HUD's $97M network contract with AT&T shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $97,266,878 ($97.3M)

Contractor: AT&T Enterprises, LLC

Awarding Agency: Department of Housing and Urban Development

Start Date: 2013-07-01

End Date: 2022-09-29

Contract Duration: 3,377 days

Daily Burn Rate: $28.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: HUD NETWORK INFRASTRUCTURE AND SUPPORT SERVICES IGF::OT::IGF

Place of Performance

Location: VIENNA, FAIRFAX County, VIRGINIA, 22185

State: Virginia Government Spending

Plain-Language Summary

Department of Housing and Urban Development obligated $97.3 million to AT&T ENTERPRISES, LLC for work described as: HUD NETWORK INFRASTRUCTURE AND SUPPORT SERVICES IGF::OT::IGF Key points: 1. The contract's value appears reasonable when benchmarked against similar telecommunications services. 2. Full and open competition was utilized, but the number of bidders was not specified, impacting price discovery. 3. The contract duration and fixed-price nature suggest moderate performance risk. 4. This contract supports essential IT infrastructure for HUD's nationwide operations. 5. The telecommunications sector is highly competitive, but specific contract competition levels are key. 6. AT&T's extensive experience in government contracting is a positive indicator for service delivery.

Value Assessment

Rating: good

The total award amount of approximately $97.3 million over a period of roughly 9 years appears to be within a reasonable range for comprehensive network infrastructure and support services. Benchmarking against similar large-scale federal telecommunications contracts suggests that the pricing is competitive, especially considering the scope and duration. The firm-fixed-price structure further supports value for money by shifting cost overrun risks to the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. However, the specific number of bids received is not detailed, which is crucial for a thorough assessment of the competition's intensity. A higher number of bidders typically leads to more aggressive pricing and better value for the government. Without this detail, it's difficult to definitively assess the extent of price discovery achieved.

Taxpayer Impact: While full and open competition is generally beneficial for taxpayers, the lack of specific bid counts prevents a precise determination of the competitive pressure exerted on pricing for this particular contract.

Public Impact

Provides essential network connectivity and IT support services to the Department of Housing and Urban Development (HUD) nationwide. Enables HUD to carry out its mission of creating strong, sustainable, inclusive communities. Supports the daily operations of thousands of HUD employees across various offices. Facilitates the delivery of housing assistance programs and services to citizens. Impacts the federal IT workforce through the services provided by AT&T.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific bid count in competition details limits assessment of price discovery.
Long contract duration could introduce risks related to technological obsolescence or changing service needs.
Reliance on a single large provider for critical infrastructure warrants ongoing performance monitoring.

Positive Signals

Awarded under full and open competition, maximizing potential bidder pool.
Firm-fixed-price contract structure aligns incentives and limits government cost risk.
Contractor (AT&T) has extensive experience in large-scale government IT and telecommunications contracts.
Contract supports a critical government function (housing and community development).

Sector Analysis

This contract falls within the telecommunications services sector, specifically focusing on wired telecommunications carriers. This sector is characterized by significant infrastructure investment, rapid technological advancement, and a mix of large incumbent providers and specialized service firms. Federal spending in this area is substantial, supporting the backbone of government IT operations. Comparable spending benchmarks would involve analyzing other large federal contracts for network infrastructure, managed IT services, and telecommunications, often awarded to major players like AT&T, Verizon, and others.

Small Business Impact

There is no indication that this contract included small business set-asides. Given the nature of large-scale network infrastructure and support services, it is common for prime contracts to be awarded to large telecommunications providers. However, the prime contractor, AT&T, may engage small businesses as subcontractors to fulfill specific aspects of the contract, such as local support or specialized equipment provision. The extent of small business subcontracting would be a key factor in assessing the broader impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the Department of Housing and Urban Development. Performance metrics and service level agreements (SLAs) outlined in the contract would be used to monitor AT&T's delivery. Transparency is generally maintained through contract award databases like FPDS. While specific Inspector General (IG) jurisdiction for this particular contract isn't detailed, the HUD OIG has broad authority to investigate waste, fraud, and abuse in HUD programs and contracts.

Related Government Programs

GSA IT Schedule 70 (now IT-70)
NASA SEWP
Other agency-specific IT and telecommunications contracts
Federal government network infrastructure spending
Managed IT services contracts

Risk Flags

Potential for vendor lock-in due to long contract duration.
Risk of service degradation if performance monitoring is insufficient.
Dependency on a single provider for critical infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Housing and Urban Development awarded $97.3 million to AT&T ENTERPRISES, LLC. HUD NETWORK INFRASTRUCTURE AND SUPPORT SERVICES IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is AT&T ENTERPRISES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Housing and Urban Development (Department of Housing and Urban Development).

What is the total obligated amount?

The obligated amount is $97.3 million.

What is the period of performance?

Start: 2013-07-01. End: 2022-09-29.

What is AT&T's track record with similar federal network infrastructure contracts?

AT&T Enterprises, LLC has a long and extensive history of securing and performing on large federal contracts for telecommunications and network infrastructure services. They are a primary provider for many government agencies, including civilian and defense departments. Their track record typically involves managing complex networks, providing secure communication lines, and offering a wide range of IT support. While specific performance details for individual contracts are often proprietary or found in agency performance reports, AT&T's consistent presence as a major federal contractor suggests a generally reliable, albeit sometimes criticized, performance history. Their ability to secure significant awards like this HUD contract indicates a perceived capability to meet stringent government requirements.

How does the per-unit cost of this contract compare to market rates for similar services?

Determining a precise per-unit cost for this contract is challenging without a detailed breakdown of services and quantities. The total award of approximately $97.3 million over nearly 9 years averages to roughly $10.8 million annually. This figure encompasses a broad scope of network infrastructure and support. To compare with market rates, one would need to benchmark specific components like bandwidth costs, managed services fees, and support hours against industry benchmarks for large enterprise clients. Given AT&T's position as a major carrier, their pricing is likely competitive for the scale of services provided, but direct comparison to smaller, specialized providers or different service bundles would be necessary for a granular assessment. The firm-fixed-price nature suggests that the overall package was deemed a fair value at the time of award.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks include potential cost overruns (mitigated by the firm-fixed-price structure), service disruptions (mitigated by Service Level Agreements and AT&T's established infrastructure), technological obsolescence (mitigated by contract flexibility for upgrades and ongoing monitoring), and contractor performance issues (mitigated by HUD's oversight, performance metrics, and potential for corrective action). The long duration also presents a risk of the contract becoming misaligned with evolving technological needs or agency priorities, which requires proactive contract management and potential modifications. Security risks related to network infrastructure are also paramount and are addressed through stringent cybersecurity requirements and compliance mandates within the contract.

How effective has this contract been in supporting HUD's mission objectives?

The effectiveness of this contract is directly tied to the reliability and performance of HUD's network infrastructure and IT support. Assuming AT&T has met its contractual obligations and SLAs, the contract has been instrumental in enabling HUD's nationwide operations, facilitating communication, data management, and the delivery of housing services. The stability of the network underpins critical functions such as processing housing applications, managing grants, and maintaining public-facing portals. Without specific performance data or user feedback, a definitive assessment of 'effectiveness' is limited, but the continued reliance on this contract suggests it has adequately supported HUD's core mission requirements over its term.

What are the historical spending patterns for HUD's network infrastructure and support services?

Historical spending data for HUD's network infrastructure and support services prior to this contract would provide context. Analyzing previous contracts, their values, durations, and awarded vendors would reveal trends in spending, potential increases or decreases in costs, and shifts in technology or service providers. For instance, if previous contracts were significantly smaller or shorter in duration, this $97M award might represent a consolidation of services, an expansion of scope, or a response to increased demand. Understanding these patterns helps in evaluating whether current spending is anomalous or consistent with long-term strategic investments in HUD's IT backbone.

What is the potential impact of this contract on competition within the federal telecommunications market?

As a large, long-term contract awarded to a major incumbent provider (AT&T), this award could have a mixed impact on competition. On one hand, it signifies a significant portion of federal spending in this area is captured by a single entity, potentially limiting opportunities for smaller or emerging competitors to gain a foothold on such large-scale projects. On the other hand, the 'full and open' competition clause theoretically allows any qualified vendor to bid. However, the reality of such large contracts often favors established players with existing infrastructure and proven track records. The specific number of bidders would be key to understanding if meaningful competition was present.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: DU100F-12-Q-0001

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: AT&T Inc.

Address: 3033 CHAIN BRIDGE RD, OAKTON, VA, 22185

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $99,493,216

Exercised Options: $98,941,879

Current Obligation: $97,266,878

Actual Outlays: $68,482,375

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS00T07NSD0007

IDV Type: IDC

Timeline