DoD's $278M telecommunications contract with Sprint awarded without competition, raising value-for-money concerns

Contract Overview

Contract Amount: $27,829,784 ($27.8M)

Contractor: Sprint Communications CO LP

Awarding Agency: Department of Defense

Start Date: 2004-04-01

End Date: 2014-04-30

Contract Duration: 3,681 days

Daily Burn Rate: $7.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 200412!002626!9700!HC1013!DEFENSE INFO. TECHNOLOGY CONTRAC!HC101304C5003 !A!N! !N! ! !20040401!20040930!603493677!012517181!006942395!N!SPRINT COMMUNICATIONS COMPANY !13221 WOODLAND PARK RD !HERNDON !VA!20171!36648!059!51!HERNDON !FAIRFAX !VIRGINIA !+000000877674!N!N!000000000000!S113!TELEPHONE AND/OR COMMUNICATIONS SERVICES !S1 !SERVICES !000 !* !517110!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!N! ! ! ! ! !HC1001!0001! !

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $27.8 million to SPRINT COMMUNICATIONS CO LP for work described as: 200412!002626!9700!HC1013!DEFENSE INFO. TECHNOLOGY CONTRAC!HC101304C5003 !A!N! !N! ! !20040401!20040930!603493677!012517181!006942395!N!SPRINT COMMUNICATIONS COMPANY !13221 WOODLAND PARK RD !HERNDON !VA!20171!36648!059!51!HERNDON !FAIR… Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Lack of competition suggests potential missed opportunities for cost savings and innovative solutions. 3. Long contract duration (10 years) may not align with rapidly evolving telecommunications technology. 4. Performance period spans a decade, raising questions about the continued relevance and cost-effectiveness of services. 5. Contractor is a large, established provider, but the absence of competition prevents benchmarking against peers. 6. The contract's value, while substantial, needs closer examination due to the non-competitive award.

Value Assessment

Rating: questionable

The contract's value is difficult to assess without competitive bids. Awarded for over $278 million, the lack of competition means there's no clear benchmark to determine if this pricing is favorable. Comparing it to similar sole-source telecommunications contracts within the DoD or other federal agencies would be necessary to gauge reasonableness. The long duration also introduces risk, as technology and market prices can change significantly over a decade, potentially leading to overpayment for outdated or overpriced services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. The data indicates no other bidders were considered. This approach bypasses the standard competitive procurement process, which typically involves soliciting offers from multiple vendors. While sole-source awards are permissible under specific circumstances (e.g., only one responsible source exists), the lack of competition here raises concerns about whether the government obtained the best possible price and terms.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without multiple bids, there's less incentive for the contractor to offer the lowest possible price, potentially leading to higher overall spending.

Public Impact

The primary beneficiary is the Department of Defense, which receives essential telecommunications services. Services include wired telecommunications, supporting critical communication infrastructure for military operations. The geographic impact is nationwide, as Sprint operates across the United States. Workforce implications are likely internal to Sprint, with potential for indirect impacts on DoD IT personnel managing these services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Long contract duration (10 years) risks obsolescence and unfavorable pricing in a dynamic tech market.
Lack of transparency in the procurement process due to non-competitive award.
Absence of performance metrics or specific service details in the provided data.
Potential for vendor lock-in given the long-term nature and sole-source award.

Positive Signals

Contract provides essential telecommunications services to a major federal agency.
Sprint is a large, established telecommunications provider with significant infrastructure.
Contract ensures continuity of critical communication services for national security.
The award is a definitive contract, suggesting a formal agreement is in place.

Sector Analysis

This contract falls within the Wired Telecommunications Carriers industry (NAICS code 517110), a sector characterized by large, established providers offering voice and data transmission services over wired networks. The market is often dominated by a few major players due to high infrastructure costs. Federal spending in this sector supports essential communication needs for government operations. Benchmarking would involve comparing pricing and service levels against other large-scale telecommunications contracts awarded to major carriers like AT&T, Verizon, or Lumen.

Small Business Impact

The provided data does not indicate any small business set-aside provisions or subcontracting requirements for this contract. As a sole-source award to a large telecommunications provider, it is unlikely to have direct benefits for small businesses unless they are part of Sprint's supply chain. The absence of set-asides means opportunities for small business participation were not actively pursued through this specific procurement.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the contracting officer's representative (COR) within the Department of Defense, responsible for monitoring performance and ensuring compliance with contract terms. Accountability measures are inherent in the contract's fixed-price nature, though the lack of competition limits external accountability. Transparency is reduced due to the sole-source award; however, contract details may be available through federal procurement databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

General Services Administration (GSA) Schedule Contracts for Telecommunications
Defense Information Technology Contracting Office (DITCO) Contracts
Federal Communications Commission (FCC) Regulations
Other Sole-Source IT and Communications Contracts

Risk Flags

Sole-source award lacks competitive justification.
Long contract duration may lead to technology obsolescence and unfavorable pricing.
Potential for overpayment due to lack of price competition.
Limited transparency regarding specific services and performance metrics.
Absence of small business participation opportunities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.8 million to SPRINT COMMUNICATIONS CO LP. 200412!002626!9700!HC1013!DEFENSE INFO. TECHNOLOGY CONTRAC!HC101304C5003 !A!N! !N! ! !20040401!20040930!603493677!012517181!006942395!N!SPRINT COMMUNICATIONS COMPANY !13221 WOODLAND PARK RD !HERNDON !VA!20171!36648!059!51!HERNDON !FAIRFAX !VIRGINIA !+000000877674!N!N!000000000000!S113!TELEPHONE AND/OR COMMUNICATIONS SERVICES !S1 !SERVICES !000 !* !517110!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is SPRINT COMMUNICATIONS CO LP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $27.8 million.

What is the period of performance?

Start: 2004-04-01. End: 2014-04-30.

What specific telecommunications services were included in this $278 million contract?

The provided data indicates the contract was for 'TELEPHONE AND/OR COMMUNICATIONS SERVICES' under NAICS code 517110 (Wired Telecommunications Carriers). While the exact breakdown of services is not detailed, this typically encompasses a range of offerings such as voice transmission, data services, dedicated lines, and potentially related network management or support. Given the substantial value and long duration, it likely covered a broad spectrum of essential communication needs for the Department of Defense, potentially including long-distance calling, dedicated circuits for data transfer, and integrated voice/data solutions across various DoD facilities.

Why was this contract awarded on a sole-source basis instead of being competed?

The provided data explicitly states the contract was 'NOT COMPETED' and awarded as a 'SOLE-SOURCE'. Federal Acquisition Regulation (FAR) Part 6 outlines circumstances under which a contract may be awarded without full and open competition. Common justifications include that only one responsible source is available, or that a compelling urgency dictates a non-competitive award. Without further documentation from the awarding agency (Department of Defense), the specific justification for this sole-source award remains unclear. However, such awards are typically reserved for situations where competition is not feasible or practical, such as unique capabilities or proprietary technologies.

How does the 10-year duration of this contract impact its value and relevance?

A 10-year duration (April 1, 2004, to April 30, 2014) for a telecommunications contract is exceptionally long, especially considering the rapid pace of technological advancement in this sector. This extended period introduces significant risks. Firstly, the technology procured may become obsolete before the contract expires, rendering the services outdated or less efficient. Secondly, market prices for telecommunications services can fluctuate dramatically over a decade; a fixed price established at the beginning might become uncompetitive as newer, more cost-effective solutions emerge. This long duration, coupled with the sole-source award, raises concerns about whether the DoD secured the best possible value throughout the contract's life.

What are the potential risks associated with a sole-source award of this magnitude?

The primary risk of a sole-source award, particularly one valued at over $278 million, is the lack of price competition. This absence means the government cannot be certain it is receiving the most favorable pricing available in the market. It removes the incentive for the contractor to offer its best price. Furthermore, it limits the government's ability to explore innovative solutions or alternative providers that might offer better performance or value. This can lead to overspending and potentially hinder the adoption of more advanced technologies. There's also a risk of vendor lock-in, making it difficult and costly to switch providers later.

Can the performance of Sprint Communications Company LP be assessed based on this contract data?

The provided data offers limited insight into the specific performance of Sprint Communications Company LP under this contract. We know the contract was for telecommunications services and was awarded as a definitive, firm-fixed-price contract. However, the data does not include details on performance metrics, service level agreements (SLAs), or any quality assurance reviews. While the contract was active for its full duration, this does not automatically imply satisfactory performance. A comprehensive assessment would require access to performance reports, payment histories, and any documented issues or commendations related to the services provided by Sprint.

How does this contract compare to other federal telecommunications spending?

This contract represents a significant portion of federal spending within the telecommunications sector, particularly for wired services. Its $278 million value over 10 years places it among large-scale procurements. However, federal telecommunications spending is vast and diverse, encompassing everything from satellite communications to network infrastructure managed through various contract vehicles, including GSA Schedules and other large IDIQ contracts. Comparing this specific sole-source award requires looking at similar large, long-term telecommunications contracts, especially those awarded competitively, to benchmark pricing and service structures. The sole-source nature makes direct value comparison challenging.

Industry Classification

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

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Brightline Trains Florida LLC (UEI: 690651989)

Address: 13221 WOODLAND PARK RD, HERNDON, VA, 20171

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: YES

Timeline