DoD's $219M MCI Task Order to AT&T for Wired Telecom Services awarded under full and open competition

Contract Overview

Contract Amount: $21,908,688 ($21.9M)

Contractor: AT&T Enterprises, LLC

Awarding Agency: Department of Defense

Start Date: 2020-09-15

End Date: 2026-08-31

Contract Duration: 2,176 days

Daily Burn Rate: $10.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: IT

Official Description: EIS MARINE CORPS INTRANET (MCI) TASK ORDER

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20350

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $21.9 million to AT&T ENTERPRISES, LLC for work described as: EIS MARINE CORPS INTRANET (MCI) TASK ORDER Key points: 1. Value for money assessed through fixed-price contract with economic price adjustment. 2. Full and open competition suggests a competitive bidding process. 3. Risk indicators include contract duration and potential for economic fluctuations. 4. Performance context is the delivery of wired telecommunications services for the Marine Corps. 5. Sector positioning within Defense Information Systems Agency's IT procurement landscape. 6. Contract awarded to AT&T Enterprises, LLC, a major telecommunications provider.

Value Assessment

Rating: good

The contract's fixed-price structure with economic price adjustment aims to balance cost certainty with protection against market volatility. Benchmarking against similar large-scale telecommunications infrastructure contracts is necessary for a definitive value assessment. The total award value of approximately $219 million over its period of performance suggests a significant investment, and its alignment with market rates for comparable services will be a key indicator of value.

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 bids. The presence of 4 bids suggests a healthy level of competition for this significant telecommunications requirement. A competitive process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are likely being used efficiently by fostering a competitive environment that drives down costs.

Public Impact

The Marine Corps is the primary beneficiary, receiving essential wired telecommunications infrastructure. Services delivered include the maintenance and operation of the Marine Corps Intranet (MCI). Geographic impact is concentrated in the District of Columbia, where the contract is managed. Workforce implications may involve AT&T personnel managing and maintaining the network infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (2020-2026) increases exposure to economic price adjustments and potential technological obsolescence.
Fixed-price with economic price adjustment can lead to cost overruns if not carefully managed.
Reliance on a single large provider for critical infrastructure could pose a risk if service levels degrade.

Positive Signals

Awarded under full and open competition, suggesting competitive pricing.
AT&T is a well-established telecommunications provider with extensive experience.
The contract aims to ensure reliable wired telecommunications for a critical defense agency.

Sector Analysis

This contract falls within the telecommunications services sector, specifically wired telecommunications carriers. The IT and defense sectors heavily rely on robust and secure communication networks. Spending in this area is critical for maintaining operational readiness and supporting mission-critical functions. Comparable spending benchmarks would involve analyzing other large-scale government contracts for similar network infrastructure and maintenance services.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large telecommunications contract awarded to a major provider, it is unlikely to have significant direct subcontracting opportunities for small businesses unless specified within the contract's performance requirements. The focus is on a prime contractor's capabilities rather than fostering small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Information Systems Agency (DISA) and the contracting officers within the Department of Defense. Accountability measures are embedded in the fixed-price with economic price adjustment structure and performance delivery requirements. Transparency is facilitated by the contract being awarded under full and open competition, with details available through federal procurement databases.

Related Government Programs

Marine Corps Intranet (MCI)
Defense Information Systems Agency (DISA) Contracts
Wired Telecommunications Services Procurement
Department of Defense IT Infrastructure

Risk Flags

Long-term contract duration increases risk of technological obsolescence.
Economic Price Adjustment clause may lead to cost increases.
Potential for vendor lock-in due to integrated services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.9 million to AT&T ENTERPRISES, LLC. EIS MARINE CORPS INTRANET (MCI) TASK ORDER

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 $21.9 million.

What is the period of performance?

Start: 2020-09-15. End: 2026-08-31.

What is AT&T Enterprises, LLC's track record with similar large-scale telecommunications contracts for the Department of Defense?

AT&T Enterprises, LLC, as a major telecommunications provider, has a long history of supporting government agencies, including the Department of Defense, with various network and communication services. Their track record typically involves managing complex infrastructure, ensuring network uptime, and providing secure communication channels. Specific to large-scale intranet or network modernization projects, AT&T has been involved in numerous contracts, often competing against other major telecommunications and IT service providers. Analyzing their past performance on similar contracts, such as those involving large-scale network upgrades or managed services for other branches of the military or federal agencies, would provide context on their ability to deliver on the MCI Task Order. This includes evaluating their history of meeting performance metrics, managing budgets, and adhering to security protocols.

How does the pricing structure (Fixed Price with Economic Price Adjustment) compare to industry standards for similar telecommunications services?

The Fixed Price with Economic Price Adjustment (FP-EPA) pricing structure is common for long-term contracts involving services or goods susceptible to significant market fluctuations, such as labor costs, fuel, or raw materials. For wired telecommunications services, this structure allows the government to secure a base price while providing the contractor with some protection against unforeseen economic changes over the contract's extended duration (2020-2026). Industry standards often see a mix of fixed-price, cost-plus, and time-and-materials contracts depending on the nature of the service and the predictability of costs. FP-EPA is generally viewed as a reasonable compromise when cost certainty is desired but market volatility is a significant concern. The effectiveness of this structure hinges on the clarity and fairness of the economic adjustment clauses and rigorous oversight to prevent unwarranted price increases.

What are the primary risks associated with a contract of this duration and scope for wired telecommunications?

A contract spanning over six years for critical wired telecommunications infrastructure carries several primary risks. Technological obsolescence is a significant concern; telecommunications technology evolves rapidly, and a six-year-old infrastructure plan might not align with future needs or standards by its end date. Economic price adjustments, while intended to protect against inflation, can lead to higher-than-anticipated costs if not carefully managed and monitored, potentially exceeding initial budget projections. Vendor lock-in is another risk; the extensive integration of AT&T's services into the Marine Corps Intranet could make switching providers difficult and costly in the future. Furthermore, reliance on a single provider for such a critical function increases vulnerability to service disruptions, security breaches, or performance degradation if the contractor fails to meet obligations.

How effective is the 'full and open competition' approach in ensuring cost savings for this specific type of telecommunications contract?

The 'full and open competition' approach is generally considered the most effective method for ensuring cost savings in federal contracting, including for telecommunications services. By allowing all responsible sources to bid, it maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive pricing. For a contract of this magnitude ($219 million), the presence of multiple bidders (4 in this case) suggests that the market is sufficiently robust to support competition. This competitive pressure incentivizes bidders to offer their best pricing and most innovative solutions to win the contract. While the economic price adjustment clause introduces some variability, the initial competitive bidding process sets a strong baseline for cost efficiency, ensuring that the government secures services at a price driven by market forces rather than sole-source negotiations.

What are the historical spending patterns for the Marine Corps Intranet (MCI) or similar telecommunications services within the Department of Defense?

Historical spending on the Marine Corps Intranet (MCI) and similar large-scale telecommunications services within the Department of Defense (DoD) has consistently represented a significant portion of IT budgets. These contracts are typically long-term, multi-year agreements due to the extensive infrastructure development and ongoing maintenance required. Spending often involves substantial upfront investment in network hardware, software, and installation, followed by recurring costs for maintenance, support, bandwidth, and upgrades. Over the years, the DoD has shifted towards more consolidated and modernized network architectures, often through large task orders or prime contracts awarded to major telecommunications and IT service providers. Analyzing past spending on MCI or comparable programs like the Army's Enterprise Email or Air Force's Network-Centric Enterprise Services would reveal trends in contract values, duration, and the types of services procured, providing a benchmark for the current AT&T contract.

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: 4

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: $54,490,343

Exercised Options: $20,940,150

Current Obligation: $21,908,688

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