DoD's $18.7M Verizon Lease for Europe-SW Asia Network Faces Scrutiny Over Long Term and Competition
Contract Overview
Contract Amount: $18,724,268 ($18.7M)
Contractor: Verizon Business Network Services LLC
Awarding Agency: Department of Defense
Start Date: 2025-11-21
End Date: 2032-07-30
Contract Duration: 2,443 days
Daily Burn Rate: $7.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: EIVN000007EBM - OTU-2 (10.709GB) COMMERCIAL LEASE BETWEEN EUROPE AND SOUTHWEST ASIA.
Plain-Language Summary
Department of Defense obligated $18.7 million to VERIZON BUSINESS NETWORK SERVICES LLC for work described as: EIVN000007EBM - OTU-2 (10.709GB) COMMERCIAL LEASE BETWEEN EUROPE AND SOUTHWEST ASIA. Key points: 1. The contract spans over 7 years, raising questions about long-term necessity and potential for price escalation. 2. While awarded under full and open competition, the specific market dynamics for such specialized international telecommunications require deeper analysis. 3. The reliance on a single vendor for a critical network infrastructure presents potential risks if service is disrupted. 4. The 'Wired Telecommunications Carriers' sector is highly competitive, suggesting potential for better pricing in future procurements.
Value Assessment
Rating: fair
The $18.7 million cost over 7 years averages to approximately $2.67 million annually. Benchmarking against similar international telecommunications leases is difficult without more specific service details, but the duration suggests a need for careful value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded using full and open competition, which is positive for price discovery. However, the long duration and specialized nature of the service may limit the number of truly competitive bids.
Taxpayer Impact: Taxpayers are funding a critical communication link. While competition was sought, the long-term commitment warrants scrutiny to ensure continued value for money.
Public Impact
Ensures vital communication links between Europe and Southwest Asia for military operations. Supports Department of Defense personnel and mission objectives in critical geopolitical regions. Long-term commitment may lock in current technology, potentially missing out on future advancements or cost savings. Potential for service disruption impacts national security and operational readiness.
Waste & Efficiency Indicators
Waste Risk Score: 70 / 10
Warning Flags
- Long contract duration (over 7 years)
- Potential for vendor lock-in
- Reliance on a single provider for critical infrastructure
Positive Signals
- Awarded under full and open competition
- Supports critical national security communications
Sector Analysis
This contract falls within the Wired Telecommunications Carriers sector, which is essential for government operations. Spending benchmarks in this area are highly variable based on geographic scope, bandwidth, and service level agreements.
Small Business Impact
The data does not indicate any specific involvement or benefit for small businesses in this contract. Large telecommunications providers typically dominate these types of specialized, long-term infrastructure agreements.
Oversight & Accountability
The long-term nature of this contract necessitates robust oversight to ensure performance standards are met and that the government is receiving fair value throughout the contract period. Regular performance reviews and market analysis are crucial.
Related Government Programs
- Wired Telecommunications Carriers
- Department of Defense Contracting
- Defense Information Systems Agency Programs
Risk Flags
- Long-term commitment may not align with rapid technological advancements.
- Potential for vendor lock-in and reduced negotiating power over time.
- Reliance on a single provider for critical infrastructure poses a risk.
- Need for ongoing market analysis to ensure continued cost-effectiveness.
- Geopolitical instability in the covered regions could impact service delivery.
Tags
wired-telecommunications-carriers, department-of-defense, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $18.7 million to VERIZON BUSINESS NETWORK SERVICES LLC. EIVN000007EBM - OTU-2 (10.709GB) COMMERCIAL LEASE BETWEEN EUROPE AND SOUTHWEST ASIA.
Who is the contractor on this award?
The obligated recipient is VERIZON BUSINESS NETWORK SERVICES 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 $18.7 million.
What is the period of performance?
Start: 2025-11-21. End: 2032-07-30.
Is the 7-year duration truly necessary for the evolving telecommunications landscape, or could shorter, more frequent contract awards provide better value and technological adaptability?
The necessity of a 7-year duration requires justification based on the specific technological lifecycle and stability of the required services. Shorter contract terms, while potentially offering more flexibility and opportunities for competitive re-evaluation, might also lead to higher administrative costs and potential service interruptions during transition periods. A balance must be struck, considering the unique demands of international military communications.
What specific factors limited the competitive landscape despite the 'full and open' award, and could these be mitigated in future solicitations?
Factors limiting competition could include the highly specialized nature of international telecommunications infrastructure, stringent security requirements, and the significant investment needed by potential bidders to establish a presence and meet performance standards in the specified regions. Future solicitations could explore modular contract structures or phased approaches to encourage broader participation and innovation.
How does the annual cost of this lease compare to industry benchmarks for similar international dedicated network services, considering the specific bandwidth and service level agreements?
A precise comparison to industry benchmarks is challenging without detailed service specifications (e.g., bandwidth, latency guarantees, uptime SLAs). However, the average annual cost of approximately $2.67 million suggests a significant investment. Further analysis would require obtaining comparable market data for similar government or commercial international dedicated circuits.
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: 4
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Verizon Maryland LLC
Address: 22001 LOUDOUN COUNTY PKWY, ASHBURN, VA, 20147
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $18,724,268
Exercised Options: $18,724,268
Current Obligation: $18,724,268
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: GS00Q17NSD3009
IDV Type: IDC
Timeline
Start Date: 2025-11-21
Current End Date: 2032-07-30
Potential End Date: 2032-07-30 00:00:00
Last Modified: 2025-12-18
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