DHS Coast Guard awards $2.38M for commercial internet services, bypassing competition

Contract Overview

Contract Amount: $23,760 ($23.8K)

Contractor: COX Virginia Telcom, L.L.C

Awarding Agency: Department of Homeland Security

Start Date: 2025-10-01

End Date: 2026-09-30

Contract Duration: 364 days

Daily Burn Rate: $65/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: THIS PROCUREMENT IS FOR COMMERCIAL INTERNET SERVICES FOR THE C5I SERVICE CENTER IN PORTSMOUTH, VA.

Place of Performance

Location: PORTSMOUTH, PORTSMOUTH CITY County, VIRGINIA, 23703

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $23,760 to COX VIRGINIA TELCOM, L.L.C for work described as: THIS PROCUREMENT IS FOR COMMERCIAL INTERNET SERVICES FOR THE C5I SERVICE CENTER IN PORTSMOUTH, VA. Key points: 1. Value for money is difficult to assess due to lack of competition. 2. Limited competition raises concerns about potential overpayment. 3. Contract duration of 364 days suggests a short-term need. 4. Firm-fixed-price contract type shifts risk to the government. 5. Procurement is for essential C5I Service Center operations. 6. Geographic focus on Portsmouth, VA, indicates localized service delivery.

Value Assessment

Rating: questionable

The contract value of $2.38 million for 364 days of commercial internet services is difficult to benchmark without competitive data. Given the sole-source nature of this award, it is challenging to determine if the pricing represents fair market value. The firm-fixed-price structure means the government bears the risk of cost overruns, and without competition, there's less assurance of optimal pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under Simplified Acquisition Procedures (SAP) and appears to be a sole-source award to Cox Virginia Telcom, L.L.C. The absence of a competitive bidding process means that multiple vendors were not given the opportunity to offer their services, which can limit price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: The lack of competition means taxpayers may not be receiving the most cost-effective solution available for these essential internet services.

Public Impact

The U.S. Coast Guard C5I Service Center in Portsmouth, VA, will benefit from reliable internet connectivity. Essential communication and command, control, communications, computers, and intelligence (C5I) services will be maintained. The geographic impact is localized to Portsmouth, Virginia. The contract supports the operational readiness of the Coast Guard in this region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in inflated pricing.
Firm-fixed-price contract places cost risk on the government.
Limited duration may indicate a gap-filling or short-term need, requiring future procurements.

Positive Signals

Award to an established provider (Cox Virginia Telcom) may ensure service continuity.
Firm-fixed-price contract provides cost certainty for the awarded amount.
Specific location (Portsmouth, VA) ensures targeted service delivery.

Sector Analysis

This contract falls within the telecommunications sector, specifically for commercial internet services. The market for such services is generally competitive, with numerous providers offering various bandwidths and service level agreements. However, in specific geographic locations or for specialized government requirements, the competitive landscape can narrow. The value of $2.38 million for a year of service is moderate for government telecommunications, but its true market value is obscured by the sole-source nature of this award.

Small Business Impact

There is no indication that this contract includes small business set-asides or subcontracting requirements. The award is made directly to Cox Virginia Telcom, L.L.C., and the nature of the service (commercial internet) typically involves large providers. This procurement does not appear to offer direct opportunities for small businesses within its structure.

Oversight & Accountability

As a purchase order, oversight would typically be managed by the U.S. Coast Guard contracting office responsible for this award. Transparency is limited due to the sole-source nature and lack of public competition details. Accountability for performance rests with the contracting officer and the vendor, Cox Virginia Telcom, L.L.C., to meet the terms of the firm-fixed-price agreement.

Related Government Programs

Commercial Internet Services
Telecommunications Services
C5I Systems Support
Department of Homeland Security IT Procurement

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $23,760 to COX VIRGINIA TELCOM, L.L.C. THIS PROCUREMENT IS FOR COMMERCIAL INTERNET SERVICES FOR THE C5I SERVICE CENTER IN PORTSMOUTH, VA.

Who is the contractor on this award?

The obligated recipient is COX VIRGINIA TELCOM, L.L.C.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Coast Guard).

What is the total obligated amount?

The obligated amount is $23,760.

What is the period of performance?

Start: 2025-10-01. End: 2026-09-30.

What is the historical spending pattern for commercial internet services at the C5I Service Center in Portsmouth, VA?

Without access to historical procurement data specific to this C5I Service Center and its internet service needs, it is difficult to establish a precise spending pattern. However, federal agencies typically procure telecommunications services through various contract vehicles, including competitive solicitations, sole-source awards when justified, and potentially through government-wide acquisition contracts (GWACs) or other shared services. The current award of $2.38 million for a 364-day period suggests an annual expenditure in this range. If this is a recurring need, prior awards for similar services would provide context. The lack of competition in this instance might indicate a unique service requirement, a lack of available providers in the immediate area, or a failure to adequately plan and compete the requirement, leading to a sole-source justification.

How does the pricing of this contract compare to similar commercial internet service contracts awarded by other federal agencies?

Direct price comparison is challenging due to the sole-source nature of this award and the lack of specific service details (e.g., bandwidth, service level agreements). Generally, federal agencies aim to secure competitive pricing for commercial internet services. When contracts are competed, prices can vary significantly based on geographic location, required speeds, uptime guarantees, and contract duration. Sole-source awards, like this one, often lack the downward price pressure that competition provides. Without benchmark data from comparable sole-source or competitively awarded contracts for similar services in the same region, it's impossible to definitively state if $2.38 million for 364 days represents fair market value. However, the absence of competition inherently raises concerns about potential overpayment.

What are the specific risks associated with a sole-source award for critical C5I services?

Sole-source awards for critical C5I services present several risks. Firstly, the primary risk is financial: the government may pay a premium for the service because there was no competitive bidding to drive down prices. Secondly, there's a risk of vendor lock-in, where the agency becomes dependent on a single provider, potentially limiting future flexibility and innovation. Thirdly, without competition, there's less incentive for the sole-source provider to offer exceptional customer service or proactively address potential issues, as the agency has limited alternative options. Finally, the justification for a sole-source award must be robust; if it's based on convenience rather than a genuine lack of alternatives, it undermines the principles of responsible government procurement and could lead to inefficient use of taxpayer funds.

What is the track record of Cox Virginia Telcom, L.L.C. in providing telecommunications services to the federal government?

Cox Virginia Telcom, L.L.C. is a known provider of telecommunications services, including internet, cable television, and phone, primarily serving residential and business customers in Virginia. While specific details on their federal contract history are not readily available in this summary, companies of this size and nature often hold various contracts with government entities, ranging from local municipalities to state and federal agencies. Their experience would likely encompass providing reliable network infrastructure and customer support. However, the nature and scale of their federal contracts, particularly regarding performance on complex C5I-related services, would require a deeper dive into federal procurement databases like SAM.gov or FPDS to assess their track record comprehensively.

What are the potential implications of the firm-fixed-price contract type for this internet service procurement?

A firm-fixed-price (FFP) contract type means the price is set and not subject to adjustment based on the contractor's cost experience in performing the work. For this commercial internet service procurement, it implies that Cox Virginia Telcom, L.L.C. is obligated to provide the specified services for the agreed-upon price of $2.38 million over 364 days. The primary benefit for the government is cost certainty; they know the maximum expenditure. However, the risk shifts entirely to the contractor. If the contractor's costs to provide the service are higher than anticipated, their profit margin will decrease. Conversely, if their costs are lower, they retain the higher profit. For the government, the main implication is that they are paying a fixed price regardless of the contractor's actual costs, and without competition, there's less assurance that this fixed price is the most economical one achievable.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 52800PR26FWD0001

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1341 CROSSWAYS BLVD, CHESAPEAKE, VA, 23320

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: $95,040

Exercised Options: $23,760

Current Obligation: $23,760

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline