VA Spends $35.7M on AT&T Routers for Region 2, Raising Questions on Value and Competition

Contract Overview

Contract Amount: $35,714,347 ($35.7M)

Contractor: AT&T Enterprises, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2011-09-12

End Date: 2015-11-30

Contract Duration: 1,540 days

Daily Burn Rate: $23.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: LEASE OF 88 ASR ROUTERS FOR VA REGION 2

Place of Performance

Location: KANSAS CITY, JACKSON County, MISSOURI, 64106, UNITED STATES OF AMERICA

State: Missouri Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $35.7 million to AT&T ENTERPRISES, LLC for work described as: LEASE OF 88 ASR ROUTERS FOR VA REGION 2 Key points: 1. Significant expenditure on telecommunications equipment highlights reliance on established providers. 2. The contract's duration and fixed price may limit flexibility and potential cost savings. 3. Limited information on performance metrics and alternative solutions warrants further scrutiny. 4. The sector is characterized by rapid technological advancements, potentially impacting the long-term value of leased equipment.

Value Assessment

Rating: questionable

The total award amount of $35.7 million for 88 routers over approximately four years suggests a substantial per-unit cost. Without specific performance benchmarks or comparisons to similar leased equipment contracts, it is difficult to definitively assess value for money.

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. However, the specific details of the bidding process and the number of proposals received are not provided, making it hard to gauge the intensity of competition and its impact on price discovery.

Taxpayer Impact: While competition was reportedly full and open, the substantial cost and long-term nature of the lease warrant scrutiny to ensure taxpayers received the best possible value.

Public Impact

Veterans in Region 2 may experience improved network reliability due to new equipment. Taxpayers are funding a significant lease agreement for essential telecommunications infrastructure. The contract's fixed-price nature could lead to overpayment if market prices for similar equipment decrease. Reliance on a single vendor for a large number of routers could pose a risk if service disruptions occur.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High total contract value
Long contract duration
Lack of detailed performance metrics
Potential for price escalation or missed savings

Positive Signals

Awarded under full and open competition
Use of fixed-price contract type can provide cost certainty

Sector Analysis

The Wired Telecommunications Carriers sector is critical for government operations, providing essential network services. Spending benchmarks in this area can vary widely based on technology, scale, and contract terms. This lease represents a significant investment within this sector.

Small Business Impact

The data does not indicate whether small businesses were involved in this contract, either as prime contractors or subcontractors. Further investigation would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight of this lease agreement by the Department of Veterans Affairs is crucial to ensure that the equipment is maintained, performs as expected, and that the terms of the contract are being met by AT&T Enterprises, LLC.

Related Government Programs

Wired Telecommunications Carriers
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

High total contract value
Long contract duration (1540 days)
Lack of detailed performance metrics
Potential for vendor lock-in
Limited information on competitive landscape details

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $35.7 million to AT&T ENTERPRISES, LLC. LEASE OF 88 ASR ROUTERS FOR VA REGION 2

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 $35.7 million.

What is the period of performance?

Start: 2011-09-12. End: 2015-11-30.

What was the specific justification for selecting a lease agreement over purchasing the routers outright, and how does the total cost of this lease compare to the estimated cost of ownership over the

The rationale behind choosing a lease over a purchase is not detailed in the provided data. Typically, leases are chosen for flexibility, avoiding large upfront capital expenditures, or when technology obsolescence is a significant concern. A comparative cost analysis, factoring in maintenance, upgrades, and residual value, would be necessary to determine if leasing was indeed the more cost-effective option for the VA over the 1540-day duration.

Given the full and open competition, what was the range of bids received, and how did AT&T Enterprises, LLC's bid compare to others in terms of price and proposed technical specifications?

The provided data confirms 'FULL AND OPEN COMPETITION' but lacks specifics on the bidding process, such as the number of bids received or the price range. Understanding this would clarify the competitive landscape and whether the VA secured a favorable price. Without this, it's difficult to assess if the winning bid truly represented the best value or if other vendors offered superior terms or lower costs.

What performance metrics are being tracked for these leased routers, and how is the VA ensuring that the service provided by AT&T Enterprises, LLC meets the needs of Region 2?

The data does not specify any performance metrics or service level agreements (SLAs) associated with this router lease. Effective oversight requires clear, measurable performance indicators related to uptime, speed, latency, and support response times. The VA needs robust mechanisms to monitor these metrics and hold AT&T accountable for meeting the required service levels to ensure operational effectiveness.

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: 1900 GALLOWS ROAD, VIENNA, VA, 22182

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $36,234,354

Exercised Options: $35,714,347

Current Obligation: $35,714,347

Parent Contract

Parent Award PIID: GS00T07NSD0007

IDV Type: IDC

Timeline