DoD awards $23.7M for wired telecom services to Lumen Technologies, raising questions on competition and value

Contract Overview

Contract Amount: $23,740,825 ($23.7M)

Contractor: Lumen Technologies Government Solutions, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-09-15

End Date: 2026-01-31

Contract Duration: 1,964 days

Daily Burn Rate: $12.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: CIENA GEAR/MAINTENANCE

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92145

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $23.7 million to LUMEN TECHNOLOGIES GOVERNMENT SOLUTIONS, INC. for work described as: CIENA GEAR/MAINTENANCE Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Significant duration of the contract (over 5 years) warrants close monitoring of performance and evolving needs. 3. Lack of competition suggests potential for higher pricing compared to a more open market. 4. The contract falls within the Wired Telecommunications Carriers sector, a critical but often consolidated industry. 5. Performance context is limited due to the 'NOT COMPETED' award type, making direct benchmarking difficult. 6. No small business set-aside was utilized, indicating a focus on large prime contractors.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the lack of publicly available comparable sole-source awards for similar services. The firm fixed-price structure provides some cost certainty, but without competitive bids, it's difficult to ascertain if the $23.7 million represents a fair market price. The duration of the contract, spanning over five years, also introduces risk if technology or service needs change significantly, potentially leading to overpayment for outdated or unnecessary services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using the 'NOT COMPETED' method, indicating that a full and open competition was not conducted. This typically occurs when only one source is capable of meeting the requirement, or for other specific justifications outlined in federal acquisition regulations. The absence of multiple bidders means there was no direct price competition, which can lead to higher costs for the government compared to contracts awarded under competitive procedures. The limited competition raises concerns about the government's ability to secure the best possible pricing and terms.

Taxpayer Impact: Taxpayers may be paying a premium for these telecommunications services due to the lack of competitive bidding. Without a competitive process, there is less pressure on the contractor to offer the lowest possible price, potentially resulting in inefficient use of federal funds.

Public Impact

The Department of Defense is the primary beneficiary, receiving essential wired telecommunications services. These services are crucial for maintaining communication infrastructure supporting military operations and personnel. The contract's geographic impact is primarily within California, where the services are likely deployed. The contract supports the workforce of Lumen Technologies Government Solutions, Inc., maintaining jobs in the telecommunications sector.

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 (over 5 years) increases risk of obsolescence or overpayment if needs change.
Lack of transparency in the justification for 'NOT COMPETED' award makes independent value assessment difficult.
Absence of small business participation could limit opportunities for smaller, specialized providers.

Positive Signals

Firm fixed-price contract provides cost certainty for the awarded scope of work.
Contract is awarded to an established provider with existing infrastructure, potentially ensuring service continuity.
Services are essential for critical defense communications infrastructure.

Sector Analysis

The Wired Telecommunications Carriers industry (NAICS 517311) is characterized by significant infrastructure investment and consolidation. Major players often provide essential services to government entities. Federal spending in this sector supports critical communication networks. While specific benchmarks for sole-source telecom contracts are scarce, the overall market is competitive among large providers, but government procurement can sometimes bypass this due to specific requirements or justifications.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor, Lumen Technologies, is a large telecommunications provider. This suggests that subcontracting opportunities for small businesses may be limited unless proactively pursued by the prime contractor. The absence of a set-aside means that the primary focus was not on engaging the small business industrial base for this specific requirement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense and the Defense Information Systems Agency (DISA). As a sole-source award, the justification for 'NOT COMPETED' would be subject to review under federal acquisition regulations. Transparency is limited due to the non-competitive nature, but contract performance would be monitored through standard government oversight mechanisms. The Inspector General's office could investigate if any improprieties are suspected.

Related Government Programs

Defense Information Systems Agency (DISA) Contracts
Wired Telecommunications Services
Department of Defense IT and Communications Spending
Sole-Source Telecommunications Awards

Risk Flags

Sole-source award raises concerns about fair pricing and competition.
Long contract duration increases risk of technological obsolescence.
Lack of transparency in the 'NOT COMPETED' justification.
Potential for higher costs due to absence of competitive bidding.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.7 million to LUMEN TECHNOLOGIES GOVERNMENT SOLUTIONS, INC.. CIENA GEAR/MAINTENANCE

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 $23.7 million.

What is the period of performance?

Start: 2020-09-15. End: 2026-01-31.

What is the specific justification provided by the Department of Defense for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED' (ct: NOT COMPETED). Federal Acquisition Regulation (FAR) Part 6 outlines exceptions to full and open competition, such as when only one responsible source is available or when the agency's needs can only be met by a specific source. For a sole-source award of this magnitude, a detailed justification and approval (J&A) document would typically be required, outlining the specific circumstances necessitating the non-competitive procurement. This document, if publicly available, would detail why other potential sources were excluded and why Lumen Technologies was the only viable option. Without access to this J&A, the precise rationale remains unconfirmed, but common reasons include unique technical capabilities, proprietary technology, or urgent and compelling needs where competition would cause unacceptable delays.

How does the $23.7 million contract value compare to similar wired telecommunications services procured by the DoD or other federal agencies?

Directly comparing this $23.7 million contract value is challenging without knowing the specific scope of services, service level agreements, and geographic coverage. However, federal agencies frequently procure wired telecommunications services, including broadband, dedicated circuits, and voice services. Larger, multi-year contracts for enterprise-wide telecommunications solutions can easily reach tens or hundreds of millions of dollars. For instance, other agencies have awarded significant contracts for similar services, sometimes competitively, sometimes through other contract vehicles. The key differentiator here is the sole-source nature. If this contract were competed, the price per unit (e.g., per Mbps of bandwidth, per circuit) might be expected to fall within a certain range based on market rates. As a sole-source award, the government lacks the competitive benchmark to definitively state if $23.7 million is high or low relative to market alternatives, though it is a substantial investment.

What are the primary risks associated with a sole-source contract of this duration (over 5 years)?

The primary risks associated with a sole-source contract of this duration, like the $23.7 million award to Lumen Technologies, are threefold. Firstly, the lack of competition inherently reduces the government's leverage to negotiate the best possible price, potentially leading to higher costs than if the contract had been competed. Secondly, the extended period of performance (nearly six years) increases the risk of technological obsolescence. Telecommunications technology evolves rapidly, and services procured today might be outdated or less efficient by 2026. The government could be locked into paying for services that are no longer state-of-the-art. Thirdly, there's a risk of vendor lock-in and reduced flexibility. If the government's needs change or a better technological solution emerges, switching providers under a long-term, sole-source agreement can be difficult and costly, potentially requiring contract modifications or termination penalties.

What performance metrics or oversight mechanisms are likely in place to ensure the effectiveness of these wired telecommunications services?

While the provided data doesn't detail specific performance metrics, federal contracts for telecommunications services typically include Service Level Agreements (SLAs) that define expected performance standards. These SLAs often cover aspects like network availability (uptime), latency, bandwidth guarantees, and response times for outages or issues. Oversight would likely be managed by contracting officers and technical points of contact within the Defense Information Systems Agency (DISA). They would monitor the contractor's adherence to the SLAs, review performance reports, and manage any contract modifications or disputes. Regular performance reviews and potentially periodic re-validations of the sole-source justification might also occur, especially given the contract's length. The effectiveness is ultimately measured by the reliability and quality of the communication services delivered to support DoD operations.

How does this contract fit into the broader landscape of federal spending on telecommunications infrastructure?

This $23.7 million contract represents a specific instance of federal spending within the broader telecommunications infrastructure sector. Federal agencies collectively spend billions annually on a wide array of telecommunications services, including broadband internet, secure voice networks, satellite communications, and specialized data circuits. This contract with Lumen Technologies focuses on wired telecommunications, likely supporting fixed infrastructure needs for the Department of Defense. It fits within the context of agencies ensuring robust and secure communication capabilities, which are critical for national security and operational effectiveness. While this specific award is sole-source, the overall federal telecommunications market involves numerous contracts, both competitive and non-competitive, awarded to various providers to meet diverse agency requirements across different geographic locations and technological needs.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications Carriers › Wired Telecommunications Carriers

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HC101318R0013

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2900 TOWERVIEW RD STE 150, HERNDON, VA, 20171

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

Financial Breakdown

Contract Ceiling: $23,740,825

Exercised Options: $23,740,825

Current Obligation: $23,740,825

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $267,584

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC101319D0002

IDV Type: IDC

Timeline