DoD's $63.4M AT&T contract for aircraft communications network awarded without competition

Contract Overview

Contract Amount: $63,421,161 ($63.4M)

Contractor: AT&T Enterprises, LLC

Awarding Agency: Department of Defense

Start Date: 2021-06-30

End Date: 2026-06-30

Contract Duration: 1,826 days

Daily Burn Rate: $34.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: NORTHSTAR EXECUTIVE AIRCRAFT COMMUNICATION NETWORK.

Place of Performance

Location: WALDORF, CHARLES County, MARYLAND, 20601

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $63.4 million to AT&T ENTERPRISES, LLC for work described as: NORTHSTAR EXECUTIVE AIRCRAFT COMMUNICATION NETWORK. Key points: 1. The contract's value of $63.4 million over its period of performance raises questions about potential cost efficiencies. 2. Awarded as a sole-source contract, the lack of competition limits price discovery and potentially increases costs for taxpayers. 3. The contract's duration of 1826 days suggests a long-term need for these services, but the absence of competition is a risk indicator. 4. The firm-fixed-price structure offers some cost certainty, but the overall value proposition is weakened by the non-competitive award. 5. This contract supports critical defense communication infrastructure, highlighting its strategic importance. 6. The reliance on a single vendor for such a significant network could pose supply chain risks.

Value Assessment

Rating: questionable

Benchmarking the value of this $63.4 million contract is challenging without competitive bids. The firm-fixed-price structure provides some cost control, but the lack of competition means there's no market-driven validation of AT&T's pricing. Compared to similar sole-source awards for specialized telecommunications, the price might be within a reasonable range, but the absence of competitive pressure prevents a definitive assessment of value for money. The total value over the 5-year period suggests a significant investment in maintaining and operating the network.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning AT&T Enterprises, LLC was the only vendor considered. The rationale for this approach is not detailed in the provided data, but it typically implies that only one source possesses the necessary capabilities, security clearances, or existing infrastructure to fulfill the requirement. The lack of competition means that taxpayers did not benefit from a bidding process that could have driven down prices through market forces.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible pricing. Without competing offers, there is a reduced incentive for the awarded contractor to offer the most competitive rates, potentially leading to higher costs for taxpayers.

Public Impact

The primary beneficiaries are the Department of Defense, specifically units relying on the NORTHSTAR executive aircraft communication network. The contract delivers essential wired telecommunications services for secure and reliable communication. The geographic impact is likely focused on locations where executive aircraft operate and require secure communication links. Workforce implications may include the need for specialized technicians and support staff to maintain and operate the network.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced value for taxpayer funds.
Sole-source awards can create vendor lock-in, making it difficult to switch providers or negotiate better terms in the future.
Reliance on a single provider for critical communication infrastructure could pose a security risk if vulnerabilities are exploited.
The long contract duration without competitive re-evaluation could lead to complacency and a decline in service quality over time.

Positive Signals

The firm-fixed-price contract type provides cost certainty for the government, mitigating the risk of cost overruns.
AT&T is a well-established telecommunications provider with a proven track record, suggesting a high likelihood of reliable service delivery.
The contract supports a critical national security function, ensuring vital communication capabilities for executive aircraft.
The specified contract end date allows for future re-evaluation of requirements and potential competitive re-sourcing.

Sector Analysis

The Wired Telecommunications Carriers industry (NAICS 517311) is a mature sector characterized by significant infrastructure investment and consolidation. Major players like AT&T dominate the market, offering a wide range of services from broadband to specialized enterprise solutions. Federal spending in this sector often supports critical infrastructure, national security, and essential government operations. This contract fits within the broader landscape of federal telecommunications procurement, where specialized, secure networks are frequently required for defense and executive functions. Benchmarks for similar large-scale, long-term telecommunications contracts are often in the tens to hundreds of millions of dollars, depending on scope and duration.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit information regarding subcontracting plans for small businesses. The sole-source nature of the award further suggests that opportunities for small businesses to participate as prime contractors or through set-aside subcontracts may be limited in this specific procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Information Systems Agency (DISA) and the Department of Defense's contracting and financial management offices. Accountability measures are inherent in the firm-fixed-price contract type, which obligates AT&T to deliver specified services at an agreed-upon price. Transparency is limited due to the sole-source award, but contract modifications, performance reports, and payment data are usually subject to internal review and potentially public disclosure under FOIA, albeit with redactions. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Information Systems Network (DISN)
Executive Airlift Communications
Secure Government Telecommunications
Wired Network Infrastructure Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Long-term contract duration without re-competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $63.4 million to AT&T ENTERPRISES, LLC. NORTHSTAR EXECUTIVE AIRCRAFT COMMUNICATION NETWORK.

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 $63.4 million.

What is the period of performance?

Start: 2021-06-30. End: 2026-06-30.

What is the specific justification for awarding this contract on a sole-source basis to AT&T Enterprises, LLC?

The provided data indicates the contract was 'NOT COMPETED' and awarded as a 'SOLE SOURCE'. While the specific justification is not detailed, common reasons for sole-source awards in telecommunications include the unique capabilities of the incumbent provider, the need to maintain interoperability with existing proprietary systems, the existence of unique security requirements that only one vendor can meet, or the critical nature of the service where disruption from a new vendor is unacceptable. For a network like NORTHSTAR, AT&T may possess proprietary technology, existing infrastructure integration, or specific security certifications essential for executive aircraft communications that cannot be easily replicated or replaced by competitors within the required timeframe and without significant risk or cost.

How does the $63.4 million contract value compare to similar federal spending on executive aircraft communication networks?

Direct comparisons for 'NORTHSTAR executive aircraft communication network' are difficult without more specific details on the network's scope, technology, and service level agreements. However, federal spending on secure, high-availability telecommunications for critical government functions, especially defense and executive support, can range from tens to hundreds of millions of dollars over several years. Contracts for similar specialized networks supporting mobile platforms or high-security environments often involve significant costs due to the need for robust infrastructure, advanced encryption, redundancy, and 24/7 support. The $63.4 million over five years ($12.68 million annually) for a sole-source award suggests a substantial but potentially justifiable investment if the network's capabilities are unique and essential for national security and executive operations.

What are the potential risks associated with a sole-source award for a critical communication network?

Sole-source awards carry several inherent risks. Firstly, the lack of competition can lead to higher prices than might be achieved through a competitive bidding process, representing a potential loss of value for taxpayer money. Secondly, it can foster vendor lock-in, making it difficult and costly to switch providers in the future, even if better alternatives emerge. Thirdly, without the pressure of competition, the incumbent contractor may have less incentive to innovate or maintain the highest levels of service quality and responsiveness. Finally, a sole-source reliance on a single vendor for a critical system like executive aircraft communications can create a single point of failure or vulnerability if that vendor experiences operational issues, security breaches, or financial instability.

What is AT&T Enterprises, LLC's track record with similar federal telecommunications contracts?

AT&T Enterprises, LLC is a major telecommunications provider with extensive experience serving the federal government across various agencies, including the Department of Defense. They have a long history of managing large-scale telecommunications infrastructure, secure networks, and specialized communication services. Their track record typically includes contracts for network modernization, secure voice and data transmission, and support for critical government operations. While specific performance details for the NORTHSTAR contract are not provided, AT&T's general history suggests a capacity to deliver complex telecommunications solutions, though the effectiveness and value of any specific contract depend on its unique terms, scope, and oversight.

What are the historical spending patterns for executive aircraft communication networks within the Department of Defense?

Historical spending patterns for executive aircraft communication networks within the DoD are often characterized by long-term, sole-source or limited-competition contracts due to the specialized and security-sensitive nature of the requirements. These networks are critical for national security and continuity of government operations, necessitating high reliability, robust security, and seamless integration with existing command and control systems. Spending typically covers network infrastructure, maintenance, upgrades, and operational support. While specific figures fluctuate based on technological advancements and evolving threats, the DoD consistently allocates significant resources to ensure secure and reliable communications for its executive fleet, often involving multi-year commitments in the tens to hundreds of millions of dollars.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - NETWORK

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HC101320R0015

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Tyto Athene, LLC

Address: 7125 COLUMBIA GATEWAY DR, COLUMBIA, MD, 21046

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: $63,704,826

Exercised Options: $63,421,161

Current Obligation: $63,421,161

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline