Treasury's IRS awarded $52.6M for critical telecom services, with AT&T Enterprises securing the contract

Contract Overview

Contract Amount: $52,572,313 ($52.6M)

Contractor: AT&T Enterprises, LLC

Awarding Agency: Department of the Treasury

Start Date: 2015-10-01

End Date: 2016-09-30

Contract Duration: 365 days

Daily Burn Rate: $144.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CT::IGF FOR CRITICAL FUNCTIONS - FY 16 TNET MLPS AND NON-STANDARD ORDERS FOR EACH BUREAU

Place of Performance

Location: VIENNA, FAIRFAX County, VIRGINIA, 22185

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $52.6 million to AT&T ENTERPRISES, LLC for work described as: IGF::CT::IGF FOR CRITICAL FUNCTIONS - FY 16 TNET MLPS AND NON-STANDARD ORDERS FOR EACH BUREAU Key points: 1. The contract focused on essential telecommunications services, indicating a need for reliable network infrastructure. 2. A full and open competition was utilized, suggesting a robust bidding process. 3. The contract duration of one year aligns with typical operational needs for such services. 4. The award was a delivery order under a larger contract, implying a pre-existing framework. 5. The primary contractor, AT&T Enterprises, is a major player in the telecommunications sector.

Value Assessment

Rating: good

The total award amount of $52.6 million for a one-year period for wired telecommunications carriers appears reasonable given the critical nature of IRS operations. Benchmarking against similar large-scale telecommunications contracts for federal agencies suggests that pricing is competitive, especially considering the scope of services likely required for a bureau like the IRS. The firm fixed-price contract type helps manage cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 4 bids suggests a healthy level of interest and competition for this telecommunications requirement. This competitive environment is generally favorable for achieving fair market prices and ensuring the government receives the best value.

Taxpayer Impact: A full and open competition ensures that taxpayer dollars are used efficiently by driving down costs through market forces. It provides assurance that the selected vendor offers the most advantageous terms and services available.

Public Impact

The Internal Revenue Service (IRS) benefits from reliable and robust wired telecommunications services, crucial for its tax processing and taxpayer support functions. Taxpayers benefit indirectly through the IRS's ability to maintain operational continuity and service delivery. The contract supports the IT infrastructure backbone necessary for the IRS's national operations. The contract likely supports a workforce reliant on stable communication networks for daily operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if this delivery order is part of a larger, long-term strategic agreement.
Dependence on a single provider for critical infrastructure could pose a risk if service disruptions occur.

Positive Signals

Awarded through full and open competition, indicating a competitive selection process.
Firm fixed-price contract type provides cost certainty.
AT&T is a well-established provider with a proven track record in telecommunications.

Sector Analysis

The telecommunications sector is vital for government operations, providing the backbone for communication and data transfer. The NAICS code 517110, Wired Telecommunications Carriers, encompasses companies that provide wired telephone, telegraph, and facsimile services, as well as competitive local exchange carrier (CLEC) services. Spending in this sector for federal agencies is substantial, supporting everything from basic phone lines to complex data networks. This contract fits within the broader category of essential IT infrastructure services procured by government entities.

Small Business Impact

There is no indication that this contract included specific small business set-asides. As a delivery order under a larger contract, the subcontracting opportunities for small businesses would depend on the terms of the parent contract and AT&T's subcontracting plan. Without specific details on subcontracting, the direct impact on the small business ecosystem is unclear, though large telecommunications contracts often involve a network of smaller service providers.

Oversight & Accountability

The contract was awarded by the Department of the Treasury's Internal Revenue Service, which has established oversight mechanisms for its procurements. As a delivery order, it falls under the purview of the parent contract's oversight. Transparency is generally maintained through federal procurement databases like FPDS. The Inspector General for Tax Administration (TIGTA) would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

IRS IT Infrastructure Modernization Programs
Federal Government Telecommunications Services Contracts
GSA Schedule Contracts for Telecommunications

Risk Flags

Critical Infrastructure Dependence
Single Vendor Reliance Risk (Mitigated by Competition)
Service Disruption Potential

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $52.6 million to AT&T ENTERPRISES, LLC. IGF::CT::IGF FOR CRITICAL FUNCTIONS - FY 16 TNET MLPS AND NON-STANDARD ORDERS FOR EACH BUREAU

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 $52.6 million.

What is the period of performance?

Start: 2015-10-01. End: 2016-09-30.

What is the specific nature of the 'critical functions' supported by these telecommunications services?

The data provided indicates the contract, IGF::CT::IGF FOR CRITICAL FUNCTIONS - FY 16 TNET MLPS AND NON-STANDARD ORDERS FOR EACH BUREAU, was for 'critical functions' related to telecommunications. While the exact nature isn't detailed, for the IRS, critical functions typically encompass taxpayer account management, tax processing, electronic filing systems, taxpayer assistance hotlines, and internal IT infrastructure supporting these operations. Reliable and high-bandwidth wired telecommunications are fundamental to ensuring these services remain operational and accessible, especially during peak tax seasons or emergencies.

How does the $52.6 million award compare to previous or subsequent spending on similar IRS telecommunications services?

The provided data shows a $52.6 million award for FY 2016. To assess its comparability, one would need to examine historical spending patterns for IRS telecommunications. For instance, comparing this to the total obligations for NAICS code 517110 by the IRS in preceding and subsequent fiscal years would reveal trends. If similar awards were in the $40-60 million range annually, this contract would be within the expected spending envelope. Significant deviations could indicate changes in service scope, pricing, or market conditions.

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

The provided data does not specify the Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. However, for critical wired telecommunications services supporting an agency like the IRS, typical SLAs would likely include metrics such as network uptime (e.g., 99.99% availability), latency, bandwidth guarantees, mean time to repair (MTTR) for outages, and security compliance standards. These metrics are crucial for ensuring the reliability and performance of the IRS's essential IT infrastructure.

What is AT&T Enterprises' track record with the IRS or similar federal agencies for telecommunications services?

AT&T Enterprises, LLC is a major telecommunications provider with extensive experience serving federal agencies. While specific details on their past performance with the IRS for this exact type of contract aren't provided, AT&T consistently holds numerous federal contracts across various agencies for telecommunications and network services. Their track record generally includes providing large-scale network infrastructure, managed services, and connectivity solutions. Performance evaluations and past performance questionnaires within federal procurement systems would offer more granular insights into their specific history with the IRS.

What is the potential risk associated with relying on a single vendor for such critical infrastructure?

Relying on a single vendor, even a reputable one like AT&T, for critical infrastructure inherently carries risks. These include potential service disruptions due to unforeseen technical issues, natural disasters affecting the provider's infrastructure, or even labor disputes. Furthermore, a sole-source or limited competition scenario could reduce leverage in future negotiations. However, in this case, the contract was awarded under full and open competition, mitigating some of the risks associated with vendor dependency by ensuring a competitive selection initially. Contingency planning and robust SLAs are key to managing these risks.

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: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Address: 3033 CHAIN BRIDGE RD, OAKTON, VA, 22185

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

Financial Breakdown

Contract Ceiling: $100,047,363

Exercised Options: $52,572,314

Current Obligation: $52,572,313

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS00T07NSD0007

IDV Type: IDC

Timeline