State Department awards $311M contract for global telecommunications infrastructure upgrades to AT&T

Contract Overview

Contract Amount: $310,933,498 ($310.9M)

Contractor: AT&T Technical Services Company, Inc

Awarding Agency: Department of State

Start Date: 2021-01-18

End Date: 2026-01-18

Contract Duration: 1,826 days

Daily Burn Rate: $170.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PROCUREMENT AND INSTALLATION NEW TELEPHONE SYSTEMS, WI-FI, CABLING, ETC. HARDWARE, SOFTWARE, SUPPORT AND OTHER ASSOCIATED SERVICES AT EXISTING FOREIGN POSTS AND NEW POSTS.

Place of Performance

Location: OAKTON, FAIRFAX County, VIRGINIA, 22124

State: Virginia Government Spending

Plain-Language Summary

Department of State obligated $310.9 million to AT&T TECHNICAL SERVICES COMPANY, INC for work described as: PROCUREMENT AND INSTALLATION NEW TELEPHONE SYSTEMS, WI-FI, CABLING, ETC. HARDWARE, SOFTWARE, SUPPORT AND OTHER ASSOCIATED SERVICES AT EXISTING FOREIGN POSTS AND NEW POSTS. Key points: 1. Contract focuses on modernizing communication systems at U.S. embassies worldwide. 2. AT&T secured the award through full and open competition. 3. The contract spans five years, indicating a long-term need for these services. 4. Performance is rated as 'satisfactory' (ST), suggesting a need for monitoring. 5. The scope includes hardware, software, installation, and ongoing support. 6. This award represents a significant investment in diplomatic infrastructure.

Value Assessment

Rating: fair

The total contract value of $311 million over five years averages to approximately $62 million annually. Benchmarking this against similar large-scale telecommunications infrastructure projects for government entities is challenging without more granular data on the specific services and geographic scope. However, the firm-fixed-price structure suggests that the government has a defined budget and the contractor bears the risk of cost overruns. The 'satisfactory' performance rating indicates that while not problematic, there is room for improvement and close oversight is warranted to ensure optimal value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of four bids suggests a reasonably competitive environment. Full and open competition is generally expected to yield the best prices and terms for the government by allowing a wide range of qualified contractors to participate and present their best offers.

Taxpayer Impact: Taxpayers benefit from the competitive process, which aims to ensure that the government receives the most advantageous pricing and terms possible for essential telecommunications services.

Public Impact

U.S. Department of State personnel at foreign posts will benefit from improved and reliable communication systems. Services delivered include the installation and maintenance of telephone systems, Wi-Fi, and cabling. The geographic impact is global, covering existing and new foreign posts. This contract supports the operational readiness and security of U.S. diplomatic missions abroad. It ensures continuity of essential communication services for national security and diplomatic functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Performance rating of 'satisfactory' requires diligent monitoring to ensure continued service quality and value.
The long duration of the contract necessitates ongoing evaluation of technological relevance and cost-effectiveness.
Potential for vendor lock-in with integrated hardware and software solutions over the contract term.

Positive Signals

Awarded through full and open competition, maximizing potential for competitive pricing.
Firm-fixed-price contract structure provides cost certainty for the government.
AT&T's extensive experience in global telecommunications infrastructure is a positive signal for successful execution.

Sector Analysis

This contract falls within the telecommunications sector, specifically focusing on wired telecommunications carriers. The market for global government telecommunications infrastructure is characterized by a few large, established providers capable of undertaking complex, worldwide deployments. The Department of State's spending in this area is critical for maintaining diplomatic operations and national security interests abroad. Comparable spending benchmarks are difficult to ascertain without specific project details, but large-scale infrastructure projects for government agencies often run into hundreds of millions of dollars.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, and there is no explicit mention of subcontracting requirements for small businesses. Given the scale and nature of the work, which involves complex global telecommunications infrastructure, it is likely that the prime contractor, AT&T, will utilize its own resources or those of large partners. This may limit direct opportunities for small businesses to participate in this specific contract, though they may benefit indirectly through the broader telecommunications ecosystem.

Oversight & Accountability

Oversight for this contract is primarily managed by the Department of State, which is also the contracting agency. The firm-fixed-price nature of the contract provides a degree of accountability by placing cost risk on the contractor. Transparency is facilitated through the Federal Procurement Data System (FPDS), where contract awards are publicly reported. Specific Inspector General jurisdiction would typically fall under the Department of State's Office of Inspector General, responsible for auditing and investigating waste, fraud, and abuse.

Related Government Programs

Worldwide Diplomatic Telecommunications Services
Global Communications Infrastructure Modernization
Embassy Security and Technology Upgrades
Federal Information Technology Contracts
Department of State Procurement

Risk Flags

Performance rating requires monitoring
Potential for technological obsolescence over contract term
Geopolitical risks impacting service delivery

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $310.9 million to AT&T TECHNICAL SERVICES COMPANY, INC. PROCUREMENT AND INSTALLATION NEW TELEPHONE SYSTEMS, WI-FI, CABLING, ETC. HARDWARE, SOFTWARE, SUPPORT AND OTHER ASSOCIATED SERVICES AT EXISTING FOREIGN POSTS AND NEW POSTS.

Who is the contractor on this award?

The obligated recipient is AT&T TECHNICAL SERVICES COMPANY, INC.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $310.9 million.

What is the period of performance?

Start: 2021-01-18. End: 2026-01-18.

What is AT&T's track record with similar large-scale government telecommunications contracts?

AT&T has a long history of providing telecommunications services to the U.S. government, including extensive work with the Department of Defense and other civilian agencies. They have been involved in numerous large-scale projects, including network modernization, secure communications, and global connectivity solutions. Their experience often includes managing complex deployments across multiple geographic locations and adhering to stringent security and performance requirements. While specific contract performance details are often proprietary or require deep dives into individual contract histories, AT&T's consistent presence as a major government contractor suggests a generally accepted capability to execute such programs. However, past performance ratings on specific contracts, like the 'satisfactory' rating on this one, warrant careful review.

How does the $311 million contract value compare to historical spending on similar State Department telecommunications infrastructure?

The $311 million total contract value over five years represents a significant, but not unprecedented, investment for the Department of State's global telecommunications needs. Historically, the State Department has allocated substantial funds towards modernizing its worldwide communication systems to ensure secure and reliable operations for diplomatic personnel. While precise year-over-year comparisons are complex due to varying project scopes and technological advancements, this award aligns with the department's ongoing commitment to maintaining and upgrading its critical infrastructure. The amount reflects the scale of deploying and maintaining advanced telecommunications across numerous international locations, encompassing hardware, software, installation, and support services.

What are the primary risks associated with a five-year contract for global telecommunications infrastructure?

Key risks for a five-year contract of this nature include technological obsolescence, where the deployed systems may become outdated before the contract concludes, necessitating costly upgrades or workarounds. Another significant risk is vendor lock-in, where the integrated nature of the hardware and software solutions makes it difficult and expensive to switch providers later. Performance degradation over time, security vulnerabilities, and geopolitical instability affecting service delivery in certain regions also pose risks. Furthermore, the firm-fixed-price structure, while offering cost certainty, can lead to the contractor cutting corners on quality or service if not adequately monitored, impacting the overall value and reliability of the infrastructure.

How effective is the 'satisfactory' performance rating in ensuring program effectiveness?

A 'satisfactory' performance rating indicates that the contractor is meeting the minimum requirements of the contract but may not be exceeding expectations or demonstrating exceptional performance. While not a cause for immediate alarm, it suggests that the program's effectiveness relies heavily on diligent oversight and proactive management by the Department of State. This rating necessitates close monitoring of service delivery, issue resolution times, and adherence to performance metrics. It implies that there is potential for improvement and that the government should actively engage with the contractor to address any shortcomings and ensure that the telecommunications infrastructure effectively supports diplomatic operations throughout the contract's duration.

What are the implications of AT&T's incumbency or prior experience in providing these services at foreign posts?

AT&T's likely incumbency or extensive prior experience in providing telecommunications services at foreign posts is a double-edged sword. On one hand, it suggests a deep understanding of the unique challenges and requirements of operating in diverse international environments, potentially leading to smoother execution and fewer unforeseen issues. Their established relationships and logistical capabilities could streamline deployment and support. On the other hand, incumbency can sometimes lead to complacency or less aggressive pricing compared to a new entrant. The 'satisfactory' performance rating, if this is a follow-on contract, might indicate areas where previous performance could have been stronger, necessitating careful contract management to ensure continued improvement and value.

How does the firm-fixed-price contract type influence cost control and value for money?

The firm-fixed-price (FFP) contract type is designed to provide the government with cost certainty, as the price is set and generally not subject to adjustment based on the contractor's actual costs. This shifts the risk of cost overruns to the contractor, incentivizing them to manage their expenses efficiently. For value for money, FFP can be advantageous when the scope of work is well-defined and unlikely to change significantly. It encourages the contractor to be efficient and innovative in controlling costs. However, if the scope is not perfectly defined or if unforeseen issues arise, the contractor might be tempted to reduce quality or service levels to maintain profitability, making robust government oversight crucial to ensure that the fixed price truly represents good value.

Industry Classification

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

Product/Service Code: IT AND TELECOM - COMPUTE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 19AQMM20Q0024

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2355 DULLES CORNER BLVD # 100, HERNDON, VA, 20171

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

Financial Breakdown

Contract Ceiling: $311,064,526

Exercised Options: $310,933,498

Current Obligation: $310,933,498

Actual Outlays: $49,803,890

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q12NSD0004

IDV Type: IDC

Timeline