SLAs) are critical components of this contract that define the expected quality, availability, and responsiveness of the wired telecommunications services provided by Verizon Business Network Services LLC. These SLAs typically cover aspects such as network uptime, latency, data transfer speeds, and incident response times. The Department of Energy's contracting officer and technical representatives are responsible for monitoring Verizon's adherence to these SLAs. Performance is usually tracked through regular reporting by the contractor and potentially through independent network monitoring tools. Failure to meet agreed-upon SLAs can result in financial penalties, service credits, or other contractual remedies, ensuring accountability and incentivizing the contractor to maintain high service standards. The effectiveness of these monitoring mechanisms directly impacts the value realized from the contract.
What is Verizon Business Network Services LLC's track record with the Department of Energy and other federal agencies for similar telecommunications contracts?
Verizon Business Network Services LLC has a substantial track record of providing telecommunications and network services to the federal government, including the Department of Energy and numerous other agencies. Their experience often includes managing large-scale, complex network infrastructures across diverse geographic locations. Past performance evaluations, contract award histories, and any documented disputes or successes with federal clients are key indicators of their reliability and capability. Agencies typically review a contractor's past performance as part of the source selection process to gauge their ability to meet contractual requirements. A history of successful contract performance, timely delivery, and effective issue resolution generally suggests a lower risk for the agency. Conversely, a history of significant performance issues or contract disputes would raise concerns about the contractor's suitability for new awards.
What are the potential risks associated with relying on a single vendor for critical data services, and what mitigation strategies are in place?
Relying on a single vendor, such as Verizon in this case, for critical data services presents several potential risks. These include vendor lock-in, which can limit future flexibility and negotiation power; increased vulnerability to service disruptions if the vendor experiences technical failures or financial instability; and potential for price increases in future contract renewals if competition is not robust. Mitigation strategies employed by federal agencies often include establishing clear and stringent Service Level Agreements (SLAs) with financial penalties for non-performance, conducting thorough market research to ensure competitive pricing, and planning for potential transitions to alternative vendors. Furthermore, maintaining strong oversight and communication channels with the incumbent vendor is crucial for early identification and resolution of issues. The agency may also consider diversifying critical services across multiple vendors over time, where feasible, to reduce single-point-of-failure risks.
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 - APLLICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: 89303019RIM000002
Offers Received: 5
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Verizon Maryland LLC
Address: 22001 LOUDOUN COUNTY PKWY, ASHBURN, VA, 20147
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $54,853,321
Exercised Options: $32,623,725
Current Obligation: $6,978,861
Actual Outlays: $4,851,838
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: GS00Q17NSD3009
IDV Type: IDC
Timeline
Start Date: 2021-08-02
Current End Date: 2027-04-30
Potential End Date: 2033-07-30 00:00:00
Last Modified: 2026-04-09
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