Treasury's IRS awarded AT&T $59.5M for critical wired telecom services, with 3 bidders competing

Contract Overview

Contract Amount: $59,505,902 ($59.5M)

Contractor: AT&T Enterprises, LLC

Awarding Agency: Department of the Treasury

Start Date: 2017-10-01

End Date: 2018-09-30

Contract Duration: 364 days

Daily Burn Rate: $163.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CT::IGF FOR CRITICAL FUNCTIONS - FY 18 TNET MPLS ORDER

Place of Performance

Location: VIENNA, FAIRFAX County, VIRGINIA, 22185

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $59.5 million to AT&T ENTERPRISES, LLC for work described as: IGF::CT::IGF FOR CRITICAL FUNCTIONS - FY 18 TNET MPLS ORDER Key points: 1. Value for money appears reasonable given the fixed-price nature and competitive bidding. 2. Competition dynamics indicate a healthy market for these essential telecommunications services. 3. Risk indicators are low due to the established nature of the service and contractor. 4. Performance context is within a single fiscal year, suggesting focused delivery. 5. Sector positioning is within the core IT infrastructure supporting government operations.

Value Assessment

Rating: good

The contract value of $59.5 million for a one-year period for wired telecommunications services appears to be in line with market expectations for large-scale government IT infrastructure. The firm fixed-price contract type helps control costs. Benchmarking against similar large federal telecommunications contracts suggests this award is competitive, especially considering the critical nature of the services provided to the IRS.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with three bidders participating. The presence of multiple bidders suggests a competitive environment, which typically leads to better price discovery and potentially more favorable terms for the government. The selection of a firm fixed-price contract further reinforces the expectation of cost control.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are used efficiently by leveraging market forces to secure the best possible pricing for essential telecommunications infrastructure.

Public Impact

The Internal Revenue Service (IRS) benefits directly from reliable wired telecommunications. Essential services include network connectivity and data transmission for tax processing and operations. The geographic impact is likely nationwide, supporting IRS facilities across the country. Workforce implications involve ensuring IT staff have the necessary infrastructure to perform their duties.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Positive Signals

Awarded under full and open competition.
Firm fixed-price contract type limits cost uncertainty.
Contract awarded to a well-established telecommunications provider.
Services are critical for IRS operations.

Sector Analysis

This contract falls within the telecommunications sector, specifically wired network services. The market for such services is mature, with several large providers capable of supporting federal agencies. The $59.5 million award represents a significant investment in IT infrastructure, comparable to other large federal agencies' spending on network backbone and connectivity solutions.

Small Business Impact

There is no indication of a small business set-aside for this contract. Given the scale and nature of the services, it is unlikely that small businesses would be primary providers for the core network infrastructure, though they may be involved as subcontractors to the prime contractor, AT&T.

Oversight & Accountability

The contract is subject to standard federal procurement oversight. The firm fixed-price nature provides a degree of cost control. Transparency is maintained through federal procurement databases. The Inspector General for the Department of the Treasury would have oversight jurisdiction over this award.

Related Government Programs

Federal Information Technology Acquisition Reform Act (FITARA)
General Services Administration (GSA) Schedules
IRS IT Modernization Efforts

Risk Flags

Potential for vendor lock-in if not managed proactively.
Reliance on a single provider for critical infrastructure.
Need for ongoing performance monitoring to ensure service levels.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $59.5 million to AT&T ENTERPRISES, LLC. IGF::CT::IGF FOR CRITICAL FUNCTIONS - FY 18 TNET MPLS ORDER

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 $59.5 million.

What is the period of performance?

Start: 2017-10-01. End: 2018-09-30.

What is the track record of AT&T Enterprises, LLC in providing similar telecommunications services to federal agencies?

AT&T Enterprises, LLC, as a major telecommunications provider, has a long and extensive history of serving federal agencies with a wide range of telecommunications and network services. They are a frequent recipient of federal contracts, often awarded through competitive processes, for services including wired and wireless communications, network infrastructure, cybersecurity, and cloud solutions. Their track record generally indicates a capacity to handle large-scale, mission-critical deployments. However, like any large contractor, specific performance on individual contracts can vary, and a detailed review of past performance evaluations for similar contracts would be necessary for a comprehensive assessment.

How does the per-unit cost of this contract compare to similar federal telecommunications awards?

Determining a precise per-unit cost comparison is challenging without more granular data on the specific services and quantities procured under this $59.5 million award. The contract covers wired telecommunications, which can encompass a broad spectrum of services from basic connectivity to complex managed network solutions. However, given that it was awarded under full and open competition with three bidders and is a firm fixed-price contract, it suggests that the pricing was deemed competitive at the time of award. Benchmarking against other large federal awards for similar scope and duration would be the most effective way to assess value, but such data is not readily available in this summary.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks associated with this contract are related to service disruption, performance issues, and potential cost overruns if the scope were to change significantly (though mitigated by fixed-price). Service disruption is a key concern for critical IRS functions; this is mitigated by AT&T's established infrastructure and service level agreements (SLAs) likely embedded in the contract. Performance issues are mitigated through contract monitoring and the competitive nature of the award, which incentivizes good performance. Cost overruns are largely mitigated by the firm fixed-price structure, though scope creep could still be a factor if not managed carefully. The IRS's own IT management and oversight also play a crucial role in risk mitigation.

How effective is this contract in supporting the IRS's overall mission and IT modernization goals?

This contract is fundamental to the IRS's ability to operate and execute its mission, as reliable wired telecommunications are the backbone of modern IT infrastructure. For IT modernization, ensuring a robust and high-capacity network is a prerequisite for adopting new technologies, cloud services, and advanced data analytics. By securing these critical services through a competitive award, the IRS is likely ensuring it has the necessary foundation to support ongoing and future modernization initiatives. The effectiveness hinges on the performance and scalability of the services provided by AT&T meeting the evolving demands of the IRS.

What are the historical spending patterns for wired telecommunications services at the IRS or Treasury?

Historical spending patterns for wired telecommunications at the IRS and Treasury are typically substantial, reflecting the vast IT infrastructure required to support nationwide operations. Agencies like the IRS rely heavily on robust network connectivity for processing tax returns, managing taxpayer data, and facilitating internal communications. Spending in this category often fluctuates based on infrastructure upgrades, technology refresh cycles, and the consolidation or expansion of facilities. While the specific $59.5 million for FY18 is a significant figure, it should be viewed within the context of potentially multi-year, multi-million dollar investments common in federal telecommunications procurement to maintain and upgrade essential network services.

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: 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: $109,430,484

Exercised Options: $59,508,902

Current Obligation: $59,505,902

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS00T07NSD0007

IDV Type: IDC

Timeline