DoD awards $7.46M for VPNs and transport services to Lumen Technologies, spanning 6 years

Contract Overview

Contract Amount: $7,463,984 ($7.5M)

Contractor: Lumen Technologies Government Solutions, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-06-08

End Date: 2026-06-08

Contract Duration: 2,191 days

Daily Burn Rate: $3.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: IT

Official Description: VPNS ACCESS AND TRANSPORT SERVICES

Place of Performance

Location: FORT BELVOIR, FAIRFAX County, VIRGINIA, 22060

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $7.5 million to LUMEN TECHNOLOGIES GOVERNMENT SOLUTIONS, INC. for work described as: VPNS ACCESS AND TRANSPORT SERVICES Key points: 1. Contract value appears reasonable given the 6-year duration and essential nature of VPN services. 2. Full and open competition suggests a competitive bidding process, potentially leading to better pricing. 3. Fixed Price with Economic Price Adjustment contract type introduces some risk of cost escalation. 4. The contract supports critical IT infrastructure for the Department of Defense. 5. This award falls within the Wired Telecommunications Carriers industry, a mature sector. 6. The 5-year base period with potential for extensions indicates a long-term need for these services.

Value Assessment

Rating: good

The contract value of $7.46 million over six years for VPN access and transport services is within a reasonable range for government telecommunications contracts of this scope. Benchmarking against similar large-scale network service contracts for federal agencies suggests that the pricing is competitive, especially considering the fixed-price nature with economic price adjustments. The value proposition is further supported by the long-term commitment, which can often secure more favorable rates than short-term, ad-hoc arrangements. The services provided are essential for secure communication within the Department of Defense.

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 bids. The presence of 5 bids suggests a healthy level of competition for this requirement. This broad competition is generally favorable for price discovery and ensures that the government receives offers from a diverse range of qualified vendors, potentially leading to more cost-effective solutions.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that drives down costs and ensures the government is obtaining services at a fair market price. The multiple bids received suggest that taxpayer funds are being used efficiently.

Public Impact

Provides secure VPN access and transport services essential for the Department of Defense's operations. Supports the communication needs of military personnel and civilian employees across various locations. Ensures the integrity and confidentiality of sensitive government data. Contributes to the operational readiness and cybersecurity posture of the DoD. The services are critical for maintaining secure remote access and network connectivity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clause introduces potential for cost increases over the contract term.
Reliance on a single vendor for critical VPN and transport services could pose a risk if performance issues arise.
The long duration of the contract may require ongoing monitoring to ensure continued value and alignment with evolving technological needs.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
The contract duration of up to 6 years suggests a stable and predictable service provision.
The fixed-price structure, even with adjustments, provides a baseline for cost control.
The vendor, Lumen Technologies, is an established provider of telecommunications services.

Sector Analysis

This contract falls within the Wired Telecommunications Carriers sector, which includes companies that provide telecommunications services over wired networks. The market is characterized by significant infrastructure investment and a mix of large established players and specialized providers. Federal government spending in this sector is substantial, driven by the need for secure, reliable, and high-bandwidth communication services for various agencies. Comparable spending benchmarks for large-scale network services often run into millions of dollars annually, making this $7.46 million award over six years a moderate-sized contract within the federal IT and telecommunications landscape.

Small Business Impact

This contract was awarded under full and open competition and does not appear to have specific small business set-aside provisions. However, the prime contractor, Lumen Technologies, may engage small businesses for subcontracting opportunities to fulfill aspects of the contract. The impact on the small business ecosystem would depend on the extent to which Lumen utilizes small business partners for specialized services or support functions related to VPN access and transport.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officer and the relevant program managers within the Defense Information Systems Agency (DISA) and the Department of Defense. Accountability measures are typically embedded in the contract's performance work statement, including service level agreements (SLAs) and reporting requirements. Transparency is facilitated through contract award databases and public reporting mechanisms, though specific performance metrics may be considered sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

DoD Enterprise Software Agreements
General Services Administration (GSA) Schedule IT
Defense Information Technology Contracting Office (DITCO) contracts
Network Infrastructure Services
Secure Communications Contracts

Risk Flags

Potential for cost escalation due to Economic Price Adjustment clause.
Long-term reliance on a single vendor for critical infrastructure.
Need for continuous monitoring of service levels and technological relevance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $7.5 million to LUMEN TECHNOLOGIES GOVERNMENT SOLUTIONS, INC.. VPNS ACCESS AND TRANSPORT SERVICES

Who is the contractor on this award?

The obligated recipient is LUMEN TECHNOLOGIES GOVERNMENT SOLUTIONS, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $7.5 million.

What is the period of performance?

Start: 2020-06-08. End: 2026-06-08.

What is the track record of Lumen Technologies Government Solutions, Inc. in delivering similar VPN and transport services to federal agencies?

Lumen Technologies Government Solutions, Inc., formerly CenturyLink, has a significant history of providing telecommunications and network services to the federal government. They hold numerous contracts across various agencies, including the Department of Defense, for services such as VPN access, dedicated internet access, and managed network services. Their experience includes supporting large-scale, mission-critical operations that require high levels of security and reliability. Past performance reviews and contract vehicles like the GSA's Enterprise Infrastructure Solutions (EIS) program provide evidence of their capabilities. However, as with any large contractor, specific performance on individual contracts can vary, and a detailed review of past performance metrics for similar VPN services would be necessary for a comprehensive assessment.

How does the $7.46 million contract value compare to similar VPN and transport service contracts awarded by the DoD or other federal agencies?

The $7.46 million contract value, spread over a potential six-year period (2020-2026), equates to approximately $1.24 million per year. This figure is considered moderate for large-scale federal telecommunications and VPN services. For instance, major network modernization programs or enterprise-wide VPN solutions for agencies like the FBI or DHS can range from tens to hundreds of millions of dollars over similar or longer durations. Contracts for specific regional or specialized VPN needs might be smaller. Given that this contract is for VPN access and transport services, and was awarded under full and open competition with multiple bids, the annual cost appears to be in a competitive range, reflecting the market rates for such essential IT infrastructure services.

What are the primary risks associated with a Fixed Price with Economic Price Adjustment (FPEPA) contract for telecommunications services?

The primary risk with a Fixed Price with Economic Price Adjustment (FPEPA) contract for telecommunications services lies in potential cost escalation. While the base price is fixed, the economic price adjustment clause allows for increases based on specified economic factors, such as inflation indices or changes in labor or material costs. This can lead to the total contract cost exceeding initial projections, impacting the government's budget. For the contractor, the risk is mitigated as they can pass on certain cost increases. For the government, the risk is that the final cost may be higher than anticipated, potentially reducing the overall value for money if not carefully managed and monitored against market trends.

What is the expected effectiveness of these VPN and transport services in supporting the Department of Defense's mission-critical operations?

The effectiveness of these VPN and transport services is expected to be high, given their critical role in enabling secure communication for the Department of Defense (DoD). VPNs are fundamental for establishing secure, encrypted tunnels over public or untrusted networks, allowing authorized users to access sensitive DoD resources remotely and ensuring data confidentiality and integrity. Reliable transport services provide the necessary bandwidth and low latency for these connections. The long-term nature of the contract and the award to an established provider suggest a commitment to sustained operational effectiveness. The success hinges on meeting defined Service Level Agreements (SLAs) for uptime, performance, and security, which are standard components of such government contracts.

How has federal spending on VPN access and transport services evolved over the past five years, and how does this contract fit into that trend?

Federal spending on VPN access and transport services has generally trended upwards over the past five years, driven by increasing digitalization, the rise of remote work (accelerated by the COVID-19 pandemic), and the continuous need for enhanced cybersecurity. Agencies are increasingly reliant on secure network infrastructure to protect sensitive data and maintain operational continuity. This $7.46 million contract for the DoD fits within this trend as a necessary investment in secure communication infrastructure. While specific aggregate spending data for 'VPN access and transport services' can be fragmented across various contract types and categories (e.g., telecommunications, IT services, cybersecurity), the overall demand for such services remains robust, reflecting a consistent and growing government requirement.

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: 5

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

Evaluated Preference: NONE

Contractor Details

Address: 931 14TH STE 1000 B, DENVER, CO, 80202

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

Financial Breakdown

Contract Ceiling: $85,633,719

Exercised Options: $9,981,067

Current Obligation: $7,463,984

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q17NSD3006

IDV Type: IDC

Timeline