Treasury's IRS renews $28.9M TNET MPLS circuits contract with AT&T, awarded via full and open competition

Contract Overview

Contract Amount: $28,893,466 ($28.9M)

Contractor: AT&T Enterprises, LLC

Awarding Agency: Department of the Treasury

Start Date: 2012-10-01

End Date: 2013-09-30

Contract Duration: 364 days

Daily Burn Rate: $79.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CT::IGF CRITICAL FUNCTION: FY13 RENEWAL FOR TNET CONTRACT MPLS CIRCUITS&SERVICES WHICH REPLACES FY12 WR 0108.

Place of Performance

Location: VIENNA, FAIRFAX County, VIRGINIA, 22182

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $28.9 million to AT&T ENTERPRISES, LLC for work described as: IGF::CT::IGF CRITICAL FUNCTION: FY13 RENEWAL FOR TNET CONTRACT MPLS CIRCUITS&SERVICES WHICH REPLACES FY12 WR 0108. Key points: 1. Contract focuses on critical network infrastructure for the IRS, indicating essential service provision. 2. Full and open competition suggests a potentially competitive bidding process, though specific bidder numbers are limited. 3. The contract's duration of one year aligns with typical renewal cycles for telecommunications services. 4. Fixed-price contract type helps mitigate cost overrun risks for the government. 5. The award to AT&T, a major telecommunications provider, places this within a sector dominated by large, established firms. 6. The specific service (MPLS circuits) is a foundational element of modern network connectivity.

Value Assessment

Rating: good

The contract value of $28.9 million for a one-year term for wired telecommunications services appears within a reasonable range for enterprise-level network infrastructure. Benchmarking against similar large-scale telecommunications contracts awarded by federal agencies would provide a more precise value-for-money assessment. The fixed-price nature of the contract is a positive indicator for cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. However, with only 3 bidders, the level of competition might be considered moderate rather than robust. This level of competition is generally sufficient to drive reasonable pricing, but a higher number of bidders could potentially lead to more aggressive pricing.

Taxpayer Impact: Full and open competition, even with a moderate number of bidders, is beneficial for taxpayers as it encourages competitive pricing and ensures that the government is not locked into a single provider without exploring alternatives.

Public Impact

The Internal Revenue Service (IRS) benefits from reliable network connectivity, crucial for its tax processing and taxpayer services. Taxpayer data security and accessibility are supported by the underlying network infrastructure. Employees across the IRS will utilize these services for daily operations, impacting workforce productivity. The geographic impact is nationwide, supporting IRS operations across all its facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if renewal cycles are consistently awarded to the same provider without re-competition.
Dependence on a single vendor for critical network infrastructure could pose a risk if service levels degrade.

Positive Signals

Awarded through full and open competition, indicating an effort to explore market options.
Fixed-price contract type provides cost certainty.
AT&T is a well-established provider with a track record in federal telecommunications.

Sector Analysis

This contract falls within the telecommunications sector, specifically wired telecommunications carriers. This industry is characterized by high infrastructure costs, significant regulatory oversight, and a market dominated by a few large, established players. Federal spending in this area supports the backbone of government operations, ensuring connectivity for various agencies. Comparable spending benchmarks would involve looking at other large federal contracts for similar MPLS circuits and network services.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the nature of large-scale telecommunications infrastructure, it is unlikely that small businesses would be primary bidders or subcontractors for the core service provision. The focus is on established providers capable of delivering robust network solutions.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Treasury's Inspector General, with specific program management and performance monitoring handled by the IRS's IT and procurement divisions. Transparency is generally maintained through contract award databases like FPDS. Accountability is tied to the terms of the firm fixed-price contract and service level agreements.

Related Government Programs

Federal Telecommunications Services (FTS) contracts
Network Infrastructure Services
IRS IT Modernization Efforts
Government Wide Acquisition Contracts (GWACs) for IT services

Risk Flags

Potential for vendor lock-in
Dependence on single provider for critical infrastructure
Cybersecurity risks inherent in telecommunications networks

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $28.9 million to AT&T ENTERPRISES, LLC. IGF::CT::IGF CRITICAL FUNCTION: FY13 RENEWAL FOR TNET CONTRACT MPLS CIRCUITS&SERVICES WHICH REPLACES FY12 WR 0108.

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 $28.9 million.

What is the period of performance?

Start: 2012-10-01. End: 2013-09-30.

What is the historical spending trend for TNET MPLS circuits and services for the IRS?

Historical spending data for TNET MPLS circuits and services for the IRS would reveal patterns of investment in network infrastructure. Analyzing past contract values, durations, and awarded vendors can indicate whether spending has been consistent, increasing, or decreasing. For instance, if this $28.9 million renewal represents a significant increase or decrease from previous years, it might signal a change in the IRS's network strategy, an expansion or contraction of services, or shifts in market pricing. Understanding these trends is crucial for forecasting future budget needs and assessing the long-term value proposition of these services.

How does the per-unit cost of these MPLS circuits compare to similar federal contracts?

A detailed comparison of the per-unit cost for these MPLS circuits against similar federal contracts is essential for assessing value for money. This would involve identifying the specific types of circuits (e.g., bandwidth, speed, geographic reach) and their associated costs in other agency contracts. If the IRS's contract with AT&T shows significantly higher per-unit costs, it could indicate less competitive pricing, unique service requirements, or less favorable contract terms. Conversely, costs in line with or below market benchmarks would suggest a good deal for taxpayers. Without specific per-unit data and comparable contract details, a definitive assessment is challenging.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

The key performance indicators (KPIs) and service level agreements (SLAs) are critical for evaluating the performance and reliability of the MPLS circuits and services provided by AT&T. These metrics typically include uptime guarantees, latency thresholds, packet loss rates, and response times for issue resolution. The contract's success hinges on AT&T's adherence to these SLAs. Monitoring these KPIs allows the IRS to ensure it is receiving the contracted level of service, identify potential performance issues early, and hold the vendor accountable. A review of past performance against these metrics would provide insight into AT&T's reliability for this specific contract.

What is AT&T's track record with the IRS and other federal agencies for similar telecommunications services?

AT&T's track record with the IRS and other federal agencies for similar telecommunications services is a significant factor in assessing contractor reliability and performance. Examining past contracts, including their value, duration, and any documented performance issues or successes, provides valuable context. Positive performance history, such as consistent adherence to SLAs and successful delivery of critical network services, suggests a lower risk for this renewal. Conversely, a history of significant performance problems, contract disputes, or unmet SLAs would raise concerns about the continued award of essential services to AT&T.

What are the potential risks associated with relying on AT&T for critical IRS network infrastructure?

Potential risks associated with relying on AT&T for critical IRS network infrastructure include service disruptions due to technical failures, cyber threats, or natural disasters. Vendor lock-in is another concern, where the IRS might become overly dependent on AT&T, potentially limiting future flexibility or negotiation power. Furthermore, changes in AT&T's business strategy, financial stability, or regulatory compliance could indirectly impact service delivery. The concentration of critical infrastructure with a single provider also heightens the impact of any single point of failure. Mitigation strategies often involve robust SLAs, contingency planning, and periodic market re-evaluation.

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, 11

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $65,177,098

Exercised Options: $65,177,098

Current Obligation: $28,893,466

Parent Contract

Parent Award PIID: GS00T07NSD0007

IDV Type: IDC

Timeline