AT&T awarded $36.6M for Treasury's wired telecommunications, a significant investment in network infrastructure

Contract Overview

Contract Amount: $36,574,017 ($36.6M)

Contractor: AT&T Enterprises, LLC

Awarding Agency: Department of the Treasury

Start Date: 2011-09-20

End Date: 2015-09-30

Contract Duration: 1,471 days

Daily Burn Rate: $24.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: TNET CONTRACT MPLS CIRCUITS&TNET SERVI

Place of Performance

Location: VIENNA, FAIRFAX County, VIRGINIA, 22182, UNITED STATES OF AMERICA

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $36.6 million to AT&T ENTERPRISES, LLC for work described as: TNET CONTRACT MPLS CIRCUITS&TNET SERVI Key points: 1. The contract value represents a substantial commitment to maintaining critical network services for the IRS. 2. Competition dynamics for this contract are crucial for ensuring cost-effectiveness in telecommunications. 3. Performance metrics and service level agreements will be key indicators of value for money. 4. This contract falls within the broader context of federal spending on essential IT and communication services. 5. The telecommunications sector is characterized by rapid technological advancements and evolving market prices.

Value Assessment

Rating: good

The contract value of $36.6 million over approximately four years for wired telecommunications services appears reasonable given the scope of supporting a large federal agency like the IRS. Benchmarking against similar large-scale telecommunications contracts awarded to major providers like AT&T would provide a more precise value-for-money assessment. However, the firm-fixed-price structure suggests predictable costs for the government, which is a positive indicator.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. With three bidders, the competition level suggests a healthy market for these services, which typically drives more competitive pricing. The government likely benefited from a range of proposals, allowing for selection of the best technical and price combination.

Taxpayer Impact: Full and open competition generally leads to better pricing for taxpayers by fostering a competitive environment among telecommunications providers.

Public Impact

Taxpayers benefit from reliable and secure communication networks essential for IRS operations. The contract ensures the delivery of wired telecommunications circuits and services across various IRS locations. Geographic impact is likely nationwide, supporting IRS facilities wherever wired connectivity is required. Workforce implications include the need for skilled technicians and network engineers to manage and maintain these services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if future contracts are not competitively re-bid.
Dependence on a single provider for critical infrastructure could pose risks during service disruptions.

Positive Signals

Award to a major telecommunications provider with a proven track record.
Firm-fixed-price contract provides cost certainty.
Full and open competition suggests a competitive award process.

Sector Analysis

The telecommunications industry is a vital sector supporting all government functions. This contract falls under the Wired Telecommunications Carriers industry (NAICS 517110), which includes companies providing broadband internet, voice, and data services over wired networks. Federal spending in this area is substantial, driven by the need for secure, high-capacity networks. Comparable spending benchmarks would involve analyzing other large federal agency contracts for similar network infrastructure and services.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The primary award is to a large telecommunications provider. However, large prime contractors like AT&T often engage small businesses for subcontracting opportunities, which could indirectly benefit the small business ecosystem. Further analysis of subcontracting plans would be needed to confirm the extent of small business involvement.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the IRS or the Department of the Treasury. Accountability measures are embedded in the contract's performance standards and service level agreements. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Information Technology Acquisition Reform Act (FITARA) related spending
IRS IT Modernization initiatives
General Services Administration (GSA) Schedule contracts for telecommunications

Risk Flags

Potential for service disruption
Cybersecurity vulnerabilities
Cost escalation risk if scope changes
Vendor lock-in

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $36.6 million to AT&T ENTERPRISES, LLC. TNET CONTRACT MPLS CIRCUITS&TNET SERVI

Who is the contractor on this award?

The obligated recipient is AT&T ENTERPRISES, LLC.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $36.6 million.

What is the period of performance?

Start: 2011-09-20. End: 2015-09-30.

What is AT&T's track record with federal telecommunications contracts?

AT&T is a major telecommunications provider with extensive experience serving federal agencies. They hold numerous contracts across various departments, providing a wide range of services including wired and wireless communications, network infrastructure, and cybersecurity solutions. Their track record generally includes the ability to deliver large-scale, complex network solutions. However, like any large contractor, they have faced scrutiny on specific contracts regarding performance, pricing, and compliance. A detailed review of their past performance ratings and any significant contract disputes or investigations would be necessary for a comprehensive assessment.

How does the $36.6 million contract value compare to similar federal telecommunications spending?

The $36.6 million contract value for wired telecommunications services over approximately four years is a significant but not extraordinary amount for supporting a federal agency like the IRS. Large agencies require robust and extensive network infrastructure. To benchmark effectively, one would compare this to other multi-year, full-service telecommunications contracts awarded to major carriers for similar-sized agencies or nationwide deployments. For instance, contracts for enterprise-wide network services from agencies like the Department of Defense or the Department of Justice could serve as comparators. The price per circuit or per user, if derivable, would be a more granular metric for comparison.

What are the primary risks associated with this type of telecommunications contract?

Key risks include potential service disruptions due to network outages or cyberattacks, which could impact IRS operations. There's also a risk of cost overruns if the firm-fixed-price contract doesn't adequately account for unforeseen technical challenges or if scope creep occurs without proper change order management. Vendor lock-in is another concern, where the government becomes heavily reliant on a single provider, potentially limiting future flexibility and negotiation power. Ensuring robust security protocols and clear performance metrics are crucial to mitigate these risks.

How effective are firm-fixed-price contracts in managing telecommunications spending?

Firm-fixed-price (FFP) contracts are generally effective for managing spending in predictable service environments like telecommunications, as they establish a ceiling cost for the government. This structure incentivizes the contractor to control costs and manage performance efficiently to maximize profit. For services with well-defined requirements and minimal anticipated changes, FFP provides cost certainty. However, if unforeseen technical issues arise or the scope changes significantly, managing these under an FFP contract can become complex, potentially leading to disputes or the need for costly contract modifications.

What is the historical spending trend for wired telecommunications services at the IRS?

Historical spending on wired telecommunications services at the IRS has likely been substantial and consistent, reflecting the agency's critical need for reliable network connectivity across its numerous offices nationwide. While specific historical figures for this exact contract vehicle are not provided, overall federal spending on telecommunications has been a significant category for decades. Trends often show an increasing demand for higher bandwidth and more sophisticated services, alongside efforts to consolidate contracts and leverage enterprise agreements for better pricing and management. Analyzing past IRS IT budgets and telecommunications procurements would reveal patterns of investment and potential shifts in technology adoption.

Industry Classification

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

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: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Address: 1900 GALLOWS ROAD, VIENNA, VA, 22182

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $74,360,855

Exercised Options: $74,360,855

Current Obligation: $36,574,017

Parent Contract

Parent Award PIID: GS00T07NSD0007

IDV Type: IDC

Timeline