USDA awards AT&T $155M for Wired Telecommunications Carriers, ending 2026

Contract Overview

Contract Amount: $155,297,859 ($155.3M)

Contractor: AT&T Enterprises, LLC

Awarding Agency: Department of Agriculture

Start Date: 2023-09-11

End Date: 2026-09-30

Contract Duration: 1,115 days

Daily Burn Rate: $139.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: USDA DATA AND VOICE SERVICES

Place of Performance

Location: FORT COLLINS, LARIMER County, COLORADO, 80526

State: Colorado Government Spending

Plain-Language Summary

Department of Agriculture obligated $155.3 million to AT&T ENTERPRISES, LLC for work described as: USDA DATA AND VOICE SERVICES Key points: 1. Significant contract value of $155.3M over 3 years. 2. Sole-source award to AT&T raises competition concerns. 3. Potential for overpayment due to lack of competitive bidding. 4. Telecommunications services are critical for agency operations.

Value Assessment

Rating: questionable

The contract value of $155.3M for a 3-year term appears high without competitive benchmarking. The lack of competition makes it difficult to assess if the pricing is fair and reasonable compared to market rates for similar telecommunications services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning AT&T was the only vendor considered. This significantly limits price discovery and likely results in higher costs for taxpayers compared to a fully competed procurement.

Taxpayer Impact: The sole-source nature of this award means taxpayers may be paying a premium for these essential telecommunications services, as competitive pressures were absent.

Public Impact

Essential communication services for USDA operations are secured. Taxpayers may be overpaying due to the lack of competition. Reliance on a single provider could pose future risks if service issues arise.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
High contract value
Lack of competition
Potential for overpayment

Positive Signals

Secures critical telecommunications services
Long-term contract provides stability

Sector Analysis

The telecommunications sector is highly competitive, with numerous providers offering wired services. Benchmarks for similar large-scale contracts typically involve competitive bidding to ensure cost-effectiveness. This award deviates from that norm.

Small Business Impact

This contract does not appear to include provisions for small business participation. The sole-source nature limits opportunities for small businesses to compete for these telecommunications services.

Oversight & Accountability

The sole-source justification for this significant contract should be thoroughly reviewed by oversight bodies to ensure it was warranted and that taxpayer funds are being used efficiently.

Related Government Programs

Wired Telecommunications Carriers
Department of Agriculture Contracting
Office of the Chief Financial Officer Programs

Risk Flags

Lack of competition
Potential for overpayment
Limited oversight on sole-source justification
No small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $155.3 million to AT&T ENTERPRISES, LLC. USDA DATA AND VOICE SERVICES

Who is the contractor on this award?

The obligated recipient is AT&T ENTERPRISES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Office of the Chief Financial Officer).

What is the total obligated amount?

The obligated amount is $155.3 million.

What is the period of performance?

Start: 2023-09-11. End: 2026-09-30.

What is the justification for awarding this substantial contract on a sole-source basis instead of seeking competitive bids?

The justification for a sole-source award typically involves circumstances where only one responsible source can provide the required supplies or services. This could be due to unique capabilities, proprietary technology, or urgent, unforeseen needs. Without specific documentation from the USDA, it's impossible to confirm the exact reason, but such justifications are subject to strict federal acquisition regulations and require strong evidence.

How does the $155M price tag compare to industry benchmarks for similar telecommunications services procured competitively?

Without a competitive bidding process, it is challenging to establish an accurate benchmark. However, industry standards suggest that sole-source contracts often result in prices 10-30% higher than competitively procured ones. A detailed analysis comparing the service scope, SLAs, and pricing structure to publicly available data or similar agency contracts awarded competitively would be needed for a precise comparison.

What are the potential risks associated with relying on AT&T for all USDA's wired telecommunications needs for the next three years?

The primary risks include potential price escalation in future renewals, reduced service innovation due to lack of competitive pressure, and vendor lock-in. If AT&T experiences service disruptions or changes its business strategy, the USDA could face significant operational challenges. Furthermore, the absence of competition limits the USDA's leverage to negotiate better terms or service improvements.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - NETWORK

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 12314423R0015

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Tyto Athene, LLC

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

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

Financial Breakdown

Contract Ceiling: $258,628,017

Exercised Options: $234,122,115

Current Obligation: $155,297,859

Actual Outlays: $145,257,022

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline