HHS awarded Verizon $33.4M for communications services, with a 100% prime contractor performance score

Contract Overview

Contract Amount: $33,428,313 ($33.4M)

Contractor: Verizon Federal Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2004-11-02

End Date: 2005-09-30

Contract Duration: 332 days

Daily Burn Rate: $100.7K/day

Number of Offers Received: 1

Pricing Type: FIXED PRICE

Sector: Other

Official Description: TELEPHONE AND-OR COMMUNICATIONS SER

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20857

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $33.4 million to VERIZON FEDERAL INC. for work described as: TELEPHONE AND-OR COMMUNICATIONS SER Key points: 1. The contract demonstrates strong prime contractor performance, indicated by a perfect score. 2. The value of this contract, while substantial, needs to be benchmarked against similar telecommunications service agreements. 3. Competition dynamics are unclear without further details on the procurement process. 4. The contract duration of 332 days suggests a focused, short-term need for services. 5. Geographic concentration in Maryland (MD) is noted for this service delivery. 6. The fixed-price contract type suggests cost certainty for the government.

Value Assessment

Rating: good

The total award of $33.4 million for communications services over approximately 11 months appears reasonable for a federal contract of this nature. However, a definitive value-for-money assessment requires comparison with prevailing market rates for similar telecommunications and data services during the contract period (2004-2005). Benchmarking against other government contracts for comparable services, considering factors like bandwidth, service level agreements, and geographic coverage, would provide a clearer picture of its cost-effectiveness. The perfect prime contractor performance score (100%) suggests the contractor met or exceeded expectations, which can be an indicator of good value delivery.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

The provided data does not specify the procurement method used for this contract. It is listed as a 'DELIVERY ORDER' with a single award, but the initial award mechanism (e.g., full and open competition, sole source, limited competition) is not detailed. Understanding how this contract was competed is crucial for assessing the level of competition and its potential impact on pricing. Without this information, it's difficult to determine if the government secured the best possible pricing and terms.

Taxpayer Impact: The lack of transparency regarding the competition level makes it difficult to ascertain the direct impact on taxpayers. If the contract was awarded through robust competition, taxpayers likely benefited from competitive pricing. Conversely, limited or no competition could potentially lead to higher costs.

Public Impact

The Department of Health and Human Services (HHS) is the primary beneficiary, receiving essential communications services. The contract supports the operational needs of the Office of the Assistant Secretary for Administration within HHS. Services were delivered within Maryland (MD), indicating a specific geographic focus. The contract likely supported federal employees and administrative functions within the specified agency and location.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition details prevents a full assessment of taxpayer value.
Historical pricing data for similar services from 2004-2005 is not readily available for robust benchmarking.
The specific nature of 'TELEPHONE AND-OR COMMUNICATIONS SER' is broad and could encompass various service levels and costs.

Positive Signals

The prime contractor achieved a perfect performance score (100%), indicating high-quality service delivery.
The fixed-price contract type offers budget predictability for the government.
The contract was awarded to a single entity, potentially simplifying management and oversight.

Sector Analysis

This contract falls within the Telecommunications and IT Services sector, a critical area for government operations. The market for such services is typically characterized by a mix of large established providers and specialized niche players. Federal spending in this sector is substantial, driven by the need for secure, reliable, and high-speed communication networks. Benchmarking this $33.4 million award would involve comparing it to other large federal telecommunications contracts awarded around the 2004-2005 timeframe, considering the scope of services, duration, and specific technologies employed. The market is often influenced by government-wide acquisition contracts (GWACs) and other large-scale agreements.

Small Business Impact

The provided data indicates that small business participation was not a factor in this specific award, as the 'ss' (small business set-aside) and 'sb' (small business) flags are false. There is no information on subcontracting plans or actual subcontracting to small businesses. Therefore, the direct impact on the small business ecosystem from this particular contract appears to be minimal, as it was awarded to a large prime contractor without specific small business considerations.

Oversight & Accountability

Oversight for this contract would have been managed by the contracting officers and program managers within the Department of Health and Human Services, specifically the Office of the Assistant Secretary for Administration. As a delivery order under a larger contract vehicle (implied), oversight might also involve the administration of the base contract. Transparency is limited by the available data; however, the existence of a performance score suggests some level of performance monitoring. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Telecommunications Services
HHS IT Spending
Government Communications Contracts
Administrative Support Services

Risk Flags

Lack of competition details
Age of contract data limits modern benchmarking
Broad service description

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $33.4 million to VERIZON FEDERAL INC.. TELEPHONE AND-OR COMMUNICATIONS SER

Who is the contractor on this award?

The obligated recipient is VERIZON FEDERAL INC..

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Office of the Assistant Secretary for Administration).

What is the total obligated amount?

The obligated amount is $33.4 million.

What is the period of performance?

Start: 2004-11-02. End: 2005-09-30.

What specific types of telephone and communications services were included in this $33.4 million contract?

The provided data categorizes the service as 'TELEPHONE AND-OR COMMUNICATIONS SER,' which is quite broad. This could encompass a range of services including voice transmission (traditional phone lines, VoIP), data transmission (internet access, dedicated lines), network infrastructure, potentially managed services, and related support. Without more granular details from the contract's statement of work, it's impossible to specify the exact mix of services. The period of performance (late 2004 to late 2005) suggests services relevant to that era's technology, likely including POTS, early broadband, and possibly early forms of managed network services. The fixed-price nature implies a defined scope was agreed upon at the time of award.

How does the $33.4 million award compare to other federal spending on similar communications services during the 2004-2005 period?

Comparing this $33.4 million award requires access to historical federal procurement databases and analysis tools that can filter for similar service descriptions (telecommunications, communications services) and the relevant timeframe (FY2004-2005). General trends indicate that federal spending on telecommunications was significant, driven by agencies like DoD, DHS, and HHS. Large contracts for network infrastructure, voice services, and data circuits were common. A contract of this size would be considered substantial but not exceptionally large compared to enterprise-wide network deals. Benchmarking would ideally involve looking at contracts with similar durations, geographic scopes (if applicable), and service levels. Without specific comparable contract data, it's difficult to definitively state if $33.4M was high or low, but it represents a significant investment in essential operational infrastructure for HHS.

What does the 100% prime contractor performance score signify for this contract?

A 100% prime contractor performance score indicates that Verizon Federal Inc. fully met or exceeded all performance requirements outlined in the contract. This is a highly positive signal, suggesting that the services delivered were of high quality, on time, and in accordance with the agreed-upon terms and conditions. For the government, this means the agency received the expected value from the contract, and operational disruptions due to service issues were likely minimal. It reflects positively on Verizon's ability to execute the contract requirements effectively and suggests a strong working relationship between the contractor and the contracting agency during the period of performance.

What are the potential risks associated with a fixed-price contract for communications services?

Fixed-price contracts, while offering cost certainty to the government, can introduce risks for both parties. For the contractor (Verizon, in this case), the primary risk is that the actual cost of providing the services exceeds the fixed price, leading to reduced profit margins or even a loss. This can occur due to unforeseen technical challenges, increased operational costs, or scope creep if not managed tightly. For the government, the risk lies in potentially overpaying if the contractor is highly efficient and the fixed price was set conservatively, or if the scope of work is not clearly defined, leading to disputes. However, for well-defined services like communications, where costs are relatively predictable, fixed-price contracts are often preferred for budget management. The perfect performance score suggests these risks were well-managed in this instance.

Given the contract's age (2004-2005), how might the technology and service offerings have evolved since then?

Technology and service offerings in telecommunications have evolved dramatically since 2004-2005. Back then, services likely included traditional circuit-switched voice, early forms of broadband internet (DSL, early fiber), and potentially Frame Relay or ATM for data. The rise of Voice over IP (VoIP) was underway but not as ubiquitous as today. Cloud-based communication services, Software-Defined Networking (SDN), advanced unified communications platforms, and ubiquitous high-speed fiber optics were either nascent or non-existent. Federal agencies now leverage highly integrated, secure, and often cloud-enabled communication solutions offering greater bandwidth, flexibility, and advanced features (e.g., video conferencing, collaboration tools) compared to what was standard over 15 years ago. This contract represents a snapshot of a much less sophisticated technological landscape.

Contractor Details

Parent Company: Verizon Communications Inc

Address: 1320 N. COURTHOUSE ROAD, ARLINGTON, VA, 22201

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $33,428,313

Exercised Options: $33,428,313

Current Obligation: $33,428,313

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS11K00BJD0005

IDV Type: IDC

Timeline