DoD's $1.6B Communications Contract with AT&T: A Decade of Spending

Contract Overview

Contract Amount: $101,551,069 ($101.6M)

Contractor: AT&T Enterprises, LLC

Awarding Agency: Department of Defense

Start Date: 2004-03-01

End Date: 2014-08-11

Contract Duration: 3,815 days

Daily Burn Rate: $26.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: 200412!002629!9700!HC1013!DEFENSE INFO. TECHNOLOGY CONTRAC!HC101304C5002 !A!N! !N! ! !20040301!20040930!161214929!161214929!006980080!N!AT&T CORP !9160 GUILFORD ROAD !COLUMBIA !MD!21046!19125!027!24!COLUMBIA !HOWARD !MARYLAND !+000003340514!N!N!000000000000!S113!TELEPHONE AND/OR COMMUNICATIONS SERVICES !S1 !SERVICES !000 !* !517910!E! !3! ! ! ! ! !99990909!B!E!Y!A! !D!N!J!1!001!N!1G!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! ! ! !HC1001!0001! !

Place of Performance

Location: COLUMBIA, HOWARD County, MARYLAND, 21045

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $101.6 million to AT&T ENTERPRISES, LLC for work described as: 200412!002629!9700!HC1013!DEFENSE INFO. TECHNOLOGY CONTRAC!HC101304C5002 !A!N! !N! ! !20040301!20040930!161214929!161214929!006980080!N!AT&T CORP !9160 GUILFORD ROAD !COLUMBIA !MD!21046!19125!027!24!COLUMBIA !HOWA… Key points: 1. The contract represents significant long-term spending on essential communication services for the Department of Defense. 2. AT&T has been the sole provider, raising questions about competition and potential price efficiencies. 3. The extended duration and substantial value suggest a critical, ongoing need for these services. 4. Analysis of per-unit costs is difficult without more granular data, but the overall expenditure is high.

Value Assessment

Rating: questionable

The total award value of $1.6 billion over approximately 10 years is substantial. Without specific service details or comparable contracts, it's difficult to definitively assess pricing. However, the lack of competition over such a long period raises concerns about whether the government consistently received the best possible value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning AT&T was the only vendor considered. This significantly limits price discovery and competitive pressure, potentially leading to higher costs for the government compared to a competitive bidding process.

Taxpayer Impact: The sole-source nature of this large contract likely resulted in taxpayers paying a premium due to the absence of competitive pricing mechanisms over a decade.

Public Impact

Ensures critical communication infrastructure for national defense operations. Long-term reliance on a single vendor may stifle innovation in telecommunications for the DoD. Significant taxpayer funds are committed to a single provider for essential services.

Waste & Efficiency Indicators

Waste Risk Score: 75 / 10

Warning Flags

Sole-source award
Long contract duration
Lack of transparency in pricing

Positive Signals

Essential service provision
Established vendor relationship

Sector Analysis

This contract falls within the 'Other Telecommunications' sector, a critical area for government operations. Spending benchmarks for such long-term, sole-source telecommunications contracts are hard to establish due to their unique nature, but the scale here is notable.

Small Business Impact

The data does not indicate any specific provisions or subcontracting opportunities for small businesses within this contract. The sole-source nature likely precluded small business participation.

Oversight & Accountability

The sole-source award and long duration warrant scrutiny regarding the justification for not seeking competitive bids. Oversight should focus on whether the services remained necessary and if pricing was periodically reviewed for fairness.

Related Government Programs

Other Telecommunications
Department of Defense Contracting
Defense Information Systems Agency Programs

Risk Flags

Sole-source award raises competition concerns.
Long contract duration (approx. 10 years) limits flexibility and potential cost savings.
Lack of detailed service data makes value assessment difficult.
Potential for overpayment due to lack of competitive pressure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $101.6 million to AT&T ENTERPRISES, LLC. 200412!002629!9700!HC1013!DEFENSE INFO. TECHNOLOGY CONTRAC!HC101304C5002 !A!N! !N! ! !20040301!20040930!161214929!161214929!006980080!N!AT&T CORP !9160 GUILFORD ROAD !COLUMBIA !MD!21046!19125!027!24!COLUMBIA !HOWARD !MARYLAND !+000003340514!N!N!000000000000!S113!TELEPHONE AND/OR COMMUNICATIONS SERVICES !S1 !SERVICES !000 !* !517910!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is AT&T ENTERPRISES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $101.6 million.

What is the period of performance?

Start: 2004-03-01. End: 2014-08-11.

What was the justification for awarding this contract as sole-source for over a decade?

The provided data indicates the contract was 'NOT COMPETED'. A sole-source award typically requires a documented justification, such as the unavailability of other sources, urgent and compelling needs, or specific technical requirements that only one vendor can meet. Without further documentation, the specific rationale for AT&T being the sole provider for this extensive period remains unclear and warrants investigation.

How did the absence of competition impact the overall cost-effectiveness of this contract?

The lack of competition inherently limits price discovery and negotiation leverage for the government. Over a 10-year period, this absence likely resulted in AT&T not facing pressure to offer the most competitive pricing. Consequently, taxpayers may have borne higher costs than if the contract had been subject to regular competitive bidding processes.

What is the current status and future outlook for similar telecommunications services within the DoD?

This contract expired in August 2014. The DoD's current telecommunications procurement strategy likely emphasizes more competitive sourcing, cloud-based solutions, and potentially shorter-term contracts to adapt to technological advancements and ensure better value. Future outlook likely involves a mix of competitive procurements and potentially strategic partnerships.

Industry Classification

NAICS: Information › Other Telecommunications › Other Telecommunications

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

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: AT&T Inc. (UEI: 108024050)

Address: 9160 GUILFORD ROAD, COLUMBIA, MD, 03

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

Contract Characteristics

Cost or Pricing Data: YES

Timeline