DoD's $15M VPNs Access and Transport Service contract awarded to AT&T Enterprises, LLC

Contract Overview

Contract Amount: $14,973,968 ($15.0M)

Contractor: AT&T Enterprises, LLC

Awarding Agency: Department of Defense

Start Date: 2019-12-20

End Date: 2026-12-19

Contract Duration: 2,556 days

Daily Burn Rate: $5.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: IT

Official Description: VPNS ACCESS AND TRANSPORT SERVICE

Place of Performance

Location: FORT LEE, PETERSBURG CITY County, VIRGINIA, 23801

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $15.0 million to AT&T ENTERPRISES, LLC for work described as: VPNS ACCESS AND TRANSPORT SERVICE Key points: 1. Value for money appears fair given the fixed-price with economic price adjustment structure, though long-term cost trends warrant monitoring. 2. Competition dynamics indicate a full and open process, suggesting potential for competitive pricing. 3. Risk indicators include the long duration of the contract and the potential for price escalation due to economic adjustments. 4. Performance context is within the scope of essential telecommunications services for defense operations. 5. Sector positioning places this contract within the wired telecommunications carriers industry, supporting critical IT infrastructure.

Value Assessment

Rating: fair

The contract's total value of approximately $15 million over its duration suggests a moderate investment for essential VPN services. Benchmarking against similar government-wide contracts for telecommunications transport services would provide a clearer picture of value. The fixed-price with economic price adjustment (FPEPA) structure aims to balance cost certainty with market fluctuations, but the actual realized value depends on the extent of price adjustments over the contract's life. Without specific per-unit cost data or comparisons to commercial equivalents, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of 3 bidders suggests a reasonable level of competition for this telecommunications service. A competitive process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: A full and open competition is beneficial for taxpayers as it increases the likelihood of obtaining services at competitive market rates, preventing potential overspending that could occur with less competitive solicitations.

Public Impact

The primary beneficiaries are Department of Defense personnel requiring secure remote access to networks and data. Services delivered include VPN access and transport, crucial for maintaining operational continuity and security. The geographic impact is likely nationwide, supporting military and civilian personnel across various locations. Workforce implications include enabling secure remote work capabilities for a significant portion of the DoD workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost increases due to economic price adjustments over the contract's extended duration.
Reliance on a single vendor for critical VPN access and transport services could pose a risk if service levels degrade.
The long contract duration (2556 days) may limit the government's ability to adopt newer, potentially more cost-effective technologies.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
The fixed-price component provides some cost predictability for the government.
AT&T is a well-established telecommunications provider with a track record in government contracting.

Sector Analysis

This contract falls within the broader telecommunications sector, specifically supporting wired telecommunications carriers (NAICS 517110). This sector is characterized by significant infrastructure investment and evolving technological landscapes. The market size for government telecommunications services is substantial, with agencies constantly seeking reliable and secure connectivity solutions. This contract represents a component of the Defense Information Systems Agency's (DISA) efforts to provide essential network services to the DoD, aligning with broader trends in secure cloud and remote access solutions.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (SB is false). There is no explicit information on subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless AT&T voluntarily includes small businesses in its subcontracting efforts.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the Defense Information Systems Agency (DISA). Accountability measures are embedded in the contract's performance standards and delivery requirements. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

General Services Administration (GSA) IT Schedule contracts
Other Transaction Authority (OTA) agreements for technology modernization
Department of Defense Enterprise Software Initiative (ESI)
Network Modernization Programs

Risk Flags

Potential for cost overruns due to economic price adjustments.
Risk of technological obsolescence given the long contract duration.
Dependency on a single provider for critical network services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.0 million to AT&T ENTERPRISES, LLC. VPNS ACCESS AND TRANSPORT SERVICE

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 $15.0 million.

What is the period of performance?

Start: 2019-12-20. End: 2026-12-19.

What is AT&T Enterprises, LLC's track record with similar government VPN and transport service contracts?

AT&T Enterprises, LLC, as a major telecommunications provider, has a long history of holding numerous government contracts for various communication services, including VPN access and network transport. Analyzing their past performance on similar large-scale contracts awarded by agencies like DISA or other branches of the DoD would reveal their reliability, adherence to service level agreements, and ability to manage complex network deployments. Past performance reviews, contract termination data, and any documented disputes or penalties associated with previous telecommunications contracts would provide crucial context for assessing their suitability and risk profile for this specific award. A review of their contract history would likely show a pattern of significant involvement in providing critical infrastructure services to the federal government.

How does the per-unit cost of this VPN access compare to other federal contracts or commercial market rates?

The provided data does not include specific per-unit cost details (e.g., cost per VPN connection, cost per Mbps of bandwidth) necessary for a direct comparison. To assess value for money, these unit costs would need to be benchmarked against similar contracts awarded by other federal agencies or against prevailing commercial market rates for comparable VPN and transport services. Factors such as service level agreements (SLAs), bandwidth guarantees, security features, and geographic coverage significantly influence pricing. Without this granular data, it is difficult to definitively state whether the pricing is competitive or represents a good value for the taxpayer. The fixed-price with economic price adjustment (FPEPA) structure also complicates direct comparisons, as actual costs can fluctuate.

What are the primary risks associated with the long contract duration and economic price adjustment clause?

The contract's duration of 2556 days (approximately 7 years) presents several risks. Firstly, it locks the government into a specific technology and provider for an extended period, potentially hindering its ability to adopt newer, more efficient, or cost-effective solutions that may emerge during the contract term. Secondly, the economic price adjustment (EPA) clause introduces uncertainty regarding future costs. While intended to account for inflation and market fluctuations, EPAs can lead to significant price increases over time, especially in volatile economic conditions, potentially exceeding initial budget projections. This could result in the government paying more than anticipated, diminishing the overall value for money. Furthermore, long-term contracts can sometimes lead to complacency in service delivery if not rigorously overseen.

What is the expected impact of this contract on the Defense Information Systems Agency's (DISA) overall network infrastructure and security posture?

This contract is integral to DISA's mission of providing secure and reliable IT services to the Department of Defense. By securing VPN access and transport services, DISA enhances the ability of DoD personnel to connect securely to agency networks from various locations, which is critical for operational readiness and remote work capabilities. The contract supports the underlying infrastructure that enables secure data transmission and communication, thereby bolstering the DoD's overall cybersecurity posture. The reliability and performance of AT&T's services directly influence the availability and integrity of these critical communications, impacting everything from daily operations to national security missions. Ensuring robust performance and security under this contract is paramount for DISA's strategic objectives.

How does this contract's value compare to historical spending on similar VPN and transport services by the DoD?

The total award value of approximately $15 million for this VPN access and transport service contract needs to be viewed in the context of historical spending. The DoD is a massive organization with extensive global communication needs, and spending on telecommunications infrastructure can run into billions of dollars annually. This specific contract represents a portion of that larger spending. To assess its historical context, one would need to compare its value against previous contracts for similar services awarded by DISA or other DoD components, considering factors like the number of users supported, the scope of services, and the duration. If similar services were previously procured at a lower total cost or for a larger scope, it might indicate a trend of increasing costs or a less favorable deal. Conversely, if the value is consistent with or lower than historical benchmarks, it suggests stable or improved cost management.

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

Offers Received: 3

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: Tyto Athene, LLC

Address: 4807 STONECROFT BLVD, CHANTILLY, VA, 20151

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $110,348,102

Exercised Options: $33,174,907

Current Obligation: $14,973,968

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q17NSD3000

IDV Type: IDC

Timeline