DoD's $297M DISA Fiber Optic Contract Awarded Sole-Source to Lumen Technologies

Contract Overview

Contract Amount: $296,749,109 ($296.7M)

Contractor: Lumen Technologies Government Solutions, Inc.

Awarding Agency: Department of Defense

Start Date: 2008-11-30

End Date: 2018-11-29

Contract Duration: 3,651 days

Daily Burn Rate: $81.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: DEFENSE INFORMATION SYSTEM NETWORK FIBER IRU OPERATION AND MAINTENANCE

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $296.7 million to LUMEN TECHNOLOGIES GOVERNMENT SOLUTIONS, INC. for work described as: DEFENSE INFORMATION SYSTEM NETWORK FIBER IRU OPERATION AND MAINTENANCE Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential value for money. 2. Long contract duration of nearly 10 years suggests a need for ongoing, critical infrastructure support. 3. The contract's value of over $296 million indicates significant reliance on this service by the Defense Information Systems Agency. 4. Lack of competition may lead to higher costs for taxpayers compared to a more open bidding process. 5. The firm-fixed-price structure provides cost certainty but may limit incentives for contractor efficiency. 6. This contract falls within the Wired Telecommunications Carriers sector, a mature but essential part of federal IT infrastructure.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and long duration. Without competitive bids, it's difficult to ascertain if Lumen Technologies' pricing reflects market rates or if taxpayers received the best possible value. The significant dollar amount suggests a critical need, but the absence of competition prevents a direct comparison to similar, recently competed contracts for similar services. Further analysis would be needed to assess if the pricing is reasonable in the context of the specific services provided and the prevailing market conditions for such long-term telecommunications infrastructure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in cases of urgent need. The lack of competition means that potential cost savings that could arise from a bidding process were not realized. It also limits the government's ability to explore innovative solutions or leverage market competition to drive down prices.

Taxpayer Impact: Taxpayers may have paid a premium for this service due to the absence of competitive pressure. The government did not benefit from the price discovery mechanisms inherent in a competitive procurement process.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Defense Information Systems Agency (DISA), which relies on this fiber optic network for its operations. The contract ensures the operation and maintenance of critical wired telecommunications infrastructure essential for secure military communications. The geographic impact is likely nationwide, supporting military installations and operations across various locations. This contract supports a specialized workforce within Lumen Technologies, including technicians and engineers responsible for maintaining the network.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential value for money.
Long contract duration may obscure opportunities for more cost-effective solutions over time.
Lack of transparency in the sole-source justification could hide inefficiencies.
Potential for vendor lock-in given the critical nature of the infrastructure.

Positive Signals

Ensures continuity of essential telecommunications services for national security.
Firm-fixed-price contract provides budget certainty for the agency.
Long-term award indicates a stable, reliable service provider for critical infrastructure.

Sector Analysis

This contract falls within the Wired Telecommunications Carriers industry, a sector characterized by established infrastructure and ongoing demand for high-speed data transmission. The market size for federal telecommunications services is substantial, with agencies like DISA being major consumers. This contract represents a significant portion of spending within this niche, focusing on the maintenance and operation of existing fiber optic networks rather than the deployment of new infrastructure. Comparable spending benchmarks would involve other long-term, large-scale telecommunications service contracts awarded to major carriers.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor, Lumen Technologies, is a large telecommunications provider. While large prime contractors are often required to subcontract portions of their work to small businesses, the specific subcontracting plan for this contract is not detailed here. The absence of a set-aside suggests that the primary focus was on securing the required services from a capable provider, rather than specifically promoting small business participation through this particular award.

Oversight & Accountability

Oversight for this contract would primarily fall under the purview of the Defense Information Systems Agency (DISA) contracting officers and program managers. They are responsible for monitoring performance, ensuring compliance with contract terms, and managing any modifications or disputes. The Department of Defense's Inspector General may also conduct audits or investigations into the contract's execution, particularly concerning its cost-effectiveness and adherence to procurement regulations, especially given its sole-source nature. Transparency is facilitated through contract databases, but detailed performance metrics and oversight reports are not publicly available.

Related Government Programs

Defense Information System Network (DISN) Services
Telecommunications Infrastructure Contracts
Wired Network Services
Federal Information Technology Contracts
Department of Defense Communications

Risk Flags

Sole-source award
Long contract duration
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $296.7 million to LUMEN TECHNOLOGIES GOVERNMENT SOLUTIONS, INC.. DEFENSE INFORMATION SYSTEM NETWORK FIBER IRU OPERATION AND MAINTENANCE

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 $296.7 million.

What is the period of performance?

Start: 2008-11-30. End: 2018-11-29.

What specific justification was provided for awarding this contract on a sole-source basis?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source procurements are justified under circumstances such as unique capabilities, urgent and compelling needs, or when only one responsible source exists. For a contract of this magnitude and duration, the justification would likely involve a detailed analysis by the Defense Information Systems Agency (DISA) demonstrating why competitive bidding was not feasible or advantageous. This could include factors like existing infrastructure integration, specialized technical requirements, or national security imperatives that preclude a broader competition. Without the official justification document, it is difficult to ascertain the precise rationale.

How does the annual cost of this contract compare to similar telecommunications contracts awarded by other federal agencies?

Comparing the annual cost of this contract, approximately $29.7 million ($296,749,108.9 / 10 years), to similar telecommunications contracts is challenging without more specific details on the services rendered and the contract terms. Federal telecommunications contracts vary widely based on bandwidth, geographic coverage, service level agreements, and technology. However, given the sole-source nature and the long duration, it is plausible that the annual cost might be higher than what could be achieved through a competitive bidding process for comparable services. Benchmarking would ideally involve analyzing recently awarded, competed contracts for similar fiber optic network operations and maintenance services to assess price reasonableness.

What are the key performance indicators (KPIs) used to measure the performance of Lumen Technologies under this contract?

The provided data does not specify the key performance indicators (KPIs) for this contract. However, for a contract focused on the operation and maintenance of a fiber optic network, typical KPIs would likely include network uptime and availability, latency, data transmission speeds, mean time to repair (MTTR) for outages, and adherence to security protocols. The Defense Information Systems Agency (DISA) would establish these metrics in the contract's Performance Work Statement (PWS) to ensure the reliability and security of critical communications infrastructure. Performance would be monitored by DISA contracting officers and technical representatives.

What is the historical spending trend for this specific service or contract vehicle over the past decade?

The provided data indicates a single contract award for the 'DEFENSE INFORMATION SYSTEM NETWORK FIBER IRU OPERATION AND MAINTENANCE' to Lumen Technologies Government Solutions, Inc., spanning from November 30, 2008, to November 29, 2018, with a total value of $296,749,108.9. This suggests that this particular contract represents the primary, if not sole, federal spending vehicle for this specific service during that period. There is no information provided about prior or subsequent contracts for this exact service, making it difficult to establish a multi-year spending trend beyond this single, long-term award. Further research into DISA's procurement history would be needed to identify any preceding or successor contracts.

What are the potential risks associated with relying on a single contractor for such a critical and long-term telecommunications service?

Relying on a single contractor, like Lumen Technologies in this case, for a critical and long-term telecommunications service presents several potential risks. Firstly, there is the risk of vendor lock-in, where the government becomes heavily dependent on the contractor's proprietary systems or infrastructure, making it difficult and costly to switch providers. Secondly, without competition, there's a reduced incentive for the contractor to innovate or offer cost reductions, potentially leading to higher prices over time. Thirdly, the contractor's financial stability or operational capacity could be a risk; if Lumen Technologies faced significant financial difficulties or operational disruptions, it could severely impact the Defense Information System Network (DISN). Finally, a sole-source award bypasses the vetting process inherent in competitive bidding, potentially masking underlying risks associated with the contractor's past performance or security posture.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

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: $296,749,109

Exercised Options: $296,749,109

Current Obligation: $296,749,109

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline