DOJ's $15.2M AT&T contract for P2P services awarded via purchase order, raising value-for-money questions

Contract Overview

Contract Amount: $15,227 ($15.2K)

Contractor: AT&T Enterprises, LLC

Awarding Agency: Department of Justice

Start Date: 2024-09-01

End Date: 2025-08-31

Contract Duration: 364 days

Daily Burn Rate: $42/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: P2P SERVICE

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of Justice obligated $15,226.7 to AT&T ENTERPRISES, LLC for work described as: P2P SERVICE Key points: 1. The contract's value-for-money is questionable due to its sole-source nature and lack of competitive bidding. 2. Competition dynamics are absent, as the contract was not competed under SAP, potentially limiting price discovery. 3. Risk indicators include the lack of a competitive process and the potential for overpayment without market benchmarking. 4. Performance context is limited to a one-year duration, suggesting a need for ongoing evaluation of service delivery. 5. Sector positioning is within telecommunications, a mature market where competitive pricing is generally expected. 6. The award method as a purchase order for a significant sum warrants scrutiny regarding procurement efficiency.

Value Assessment

Rating: questionable

The contract's value is difficult to assess without a competitive benchmark. Awarding a $15.2 million contract via a purchase order without competition raises concerns about whether the government secured the best possible price. Comparing this to similar telecommunications reseller contracts awarded through competitive processes would be necessary to determine if the pricing is fair market value. The firm fixed-price nature provides cost certainty but does not guarantee cost efficiency in the absence of competition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a purchase order and explicitly stated as 'NOT COMPETED UNDER SAP.' This indicates a lack of a formal competitive solicitation process. The absence of multiple bidders means there was no opportunity for price negotiation or for AT&T to be challenged on its pricing by competitors. This sole-source approach limits the government's ability to leverage market forces for cost savings.

Taxpayer Impact: Taxpayers may have paid a premium for these telecommunications services due to the lack of competition. Without a bidding process, there is no assurance that the price reflects the most economical option available in the market.

Public Impact

The primary beneficiaries are the Drug Enforcement Administration (DEA) and potentially other Department of Justice components requiring P2P services. The services delivered are telecommunications, likely supporting secure communication networks for law enforcement operations. The geographic impact is likely nationwide, supporting the DEA's operational footprint across the United States. Workforce implications are minimal, as this contract is for services and not directly for personnel augmentation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding increases the risk of paying above-market rates.
Awarding a large sum via purchase order without competition bypasses standard procurement safeguards.
The 'Telecommunications Resellers' NAICS code suggests a market where competition is typically robust.
Limited contract duration (1 year) may indicate a stop-gap measure or an inability to secure longer-term competitive arrangements.

Positive Signals

The contract is firm fixed-price, providing cost certainty for the period of performance.
AT&T is a well-established telecommunications provider with a known track record.
The contract is for a defined period, allowing for re-evaluation of needs and procurement strategy.

Sector Analysis

The telecommunications services sector is characterized by rapid technological advancements and a highly competitive landscape, particularly for resellers. While large providers like AT&T dominate infrastructure, the reseller market often sees dynamic pricing and service innovation. Government spending in this area is substantial, supporting everything from basic voice and data to complex secure networks. Benchmarking against other federal awards for similar telecommunications reseller services, especially those procured competitively, would be crucial for assessing value.

Small Business Impact

This contract does not appear to involve small business set-asides, as indicated by 'sb': false. There is no information provided regarding subcontracting plans. The award to a large prime contractor like AT&T suggests that opportunities for small businesses within this specific contract vehicle are unlikely unless AT&T voluntarily includes them in its supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Justice's internal procurement and financial oversight mechanisms. The Drug Enforcement Administration is the end-user agency. Transparency is limited due to the non-competitive award; details on the justification for not competing are not publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

General Services Administration (GSA) Schedules for telecommunications services
Department of Defense (DoD) telecommunications contracts
Other agency procurements for network and communication services

Risk Flags

Non-competitive award raises value-for-money concerns.
Purchase order for large sum bypasses standard competitive procurement.
Lack of transparency regarding justification for sole-source award.
Potential for above-market pricing due to absence of competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $15,226.7 to AT&T ENTERPRISES, LLC. P2P SERVICE

Who is the contractor on this award?

The obligated recipient is AT&T ENTERPRISES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Justice (Drug Enforcement Administration).

What is the total obligated amount?

The obligated amount is $15,226.7.

What is the period of performance?

Start: 2024-09-01. End: 2025-08-31.

What is the specific justification for awarding this contract on a sole-source basis without competition?

The provided data indicates the contract was 'NOT COMPETED UNDER SAP' and awarded as a 'PURCHASE ORDER'. This suggests it may have been procured under simplified acquisition procedures or potentially justified under specific sole-source exceptions (e.g., urgent need, only one responsible source). However, without explicit documentation detailing the justification (such as a Justification and Approval - J&A document), it is impossible to definitively state the reason. The lack of competition raises concerns about whether the government explored all available options to secure the best value, as competitive processes are generally preferred to ensure fair pricing and market responsiveness.

How does the $15.2 million contract value compare to similar P2P services procured by the DEA or other DOJ components?

Direct comparison is challenging without knowing the exact scope and service level agreements (SLAs) of the P2P services. However, $15.2 million for a one-year contract for telecommunications reseller services is a significant amount. If this contract was awarded non-competitively, it is plausible that the price may be higher than what could be achieved through a competitive solicitation. Benchmarking against similar contracts awarded by agencies like GSA or other large federal entities through competitive means would be necessary. For instance, GSA's telecommunications schedules often provide pre-negotiated rates that can offer better value than sole-source awards, especially for standard services.

What are the potential risks associated with awarding a large telecommunications contract without competition?

The primary risk is financial: the government may be overpaying for services compared to market rates or what could be obtained through competition. There's also a risk of suboptimal service delivery if the contractor faces no pressure to innovate or improve. Furthermore, a lack of competition can stifle market development and reduce future options for the government. Reliance on a single provider without competitive validation can also pose a strategic risk if that provider's services become unavailable or their pricing escalates significantly in subsequent years.

What is AT&T's track record with the federal government, particularly for similar telecommunications services?

AT&T is a major telecommunications provider with extensive experience serving the federal government across various agencies and contract types. They hold numerous contracts, including those awarded through GSA schedules and direct solicitations. Their track record generally includes providing a wide range of services, from basic connectivity to complex network solutions. However, like any large contractor, specific contract performance can vary. Evaluating AT&T's performance on past DOJ or DEA contracts, particularly regarding service delivery, responsiveness, and pricing, would provide a more granular understanding of their suitability and reliability for this specific P2P service requirement.

What does the 'Telecommunications Resellers' NAICS code (517121) imply about the market and potential for competition?

The NAICS code 517121, 'Telecommunications Resellers,' signifies companies that provide telecommunications services to others but do not own the network infrastructure. They typically purchase access and capacity from network owners and resell it to end-users. This segment of the market is often characterized by competitive pricing, as resellers differentiate themselves through service, bundling, and customer support rather than infrastructure ownership. The existence of this code and the nature of the business imply that a competitive market likely exists, making the sole-source award for this contract potentially less justifiable from a value-for-money perspective.

Given the one-year duration, how might this impact future procurement strategies for these P2P services?

The one-year duration (with a potential for extensions, though not specified here) suggests this might be an interim solution or a contract structured for frequent re-evaluation. This short-term nature allows the DEA to reassess its needs and the market landscape annually. It provides an opportunity to potentially transition to a more competitively procured contract in the future, perhaps a longer-term agreement or a task order under a broader telecommunications vehicle. However, if the agency continues to award similar contracts non-competitively year after year, the short duration simply perpetuates the cycle of limited competition and potential value concerns.

Industry Classification

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

Product/Service Code: IT AND TELECOM - NETWORK

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Tyto Athene, LLC

Address: 3303 CHAIN BRIDGE RD, VIENNA, 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: $15,227

Exercised Options: $15,227

Current Obligation: $15,227

Actual Outlays: $15,227

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline