DoD's $58M VPN Contract with AT&T Raises Questions on Value and Competition
Contract Overview
Contract Amount: $58,262,119 ($58.3M)
Contractor: AT&T Enterprises, LLC
Awarding Agency: Department of Defense
Start Date: 2021-08-26
End Date: 2026-08-25
Contract Duration: 1,825 days
Daily Burn Rate: $31.9K/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 DEDICATED ACCESS ARRANGEMENT
Place of Performance
Location: ALEXANDRIA, LOUDOUN County, DISTRICT OF COLUMBIA, 20598
Plain-Language Summary
Department of Defense obligated $58.3 million to AT&T ENTERPRISES, LLC for work described as: VPNS DEDICATED ACCESS ARRANGEMENT Key points: 1. Significant spending on VPN services highlights reliance on secure remote access. 2. AT&T's role as a major telecommunications provider suggests potential for competitive pricing. 3. The fixed-price contract with economic adjustment introduces risk of cost escalation. 4. Spending in the Wired Telecommunications Carriers sector is substantial across government.
Value Assessment
Rating: fair
The contract value of $58.3 million over five years for VPN services appears moderate given the scope. Benchmarking against similar government VPN contracts is necessary to determine if the pricing is competitive, especially considering the fixed-price with economic adjustment structure.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is positive for price discovery. However, the specific details of the bidding process and the number of bidders are not provided, making it difficult to fully assess the competitive pressure on pricing.
Taxpayer Impact: The use of full and open competition aims to secure the best value for taxpayers. However, the economic price adjustment clause could potentially increase costs beyond initial projections.
Public Impact
Ensures secure remote access for Department of Defense personnel, crucial for operations. Supports critical communication infrastructure for national security. Potential for cost overruns due to economic price adjustments could impact taxpayer funds. The long-term nature of the contract may limit flexibility in adopting newer technologies.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment clause could lead to cost increases.
- Lack of specific bidder information hinders full competition assessment.
- Contract duration may not align with rapid technological advancements in VPNs.
Positive Signals
- Awarded under full and open competition.
- Provides essential secure communication services.
- AT&T is a well-established provider.
Sector Analysis
Spending on wired telecommunications, including VPN services, is a significant component of government IT infrastructure. Benchmarks for similar contracts are essential to evaluate if this $58.3 million award represents a fair market price for the services rendered over its five-year term.
Small Business Impact
The contract was awarded to AT&T Enterprises, LLC, a large business. There is no indication of small business participation in this specific contract, which is a missed opportunity for promoting small business engagement in federal contracting.
Oversight & Accountability
The Defense Information Systems Agency (DISA) is responsible for this contract. Oversight should focus on monitoring the economic price adjustments and ensuring the VPN services continue to meet evolving security and performance requirements throughout the contract period.
Related Government Programs
- Wired Telecommunications Carriers
- Department of Defense Contracting
- Defense Information Systems Agency Programs
Risk Flags
- Potential for cost overruns due to economic price adjustment.
- Lack of transparency on specific competition details.
- Risk of technological obsolescence over the contract term.
- Limited visibility into small business participation.
Tags
wired-telecommunications-carriers, department-of-defense, dc, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $58.3 million to AT&T ENTERPRISES, LLC. VPNS DEDICATED ACCESS ARRANGEMENT
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 $58.3 million.
What is the period of performance?
Start: 2021-08-26. End: 2026-08-25.
What is the specific impact of the economic price adjustment on the total contract cost over its five-year duration?
The economic price adjustment (EPA) clause allows for modifications to the contract price based on fluctuations in economic factors, such as inflation or changes in labor and material costs. Without specific indices or caps defined in the contract, the total impact on the $58.3 million base value is uncertain. A thorough review of the EPA's terms and historical application would be needed to quantify potential cost increases and assess if they are justified by market conditions.
How does the per-unit cost of these VPN services compare to industry benchmarks for similar government and commercial contracts?
Benchmarking the per-unit cost is crucial for assessing value. Given the $58.3 million total value over five years, the average annual cost is approximately $11.66 million. Detailed analysis of the service levels, bandwidth, security features, and user count associated with this contract is required to compare it against publicly available data or government-wide contract vehicles for VPN and dedicated access services.
What measures are in place to ensure the VPN technology remains current and effective against evolving cyber threats throughout the contract's lifespan?
The contract's effectiveness hinges on its ability to adapt to evolving cyber threats. Oversight should verify that AT&T is contractually obligated to provide regular technology refreshes or updates to the VPN infrastructure. Mechanisms for performance monitoring and security audits are essential to ensure the services remain robust and compliant with the Department of Defense's stringent security requirements over the five-year term.
Industry Classification
NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - NETWORK
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: $308,523,100
Exercised Options: $83,519,196
Current Obligation: $58,262,119
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
Start Date: 2021-08-26
Current End Date: 2026-08-25
Potential End Date: 2032-07-30 00:00:00
Last Modified: 2026-04-10
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