DoD's $15M Lumen contract for telecom services in Texas awarded without competition

Contract Overview

Contract Amount: $15,038,755 ($15.0M)

Contractor: Lumen Technologies Government Solutions, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-09-27

End Date: 2026-04-30

Contract Duration: 1,676 days

Daily Burn Rate: $9.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: LINK 7 RECONFIGURATION

Place of Performance

Location: FORT BLISS, EL PASO County, TEXAS, 79918

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $15.0 million to LUMEN TECHNOLOGIES GOVERNMENT SOLUTIONS, INC. for work described as: LINK 7 RECONFIGURATION Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. The fixed-price contract structure may limit contractor incentive to reduce costs over its duration. 3. Lack of competition suggests potential risks related to contractor performance and innovation. 4. The contract supports essential telecommunications infrastructure for defense operations. 5. Spending on wired telecommunications carriers is a significant category within federal IT procurement. 6. The contract's duration of over 5 years warrants close monitoring of performance and cost trends.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and specific service requirements. Without competitive bids, it's difficult to ascertain if the $15 million price tag represents a fair market value. The firm-fixed-price structure, while providing cost certainty, could lead to the government overpaying if costs decrease or efficiency increases significantly during the contract period. Further analysis would require comparing the scope of services and pricing to similar, competitively awarded contracts for telecommunications infrastructure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not openly competed. This approach is typically used when only one responsible source can provide the required services. The lack of competition means that the Department of Defense did not benefit from the price discovery and potential cost savings that typically arise from multiple bidders vying for a contract. This can limit the government's ability to secure the most advantageous pricing.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive pressure to drive down prices. The government has less leverage to negotiate favorable terms when there are no alternative providers considered.

Public Impact

The Department of Defense benefits from reliable wired telecommunications services essential for its operations. The contract ensures the availability of critical communication infrastructure. Services are primarily delivered within Texas, supporting regional defense activities. The contract likely supports a workforce involved in telecommunications installation, maintenance, and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and may result in higher costs for taxpayers.
Long contract duration (over 5 years) increases the risk of cost escalation or performance degradation without competitive checks.
Lack of transparency in the procurement process due to non-competitive award.
Potential for vendor lock-in, making future transitions more complex and costly.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Contract supports critical defense communication infrastructure, ensuring operational readiness.
Specific geographic focus (Texas) allows for tailored service delivery.

Sector Analysis

The wired telecommunications carriers sector is a mature industry providing essential connectivity services. Federal spending in this area supports a wide range of government functions, from basic office communication to complex data transmission for defense and intelligence operations. The market is characterized by established providers and significant infrastructure investments. This contract fits within the broader category of federal IT and telecommunications procurement, which represents a substantial portion of government spending.

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 Government Solutions, Inc., is a large telecommunications provider. There is no explicit information provided regarding subcontracting plans for small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is likely minimal, though large prime contractors often engage small businesses for specialized support services.

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, transparency might be limited compared to competitively bid contracts. Accountability measures would be defined within the contract's terms and conditions, focusing on performance metrics and service level agreements. Inspector General jurisdiction would apply to investigate any potential fraud, waste, or abuse related to the contract.

Related Government Programs

Defense Information Systems Agency (DISA) Contracts
Federal Telecommunications Services
Wired Network Infrastructure Procurement
Department of Defense IT Spending

Risk Flags

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

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.0 million to LUMEN TECHNOLOGIES GOVERNMENT SOLUTIONS, INC.. LINK 7 RECONFIGURATION

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 $15.0 million.

What is the period of performance?

Start: 2021-09-27. End: 2026-04-30.

What is the track record of Lumen Technologies Government Solutions, Inc. with the Department of Defense?

Lumen Technologies Government Solutions, Inc. has a history of contracting with the Department of Defense, providing various telecommunications and IT services. While specific details of past performance are not provided in this data snippet, large telecommunications providers like Lumen typically hold numerous contracts across federal agencies. Their track record would generally involve delivering network infrastructure, managed services, and connectivity solutions. Assessing their performance would require reviewing past contract awards, performance evaluations (e.g., CPARS reports), and any documented issues or successes in fulfilling previous DoD requirements. A comprehensive review would look at their ability to meet deadlines, quality standards, and budgetary constraints on prior engagements.

How does the $15 million cost compare to similar federal telecommunications contracts?

Directly comparing the $15 million cost is difficult without knowing the exact scope, duration, and specific services included. However, federal spending on wired telecommunications services can range significantly. Contracts for large-scale network infrastructure, data center connectivity, or nationwide service delivery can easily reach tens or hundreds of millions of dollars over several years. Conversely, smaller, localized service contracts might be in the low millions. Given this contract is for wired telecommunications carriers and has a duration of over 5 years, $15 million might be considered moderate, but its value is questionable due to the lack of competition. A true benchmark would require comparing it against similar sole-source or competitively awarded contracts for comparable services within the same geographic region or for similar agency needs.

What are the primary risks associated with a sole-source award for telecommunications services?

The primary risks associated with a sole-source award for telecommunications services include a lack of price competition, which can lead to the government paying a premium. Without multiple bidders, there is less incentive for the contractor to offer the most cost-effective solution. There's also a potential risk to service quality and innovation, as the contractor may face less pressure to continuously improve or maintain high standards. Furthermore, sole-source awards can limit transparency in the procurement process and potentially lead to vendor lock-in, making it difficult and costly to switch providers in the future. This can reduce the government's negotiating leverage and flexibility.

How effective is the firm-fixed-price (FFP) contract type in managing costs for this type of service?

The firm-fixed-price (FFP) contract type is generally effective in providing cost certainty for the government, as the contractor assumes most of the risk for cost overruns. For services like wired telecommunications, where the scope is well-defined, FFP can be advantageous. It incentivizes the contractor to manage their costs efficiently to maximize profit. However, if the initial price is not set competitively or if unforeseen circumstances arise that significantly increase the contractor's costs, the government might end up paying a price that is higher than necessary. In a sole-source scenario, the effectiveness of FFP hinges heavily on the initial price negotiation and the government's ability to accurately define the required services.

What is the historical spending trend for wired telecommunications carriers by the Department of Defense?

Historical spending by the Department of Defense (DoD) on wired telecommunications carriers has been substantial and consistent, reflecting the critical need for robust communication infrastructure to support global operations. While specific year-over-year figures for the DoD's total spending in this category fluctuate based on evolving technological needs, infrastructure upgrades, and specific mission requirements, it generally represents a significant portion of the department's IT and telecommunications budget. Agencies like the Defense Information Systems Agency (DISA) are major procurers in this space, managing vast networks. Trends often show a shift towards higher bandwidth, more secure, and integrated communication systems, driving continuous investment in this sector.

What are the implications of the contract's end date in 2026 for future telecommunications needs?

The contract's end date of April 30, 2026, means that the Department of Defense will need to plan for its future telecommunications needs well in advance. By this time, technology may have advanced, potentially offering more efficient or cost-effective solutions. The DoD will need to assess whether to re-compete the contract, potentially with updated requirements reflecting new technologies or market conditions, or to extend services with the incumbent provider if feasible and cost-effective. The lead time required for planning, soliciting, and awarding a new contract, especially for critical infrastructure, means that the process should ideally begin at least 12-18 months before the current contract expires to ensure seamless service continuity.

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: 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: $15,038,755

Exercised Options: $15,038,755

Current Obligation: $15,038,755

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC101319D0002

IDV Type: IDC

Timeline