VA's $26.2M AT&T contract for wired telecom services shows fair value with a single award

Contract Overview

Contract Amount: $26,200,389 ($26.2M)

Contractor: AT&T Enterprises, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2015-12-01

End Date: 2017-01-31

Contract Duration: 427 days

Daily Burn Rate: $61.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF - NETWORX VA-16-0004597_REGION 2_AT&T

Place of Performance

Location: NORTH LITTLE ROCK, PULASKI County, ARKANSAS, 72114

State: Arkansas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $26.2 million to AT&T ENTERPRISES, LLC for work described as: IGF::OT::IGF - NETWORX VA-16-0004597_REGION 2_AT&T Key points: 1. The contract was awarded under full and open competition, suggesting a competitive bidding process. 2. The fixed-price contract type helps manage cost certainty for the government. 3. The contract duration of 427 days is relatively short, indicating a focused scope. 4. The award went to AT&T Enterprises, LLC, a major telecommunications provider. 5. The contract falls under the Wired Telecommunications Carriers NAICS code. 6. The contract was awarded as a Delivery Order, suggesting it's part of a larger framework.

Value Assessment

Rating: fair

The total award amount of $26.2 million for approximately 14 months of service appears within a reasonable range for large-scale telecommunications infrastructure. Benchmarking against similar large federal contracts for wired telecommunications services would provide a more precise value assessment. However, given the fixed-price nature and the provider's established market presence, the pricing is likely competitive, though not necessarily the lowest possible.

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 a bid. While the specific number of bidders is not provided, this method generally fosters price discovery and encourages multiple vendors to offer competitive proposals. The government likely received several proposals, leading to a more informed selection process.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices through market forces, ensuring the government obtains services at a more economical rate compared to sole-source or limited competition awards.

Public Impact

The Department of Veterans Affairs benefits from enhanced wired telecommunications infrastructure. This contract supports the delivery of essential communication services for VA operations. The geographic impact is likely concentrated within the regions served by AT&T's network, potentially supporting VA facilities across Arkansas. The contract supports the telecommunications workforce employed by AT&T.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific bidder count limits full assessment of competitive intensity.
Potential for vendor lock-in if this is a foundational network component.
Reliance on a single large provider may limit future flexibility in service options.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
Fixed-price contract type provides cost certainty.
AT&T is a well-established provider with significant infrastructure and experience.

Sector Analysis

This contract falls within the telecommunications sector, specifically wired telecommunications carriers. This industry is characterized by significant infrastructure investment, high barriers to entry, and a few dominant players. Federal spending in this area supports the backbone of government communication networks, ensuring reliable connectivity for various agencies. Comparable spending benchmarks would involve analyzing other large federal contracts for similar network infrastructure and services, often procured through large IDIQs or specific delivery orders.

Small Business Impact

There is no indication that this contract included a small business set-aside. As a large contract awarded to a major telecommunications provider, it is unlikely to have significant direct subcontracting opportunities for small businesses unless specified within the contract's terms. The primary impact is on the large prime contractor, with potential indirect benefits to the small business ecosystem through general economic activity.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Department of Veterans Affairs. Accountability measures are embedded in the firm-fixed-price structure, requiring AT&T to deliver services as specified. Transparency is generally maintained through contract databases like FPDS, though detailed performance metrics may not always be publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Networx Contract
Telecommunications Services
Wired Network Infrastructure
Government Communications

Risk Flags

Potential for vendor lock-in
Limited transparency on specific performance metrics
Reliance on a single large provider

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $26.2 million to AT&T ENTERPRISES, LLC. IGF::OT::IGF - NETWORX VA-16-0004597_REGION 2_AT&T

Who is the contractor on this award?

The obligated recipient is AT&T ENTERPRISES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $26.2 million.

What is the period of performance?

Start: 2015-12-01. End: 2017-01-31.

What was the specific scope of services provided under this AT&T delivery order?

The data indicates this was a delivery order under the broader Networx contract, specifically for wired telecommunications services. While the exact services are not detailed in the provided snippet, typical offerings under such contracts include local and long-distance voice services, data transmission, internet access, and related network management and support. Given the NAICS code 517110 (Wired Telecommunications Carriers), the focus would be on the physical infrastructure and transmission capabilities rather than wireless or satellite services. The contract duration of approximately 14 months suggests a defined period for these services, potentially for upgrading or maintaining existing infrastructure at specific VA locations within Region 2.

How does the $26.2 million award compare to other federal spending on wired telecommunications?

The $26.2 million award represents a significant but not extraordinary investment for a federal agency like the VA over a 14-month period. Federal spending on telecommunications is substantial, often running into billions annually across all agencies. Contracts like this, especially under large umbrella agreements like Networx, are common for procuring essential network services. To provide a precise comparison, one would need to analyze the average award size for similar services (e.g., wired network infrastructure, voice, data) awarded by the VA or other large agencies during the same period (2015-2017). The fact that it's a single delivery order suggests it might be for a specific regional need or upgrade rather than a nationwide overhaul.

What are the key risks associated with this type of contract and vendor?

Key risks include potential over-reliance on a single large vendor, which could limit future flexibility or negotiation leverage. Vendor lock-in is a concern, especially if the services become deeply integrated into VA operations. Performance risks, though mitigated by the fixed-price structure, could still arise if AT&T fails to meet service level agreements, leading to potential disruptions. Pricing risks, while managed by competition, could still exist if the initial market assessment underestimated true costs or if unforeseen technological shifts occur. Finally, cybersecurity risks are inherent in any telecommunications contract, requiring robust security protocols and ongoing monitoring.

What was AT&T's track record with the federal government prior to this award?

Prior to this 2015 award, AT&T had a long and extensive history of contracting with the U.S. federal government. As one of the largest telecommunications providers, AT&T has consistently held numerous contracts across various agencies for a wide range of services, including voice, data, network infrastructure, and mobility solutions. They were a major player in previous government-wide telecommunications vehicles, such as the previous Networx contract. Their track record generally includes significant experience in large-scale deployments and managing complex government requirements, although like any large contractor, specific performance on individual contracts can vary.

How does the fixed-price contract type influence value for money?

The Firm Fixed Price (FFP) contract type is generally considered advantageous for achieving value for money when the scope of work is well-defined and risks are understood. For the VA in this instance, FFP shifts the risk of cost overruns to AT&T. This means the government knows the exact price it will pay for the defined services, enhancing budget predictability. It incentivizes the contractor to control costs efficiently to maintain profitability. While it may not always result in the absolute lowest price compared to cost-reimbursement contracts (which are used for less defined scopes), FFP is often preferred for services like telecommunications where requirements are relatively stable, leading to better overall cost control and reduced administrative burden for the government.

What is the significance of this contract being a 'Delivery Order'?

The designation 'Delivery Order' signifies that this contract is a task order issued under a larger, pre-existing indefinite-delivery, indefinite-quantity (IDIQ) contract or a similar multiple-award framework. In this case, it was likely issued under the Networx contract, which served as a master agreement for telecommunications services. Delivery Orders allow agencies to procure specific quantities of goods or services as needed, within the scope and terms established by the parent IDIQ contract. This approach streamlines procurement, leverages pre-negotiated pricing and terms, and allows for flexibility in ordering services across different locations or for specific projects, like this one for Region 2.

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: 1

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: $26,200,389

Exercised Options: $26,200,389

Current Obligation: $26,200,389

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS00T07NSD0007

IDV Type: IDC

Timeline