VA awards AT&T $1.26B for Enterprise Data Network Services, with 2.1K days duration

Contract Overview

Contract Amount: $1,255,523,993 ($1.3B)

Contractor: AT&T Enterprises, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2020-09-30

End Date: 2026-09-30

Contract Duration: 2,191 days

Daily Burn Rate: $573.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: IT

Official Description: ENTERPRISE DATA NETWORK SERVICES CARRIER B

Place of Performance

Location: AUSTIN, TRAVIS County, TEXAS, 78744

State: Texas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $1.26 billion to AT&T ENTERPRISES, LLC for work described as: ENTERPRISE DATA NETWORK SERVICES CARRIER B Key points: 1. Contract value represents significant investment in critical network infrastructure. 2. Competition was full and open, suggesting potential for competitive pricing. 3. Contract duration of nearly 6 years indicates a long-term strategic need. 4. Fixed Price with Economic Price Adjustment (FPEPA) contract type introduces some inflation risk. 5. The primary contractor, AT&T, is a major player in telecommunications. 6. This contract supports essential IT services for the Department of Veterans Affairs.

Value Assessment

Rating: good

The total contract value of $1.26 billion over approximately 6 years suggests a substantial investment in network services. Benchmarking against similar large-scale enterprise network contracts is challenging without more specific service details, but the per-year average of roughly $210 million indicates a significant commitment. The FPEPA pricing structure allows for adjustments based on economic factors, which could lead to cost fluctuations over the contract's life. While the overall value is high, the competitive nature of the award is a positive indicator for value.

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. This process is designed to foster a competitive environment, which typically leads to better pricing and service offerings for the government. The fact that it was competed broadly suggests that the VA sought the best possible solution and price from the market.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces and ensuring that the government receives competitive pricing for essential services.

Public Impact

Veterans will benefit from improved access to VA services through a more robust and reliable network. The contract ensures the delivery of essential data network services, including wired telecommunications. Services are likely to have a nationwide impact, supporting VA facilities across the country. The contract supports jobs within the telecommunications and IT sectors, particularly with a major provider like AT&T.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clauses can lead to cost increases beyond initial projections.
Long contract durations can sometimes reduce flexibility to adopt newer, more cost-effective technologies if they emerge mid-contract.
Reliance on a single large carrier for critical infrastructure presents a potential single point of failure risk, though redundancy measures are likely in place.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that likely secured favorable terms.
The contractor, AT&T, is a well-established telecommunications provider with extensive experience in large-scale network deployments.
The contract duration indicates a strategic commitment to ensuring stable and reliable network services for the VA.
The fixed-price component provides a baseline cost certainty for a significant portion of the contract value.

Sector Analysis

This contract falls within the Wired Telecommunications Carriers industry, a sector characterized by large incumbents and significant infrastructure investments. The market is highly competitive, with major players like AT&T, Verizon, and Lumen Technologies vying for large government and enterprise contracts. Spending in this sector for federal agencies is substantial, covering everything from basic connectivity to complex managed network solutions. The VA's need for enterprise data network services is a critical component of its IT infrastructure, supporting its mission to provide healthcare and benefits to veterans.

Small Business Impact

There is no explicit indication of small business set-asides for this contract. However, large prime contracts often include subcontracting requirements, which can provide opportunities for small businesses to participate in delivering components of the overall service. The extent to which AT&T utilizes small businesses for subcontracting will determine the direct impact on the small business ecosystem for this specific award.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs' contracting officers and program managers. The contract type (FPEPA) may require specific monitoring of economic indicators to manage price adjustments. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General involvement would be triggered by allegations of fraud, waste, or abuse.

Related Government Programs

General Services Administration (GSA) IT Schedule contracts
Department of Defense (DoD) Enterprise IT contracts
Federal Civilian Agency Network Modernization Programs
Telecommunications Services for Federal Agencies

Risk Flags

Potential for cost overruns due to Economic Price Adjustment clauses.
Long contract duration may limit adoption of future technologies.
Dependence on a single large provider for critical infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $1.26 billion to AT&T ENTERPRISES, LLC. ENTERPRISE DATA NETWORK SERVICES CARRIER B

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 $1.26 billion.

What is the period of performance?

Start: 2020-09-30. End: 2026-09-30.

What is the historical spending pattern for enterprise data network services at the VA?

Analyzing historical spending for enterprise data network services at the VA is crucial for understanding trends and establishing benchmarks. While specific historical data for this exact contract vehicle is not provided, the VA, like other large federal agencies, has consistently invested significant sums in maintaining and upgrading its IT infrastructure, including network services. Past contracts for similar services would likely show a trend of increasing costs due to technological advancements and inflation, but also efforts to consolidate and streamline services for efficiency. The VA's transition to modern IT systems and cloud-based solutions may have influenced spending patterns, potentially shifting focus from traditional wired services to more integrated solutions. Understanding the VA's budget allocation for IT and network services over the past 5-10 years would provide context for the $1.26 billion award, helping to determine if it represents an increase, decrease, or stable level of investment relative to prior periods and agency needs.

How does the pricing of this AT&T contract compare to similar large-scale federal network contracts?

Directly comparing the pricing of this AT&T contract to similar large-scale federal network contracts requires access to detailed pricing structures and service level agreements (SLAs) for comparable awards. However, we can infer some aspects. The contract is awarded under full and open competition, which generally suggests that the pricing achieved is competitive within the market. The total value of $1.26 billion over approximately 6 years averages to about $210 million annually. This figure needs to be benchmarked against the scope and quality of services provided. For instance, contracts for similar bandwidth, geographic coverage, security features, and support levels awarded to other major telecommunications providers (e.g., Verizon, Lumen) by agencies like the DoD or GSA would serve as relevant comparisons. The presence of an Economic Price Adjustment (EPA) clause means the final cost could deviate from the initial fixed price, making precise year-over-year comparisons challenging without tracking the EPA's impact. A thorough analysis would involve comparing unit costs for specific services (e.g., cost per Mbps, cost per circuit) if available.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

The provided data does not detail the specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this Enterprise Data Network Services contract. However, for a contract of this magnitude and criticality, typical KPIs and SLAs would focus on network availability (uptime), latency, packet loss, bandwidth utilization, Mean Time To Repair (MTTR), and customer support response times. These metrics are essential for ensuring the reliability and performance of the network infrastructure supporting the Department of Veterans Affairs' operations. The contract likely specifies thresholds for these indicators, with potential financial penalties (service credits) for the contractor if they are not met. The Department of Veterans Affairs would actively monitor these KPIs to ensure AT&T is meeting its contractual obligations and providing the expected level of service quality necessary for its mission-critical functions.

What is AT&T's track record with large federal IT and telecommunications contracts?

AT&T has a long and extensive track record of securing and performing on large federal IT and telecommunications contracts across various government agencies, including the Department of Defense, General Services Administration, and others. They are a major incumbent provider for many government network services. Their experience spans complex network infrastructure, cybersecurity solutions, wireless services, and managed IT services. Historically, AT&T has been awarded numerous multi-billion dollar contracts, demonstrating their capability to handle large-scale deployments and long-term service delivery. While specific performance details for every contract are not publicly available, their continued success in winning competitive bids for significant federal programs indicates a generally positive standing and proven ability to meet government requirements. However, like any large contractor, there may be instances of performance issues or contract disputes on specific awards, which would be documented in contract performance databases or IG reports.

What are the potential risks associated with the 'Fixed Price with Economic Price Adjustment' (FPEPA) contract type?

The 'Fixed Price with Economic Price Adjustment' (FPEPA) contract type introduces specific risks, primarily related to cost predictability. While the fixed price component offers a baseline cost certainty, the economic price adjustment allows for modifications to the contract price based on fluctuations in specified economic factors, such as inflation indices (e.g., Consumer Price Index, Producer Price Index) or specific commodity costs. The primary risk for the government (and taxpayers) is that these adjustments could lead to the contract price increasing significantly over its duration, potentially exceeding initial budget projections or the cost that might have been achieved under a firm fixed-price contract without adjustments. Conversely, the contractor faces the risk of price decreases if economic factors move unfavorably, though the EPA is typically structured to mitigate this. For the VA, managing and validating the economic indices used for adjustment requires diligent oversight to ensure fairness and prevent unwarranted cost escalations.

How does this contract align with the VA's broader IT modernization and digital transformation goals?

This Enterprise Data Network Services contract is fundamental to the VA's broader IT modernization and digital transformation goals. A robust, reliable, and high-performance network is the backbone for virtually all modern digital services, including electronic health records (EHR), telehealth platforms, data analytics, and secure communication systems. By investing in advanced network infrastructure through this contract with AT&T, the VA is enabling the secure and efficient delivery of digital services to veterans and healthcare providers nationwide. This supports goals such as improving access to care, enhancing data sharing, and streamlining administrative processes. The network's capacity and reliability directly impact the user experience and the effectiveness of digital tools, making this contract a critical enabler for the VA's strategic objectives in leveraging technology to better serve the veteran community.

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: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: Tyto Athene, LLC

Address: 4807 STONECROFT BLVD, CHANTILLY, VA, 20151

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

Financial Breakdown

Contract Ceiling: $2,479,983,145

Exercised Options: $1,255,523,993

Current Obligation: $1,255,523,993

Actual Outlays: $740,452,455

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q17NSD3000

IDV Type: IDC

Timeline