DoD's $345M Lumen lease for wired telecom services awarded under full and open competition

Contract Overview

Contract Amount: $34,540,134 ($34.5M)

Contractor: Lumen Technologies Government Solutions, Inc.

Awarding Agency: Department of Defense

Start Date: 2026-01-13

End Date: 2032-07-30

Contract Duration: 2,390 days

Daily Burn Rate: $14.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: EICL000584EBM - OTU-2 COMMERCIAL LEASE INTRA SWA.

Plain-Language Summary

Department of Defense obligated $34.5 million to LUMEN TECHNOLOGIES GOVERNMENT SOLUTIONS, INC. for work described as: EICL000584EBM - OTU-2 COMMERCIAL LEASE INTRA SWA. Key points: 1. Contract value of $345 million over its period of performance. 2. Awarded to Lumen Technologies Government Solutions, Inc. for wired telecommunications services. 3. The contract type is Firm Fixed Price, indicating predictable costs for the government. 4. Duration of the contract is approximately 79 months, from January 2026 to July 2032. 5. This is a Delivery Order under an existing contract, suggesting a pre-established relationship or framework. 6. The North American Industry Classification System (NAICS) code is 517110 (Wired Telecommunications Carriers).

Value Assessment

Rating: fair

The total contract value is $345 million over nearly 6.5 years. Benchmarking this against similar large-scale telecommunications contracts is challenging without more specific service details. However, the firm fixed-price structure provides cost certainty. The base award amount of $1.44 million suggests this is an initial or smaller portion of the total potential value, with the remaining value likely tied to options or future task orders.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 4 bidders suggests a reasonably competitive environment for this type of telecommunications service. This level of competition is generally favorable for price discovery and ensuring the government receives competitive pricing.

Taxpayer Impact: Full and open competition helps ensure taxpayer dollars are used efficiently by driving down costs through market forces.

Public Impact

Provides essential wired telecommunications infrastructure and services to the Department of Defense. Supports military operations and administrative functions requiring reliable communication networks. The services are likely utilized across various DoD facilities, potentially nationwide or globally. Ensures continuity of communication services for national security operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if service demands exceed initial projections and lead to significant option exercise.
Dependence on a single vendor for critical telecommunications infrastructure could pose a risk if performance issues arise.
The long duration of the contract may lead to technological obsolescence if not managed proactively.

Positive Signals

Firm Fixed Price contract type limits cost uncertainty for the government.
Awarded through full and open competition, suggesting competitive pricing was achieved.
The contract is a delivery order, implying it fits within an existing, potentially pre-vetted, contract vehicle.

Sector Analysis

The wired telecommunications carriers sector is a mature industry dominated by large providers offering essential connectivity services. The Department of Defense is a significant consumer of these services, requiring robust and secure networks for its global operations. This contract falls within the broader telecommunications and IT services market, which is a substantial portion of federal IT spending. Benchmarking against similar large-scale government telecom contracts would require detailed analysis of service scope and duration.

Small Business Impact

There is no indication that this contract includes a small business set-aside. Given the nature of large-scale telecommunications infrastructure and services, it is unlikely that small businesses would be the primary awardees for the prime contract. However, opportunities for subcontracting to small businesses may exist, depending on the specific requirements and the prime contractor's subcontracting plan.

Oversight & Accountability

As a delivery order under an existing contract, oversight mechanisms are likely tied to the parent contract's terms and conditions. The Department of Defense and the Defense Information Systems Agency (DISA) are responsible for monitoring performance and ensuring compliance. Transparency is facilitated by contract award databases, but detailed performance metrics and specific oversight activities are typically internal to the agency.

Related Government Programs

Defense Information Systems Agency (DISA) Contracts
Department of Defense Telecommunications Services
Wired Telecommunications Carrier Services
Federal Government Leased Telecommunications

Risk Flags

Long-term contract duration may lead to technological obsolescence.
Vendor lock-in for critical communication services.
Performance issues could impact mission-critical operations.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.5 million to LUMEN TECHNOLOGIES GOVERNMENT SOLUTIONS, INC.. EICL000584EBM - OTU-2 COMMERCIAL LEASE INTRA SWA.

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 $34.5 million.

What is the period of performance?

Start: 2026-01-13. End: 2032-07-30.

What is the historical spending pattern for Lumen Technologies Government Solutions, Inc. with the Department of Defense?

Analyzing historical spending with Lumen Technologies Government Solutions, Inc. requires accessing detailed federal procurement data. Based on available information, Lumen (and its predecessors like CenturyLink) has a significant history of receiving contracts from various federal agencies, including the Department of Defense. These contracts typically span telecommunications services, network infrastructure, and IT support. The total value of contracts awarded can fluctuate year-over-year based on agency needs, contract renewals, and new procurements. A comprehensive review would involve aggregating all awarded contracts, delivery orders, and task orders to understand the volume, types of services, and total financial commitment over time. This specific $345 million contract represents a substantial single award, indicating a continued reliance on Lumen for critical communication services.

How does the per-unit cost of this contract compare to similar telecommunications leases for the DoD?

Determining a precise per-unit cost comparison for this contract is challenging without granular data on the specific services rendered (e.g., bandwidth per circuit, number of lines, service level agreements). The contract is a Firm Fixed Price (FFP) delivery order valued at $345 million over approximately 79 months. This suggests an average annual spend of roughly $43.6 million. To benchmark effectively, one would need to compare this average annual spend against other FFP contracts for similar wired telecommunications services awarded by the DoD or other federal agencies, considering factors like geographic coverage, service types, and performance requirements. Without such detailed comparative data, a direct per-unit cost assessment remains difficult, though the full and open competition suggests a market-driven price was negotiated.

What are the primary risks associated with this contract for the Department of Defense?

The primary risks associated with this $345 million wired telecommunications lease contract include vendor lock-in and potential technological obsolescence. Given the long duration (nearly 6.5 years) and the critical nature of telecommunications, the DoD becomes heavily reliant on Lumen Technologies. If Lumen experiences financial instability, service disruptions, or fails to keep pace with evolving network technologies, it could significantly impact DoD operations. Furthermore, the firm fixed-price nature, while offering cost certainty, could lead to the government paying for services that become less valuable due to technological advancements if the contract terms are not flexible enough to incorporate upgrades or new capabilities. Ensuring robust performance metrics and clear exit strategies within the contract is crucial to mitigate these risks.

What is the expected impact of this contract on the telecommunications market for federal agencies?

This contract, awarded under full and open competition to Lumen Technologies, signals continued significant federal spending in the wired telecommunications sector. It reinforces Lumen's position as a key provider of essential communication infrastructure for large government entities like the DoD. The competitive award process suggests that other telecommunications providers are actively vying for and capable of securing large federal contracts. This ongoing competition can drive innovation and potentially lead to better service offerings and pricing across the federal market. However, it also highlights the concentration of large federal telecom contracts among a few major players, which could influence market dynamics and the accessibility for smaller or emerging providers.

How does the duration of this contract (2390 days) compare to typical federal telecommunications leases?

The duration of this contract, approximately 2390 days (or about 6.5 years), is relatively long but not uncommon for major federal telecommunications infrastructure and service contracts. Federal agencies often enter into multi-year agreements for critical services like wired telecommunications to ensure continuity, leverage economies of scale, and lock in pricing. Contracts of 5-10 years are frequently seen in this sector, especially when significant network build-out or long-term service level agreements are involved. Shorter durations might be used for more commoditized services or pilot programs, while longer terms are typical for strategic, mission-critical infrastructure investments where stability and predictable costs are paramount for the agency's operations.

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

Address: 931 14TH STE 1000 B, DENVER, CO, 80202

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

Financial Breakdown

Contract Ceiling: $34,540,134

Exercised Options: $34,540,134

Current Obligation: $34,540,134

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q17NSD3006

IDV Type: IDC

Timeline