State Department's $61M passport call center contract awarded to AT&T without competition

Contract Overview

Contract Amount: $61,263,537 ($61.3M)

Contractor: AT&T Enterprises, LLC

Awarding Agency: Department of State

Start Date: 2006-10-31

End Date: 2009-04-30

Contract Duration: 912 days

Daily Burn Rate: $67.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: NATIONAL PASSPORT INFORMATION CENTER SERVICES

Place of Performance

Location: DOVER, STRAFFORD County, NEW HAMPSHIRE, 03820

State: New Hampshire Government Spending

Plain-Language Summary

Department of State obligated $61.3 million to AT&T ENTERPRISES, LLC for work described as: NATIONAL PASSPORT INFORMATION CENTER SERVICES Key points: 1. The contract's value, exceeding $61 million, represents a significant investment in essential citizen services. 2. Sole-source award raises questions about potential missed opportunities for cost savings through competition. 3. The duration of the contract, spanning over two years, indicates a long-term need for these services. 4. The fixed-price nature of the contract provides cost certainty for the government. 5. The absence of small business set-asides suggests limited opportunities for smaller firms in this specific award. 6. The contract supports critical functions related to passport services, impacting millions of citizens annually.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging without comparable competitive bids. The total value of over $61 million for telephone answering services over approximately two years suggests a substantial operational scale. However, the lack of competition prevents a direct assessment of whether this price represents optimal value for money compared to what could have been achieved in a more open market. Without competitive data, it's difficult to definitively state if the pricing is aligned with market rates for similar large-scale call center operations.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning AT&T was the only vendor considered. The justification for this approach is not detailed in the provided data. Sole-source awards typically occur when only one vendor possesses the necessary capabilities, or in urgent situations. The lack of competition means there was no opportunity for other qualified vendors to bid, potentially limiting price discovery and innovation.

Taxpayer Impact: Taxpayers may not have received the benefit of competitive pricing, which could have driven down costs. The absence of a competitive process means the government could not leverage market forces to secure the best possible value.

Public Impact

Citizens applying for or inquiring about U.S. passports benefit from continuous access to information and support. The contract ensures the operational continuity of the National Passport Information Center, a critical public-facing service. Services are delivered nationwide, supporting the passport application process for all U.S. citizens. The contract sustains jobs within AT&T, contributing to the telecommunications and customer service workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs than a competitively bid contract.
Sole-source awards can reduce transparency and accountability in government spending.
Long-term reliance on a single provider could create vendor lock-in and reduce flexibility.
Absence of small business participation limits opportunities for smaller, specialized firms.

Positive Signals

Award to an established telecommunications provider suggests a high likelihood of reliable service delivery.
The fixed-price contract offers budget predictability for the Department of State.
The contract supports a critical government function essential for international travel and citizen services.

Sector Analysis

The telecommunications and call center services sector is highly competitive, with numerous providers capable of offering such services. The government often leverages this competition to secure favorable pricing and service level agreements. However, in specific instances, sole-source awards are made due to unique requirements or existing infrastructure. This contract falls within the broader IT and professional services market, where large telecommunications companies like AT&T are significant players. Comparable spending benchmarks for large-scale government call center operations can vary widely based on scope, technology, and service level agreements.

Small Business Impact

This contract does not appear to have included a small business set-aside, as indicated by 'sb': false. Consequently, there were no specific requirements for AT&T to subcontract portions of this work to small businesses. This means that opportunities for small businesses to participate in delivering these critical passport information services were likely limited under this specific award. The overall impact on the small business ecosystem for this particular contract is minimal, as it was not designed to foster small business participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's contracting officers and program managers. Accountability measures would be defined within the contract's terms and conditions, including performance standards and reporting requirements. Transparency is limited due to the sole-source nature of the award. While specific Inspector General (IG) jurisdiction for this particular contract isn't detailed, the Department of State's Office of Inspector General generally oversees departmental operations and expenditures, including major contracts.

Related Government Programs

Department of State Consular Services
Federal Contact Center Services
Citizen Information Services
National Security and International Affairs Support

Risk Flags

Sole-source award may limit cost savings.
Lack of competition reduces transparency.
Potential for vendor lock-in.
No small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $61.3 million to AT&T ENTERPRISES, LLC. NATIONAL PASSPORT INFORMATION CENTER SERVICES

Who is the contractor on this award?

The obligated recipient is AT&T ENTERPRISES, LLC.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $61.3 million.

What is the period of performance?

Start: 2006-10-31. End: 2009-04-30.

What was the specific justification for awarding this contract on a sole-source basis to AT&T?

The provided data does not include the specific justification for the sole-source award to AT&T. Typically, sole-source contracts are awarded when only one responsible source is available or capable of meeting the government's needs. This could be due to unique technical requirements, proprietary technology, urgent and compelling circumstances, or a lack of adequate competition identified during market research. Without further documentation from the Department of State, the precise rationale remains unknown. This lack of transparency is a common concern with sole-source procurements, as it limits the public's understanding of why competitive processes were bypassed.

How does the total contract value of $61.2 million compare to similar government call center contracts?

Direct comparison of the $61.2 million total contract value to similar government call center contracts is difficult without knowing the specific scope, duration, and service level agreements (SLAs) of those other contracts. However, for a contract spanning approximately 2.5 years (from Oct 2006 to Apr 2009), this value suggests a significant operational scale. Large federal call centers supporting millions of inquiries can easily reach tens of millions of dollars. If this contract was competitively bid, one might expect per-year costs to be in the $15-25 million range, depending on complexity. As a sole-source award, it's harder to ascertain if this represents a market-competitive rate.

What are the primary risks associated with a sole-source award of this magnitude?

The primary risks associated with a sole-source award of this magnitude include potential overpayment due to the absence of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency beyond contractual minimums, and a lack of market validation for the chosen solution and pricing. There's also a risk of vendor lock-in, making it difficult and costly to switch providers in the future. Furthermore, sole-source awards can create a perception of unfairness and reduce overall government procurement transparency, potentially hindering future competition if other firms feel the market is closed.

What performance metrics or oversight mechanisms were likely in place for this contract?

While specific performance metrics are not detailed, government contracts of this nature typically include Service Level Agreements (SLAs) that define key performance indicators (KPIs). These often cover call answer rates, average handling times, customer satisfaction scores, and system uptime. Oversight would likely be managed by a Contracting Officer's Representative (COR) within the Department of State, responsible for monitoring contractor performance, approving invoices, and ensuring compliance with contract terms. Regular performance reviews and status meetings would also be standard practice to ensure the National Passport Information Center services met the required standards.

What is the historical spending trend for passport information center services by the Department of State?

The provided data only covers a single contract award from 2006-2009. To understand historical spending trends, one would need to examine contract awards for similar services over a longer period, potentially including contracts awarded before and after this AT&T agreement. Analyzing trends would involve looking at the number of contracts, total spending, average contract values, and whether these services have been consistently awarded competitively or through sole-source actions. This would reveal patterns in how the Department of State procures these essential citizen services and whether spending has increased or decreased over time.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Business Support Services › Telephone Answering Services

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: AT&T Inc. (UEI: 108024050)

Address: AT&T CORP, COLUMBIA, MD, 03

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

Financial Breakdown

Contract Ceiling: $61,263,537

Exercised Options: $61,263,537

Current Obligation: $61,263,537

Timeline