DoD's $200M Wireless Service Contract with Cellco Partnership Faces Scrutiny Over Long Duration and Limited Competition
Contract Overview
Contract Amount: $20,043,660 ($20.0M)
Contractor: Cellco Partnership
Awarding Agency: Department of Defense
Start Date: 2019-11-21
End Date: 2034-06-23
Contract Duration: 5,328 days
Daily Burn Rate: $3.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: WIRELESS VOICE&DATA SERVICE PLANS
Place of Performance
Location: BASKING RIDGE, SOMERSET County, NEW JERSEY, 07920
Plain-Language Summary
Department of Defense obligated $20.0 million to CELLCO PARTNERSHIP for work described as: WIRELESS VOICE&DATA SERVICE PLANS Key points: 1. Significant spending on essential communication services. 2. Potential for price increases due to long contract term. 3. Limited competition may impact cost-effectiveness. 4. Sector: Information Technology (IT) services.
Value Assessment
Rating: questionable
The contract's total value is substantial. Benchmarking per-unit costs for wireless plans is complex due to varying service levels and data needs. However, the extended duration without clear price adjustments raises concerns about value for money over time.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition. However, the long performance period (over 14 years) could deter new entrants or limit future competitive opportunities if not re-competed effectively.
Taxpayer Impact: Taxpayers may be overpaying if prices are not regularly benchmarked against market rates, especially given the extended duration of the contract.
Public Impact
Ensures critical communication capabilities for the Department of Defense. Long-term commitment may provide service stability. Potential for price escalation over the contract's lifespan. Lack of transparency on specific service plan costs. Impacts federal agencies relying on secure wireless communication.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (14+ years)
- Potential for price creep
- Limited visibility into unit costs
Positive Signals
- Awarded through full and open competition
- Provides essential communication services
Sector Analysis
This contract falls within the IT services sector, specifically telecommunications. Spending on wireless services is a significant component of federal IT budgets, supporting agency operations and personnel mobility. Benchmarks vary widely based on data volume and service features.
Small Business Impact
The provided data does not indicate whether small businesses were involved in this contract, either as prime contractors or subcontractors. Further analysis would be needed to determine small business participation.
Oversight & Accountability
The long duration of this contract warrants close oversight to ensure continued fair pricing and service quality. Regular performance reviews and market comparisons are crucial for accountability.
Related Government Programs
- Other Computer Related Services
- Department of Defense Contracting
- Defense Information Systems Agency Programs
Risk Flags
- Long contract duration
- Potential for price escalation
- Technological obsolescence risk
- Limited flexibility for market changes
Tags
other-computer-related-services, department-of-defense, nj, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $20.0 million to CELLCO PARTNERSHIP. WIRELESS VOICE&DATA SERVICE PLANS
Who is the contractor on this award?
The obligated recipient is CELLCO PARTNERSHIP.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Information Systems Agency).
What is the total obligated amount?
The obligated amount is $20.0 million.
What is the period of performance?
Start: 2019-11-21. End: 2034-06-23.
How does the per-unit cost of these wireless plans compare to commercial market rates for similar services, considering the volume and specific features provided to the DoD?
Benchmarking is challenging without detailed service plan specifics. However, commercial plans often offer more flexibility and competitive pricing for comparable data and voice services. The DoD's long-term, fixed-price contract may not reflect current market innovations or price reductions, potentially leading to higher per-unit costs over its extended term.
What are the primary risks associated with a contract of this length (over 14 years) for wireless voice and data services?
The primary risks include technological obsolescence, where the contracted services become outdated before the contract ends. Price escalation is another major risk, as the fixed-price nature may not account for market fluctuations or competitive pressures that could lower costs. Furthermore, the long duration can reduce flexibility to adopt newer, more cost-effective solutions.
How effectively does this contract ensure the government receives optimal value for its investment in wireless communication services over its entire duration?
The effectiveness in ensuring optimal value is questionable due to the extended duration. While full and open competition was used initially, the long term limits opportunities for re-evaluation against evolving market conditions. Without mechanisms for periodic price adjustments or service re-competition, the government risks paying above-market rates as technology and pricing evolve.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Verizon Maryland LLC
Address: 1 VERIZON WAY, BASKING RIDGE, NJ, 07920
Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership
Financial Breakdown
Contract Ceiling: $20,043,660
Exercised Options: $20,043,660
Current Obligation: $20,043,660
Actual Outlays: $9,712,291
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: GS35F0119P
IDV Type: FSS
Timeline
Start Date: 2019-11-21
Current End Date: 2034-06-23
Potential End Date: 2034-06-23 00:00:00
Last Modified: 2025-04-01
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