DOJ's $97.8M Telecom Contract with Verizon Faces Scrutiny Over Value and Competition
Contract Overview
Contract Amount: $97,873,021 ($97.9M)
Contractor: Verizon Federal Inc.
Awarding Agency: Department of Justice
Start Date: 2010-12-20
End Date: 2024-06-30
Contract Duration: 4,941 days
Daily Burn Rate: $19.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: TIME AND MATERIALS
Sector: IT
Official Description: NATIONAL CAPITAL AREA TELECOMMUNICATION SERVICES REQUIREMENT FOR THE DEPARTMENT OF JUSTICE
Place of Performance
Location: ASHBURN, LOUDOUN County, VIRGINIA, 20147
State: Virginia Government Spending
Plain-Language Summary
Department of Justice obligated $97.9 million to VERIZON FEDERAL INC. for work described as: NATIONAL CAPITAL AREA TELECOMMUNICATION SERVICES REQUIREMENT FOR THE DEPARTMENT OF JUSTICE Key points: 1. Significant contract value of $97.8M over 13+ years. 2. Sole awardee Verizon Federal Inc. raises questions about competition. 3. Potential for overpayment given the long duration and Time & Materials pricing. 4. Telecommunications sector is critical but prone to rapid technological change.
Value Assessment
Rating: questionable
The contract's Time and Materials pricing structure over nearly 14 years raises concerns about cost control and potential overpayment. Benchmarking against similar, shorter-term telecommunication service contracts is difficult due to the extended duration and specific service scope.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Despite being awarded under 'Full and Open Competition,' the data indicates only one delivery order was issued to Verizon Federal Inc. This suggests limited actual competition for this specific requirement, potentially impacting price discovery and overall value.
Taxpayer Impact: The long-term nature of this contract and the lack of demonstrated competitive pressure could lead to taxpayers paying more than necessary for telecommunication services.
Public Impact
Essential communication infrastructure for the Department of Justice. Long contract duration may not reflect current market pricing or technological advancements. Potential for cost overruns due to Time and Materials contract type. Impacts federal agencies relying on secure and reliable telecommunication services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (13+ years)
- Time and Materials pricing
- Single awardee despite 'Full and Open' status
- Potential for outdated technology
Positive Signals
- Provides essential telecommunication services
- Established vendor relationship
Sector Analysis
The Department of Justice requires robust telecommunication services for its operations. Spending in this sector is substantial across government, with benchmarks varying widely based on service type, scale, and contract structure. Long-term contracts can offer stability but risk obsolescence.
Small Business Impact
The data does not indicate any specific provisions or awards made to small businesses under this contract. The primary awardee is Verizon Federal Inc., a large corporation, suggesting limited direct impact or opportunity for small businesses in this specific procurement.
Oversight & Accountability
The 'Full and Open Competition' designation requires further investigation to understand why only one delivery order was issued. Oversight should focus on ensuring the pricing remains competitive and the services align with current technological needs throughout the contract's extended term.
Related Government Programs
- All Other Telecommunications
- Department of Justice Contracting
- Offices, Boards and Divisions Programs
Risk Flags
- Lack of demonstrated competition post-award
- Extended contract duration (13+ years)
- Time and Materials pricing structure
- Potential for technology obsolescence
- High contract value
Tags
all-other-telecommunications, department-of-justice, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Justice awarded $97.9 million to VERIZON FEDERAL INC.. NATIONAL CAPITAL AREA TELECOMMUNICATION SERVICES REQUIREMENT FOR THE DEPARTMENT OF JUSTICE
Who is the contractor on this award?
The obligated recipient is VERIZON FEDERAL INC..
Which agency awarded this contract?
Awarding agency: Department of Justice (Offices, Boards and Divisions).
What is the total obligated amount?
The obligated amount is $97.9 million.
What is the period of performance?
Start: 2010-12-20. End: 2024-06-30.
What was the justification for awarding a single delivery order under a 'Full and Open Competition' solicitation for such a long duration?
The justification for a single delivery order under 'Full and Open Competition' for this lengthy contract requires deeper analysis. It could stem from a highly specialized requirement, a lack of responsive bids beyond the initial awardee, or specific government needs that only Verizon could meet at the time. Understanding the competitive landscape at the time of award and subsequent renewals is crucial.
How does the Time and Materials pricing compare to fixed-price or other contract types for similar telecommunication services over comparable periods?
Time and Materials (T&M) contracts generally carry higher risk for the government compared to fixed-price contracts, as costs can escalate unpredictably. For telecommunication services, especially over a long duration like this (nearly 14 years), T&M pricing makes it difficult to benchmark against market rates. Fixed-price contracts often provide better cost certainty and encourage contractor efficiency.
What measures are in place to ensure the telecommunication services remain technologically relevant and cost-effective throughout the contract's extended period?
Given the contract's duration and T&M structure, proactive oversight is essential. Measures should include regular reviews of service performance, technology assessments to identify potential obsolescence, and negotiations to incorporate updated pricing or service levels. The government should actively manage the contract to prevent vendor lock-in and ensure continued value for taxpayer dollars.
Industry Classification
NAICS: Information › Other Telecommunications › All Other Telecommunications
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: 1
Pricing Type: TIME AND MATERIALS (Y)
Evaluated Preference: NONE
Contractor Details
Parent Company: Verizon Communications Inc
Address: 22001 LOUDOUN COUNTY PKWY STE C 2 1, ASHBURN, VA, 20147
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $104,015,192
Exercised Options: $104,015,192
Current Obligation: $97,873,021
Actual Outlays: $24,781,621
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: GS11T08BJD6001
IDV Type: IDC
Timeline
Start Date: 2010-12-20
Current End Date: 2024-06-30
Potential End Date: 2024-06-30 00:00:00
Last Modified: 2024-07-23
More Contracts from Verizon Federal Inc.
- TAS::75 4552 001::TAS Local Telecommunications Services DC Area — $279.2M (Department of Health and Human Services)
- 200608!003935!2100!w15p7t!usa Communications-Electronics !daab0797dl017 !A!N! !N!0040 ! !20060504!20080430!178041406!121732804!107212169!n!verizon Federal Inc !1320 N Courthouse Road, 8!arlington !va!22201!24915!053!53!fort Lewis !pierce !washington!+000007518623!n!n!000000000000!5805!telephone and Telegraph Equipment !A7 !electronics and Communication Equip !000 !NOT Discernable !334210!E! !5!B!M! !A! !99990909!B! ! !n!z!a!n!j!2!003!b! !Z!N!C! ! !Y!C!N! ! ! !a!a!a!a!000!a!b!n! ! ! ! ! ! !0001! ! — $37.7M (Department of Defense)
- Telephone And-Or Communications SER — $33.4M (Department of Health and Human Services)
- Telephone And-Or Communications SER — $30.5M (Department of Health and Human Services)
- Telephone Maintenance and Repair Service — $29.6M (General Services Administration)
Other Department of Justice Contracts
- Contractor Owned and Operated Existing Correctional Facility for Approximately 3,500 LOW Security Male Inmates — $794.5M (Cornell Companies, Inc.)
- Detention Services - SAN Diego — $776.9M (THE GEO Group, Inc.)
- CO: Telly Renfroe Award of NEW Task Order Base Year Initial Funding — $616.4M (AT&T Enterprises, LLC)
- TAS 151060 - Services for the Management and Operation of a Contractor-Owned, Contractor-Operated, Correctional Facility for 2,567 Beds in Adams County, Mississippi — $574.3M (Corecivic, Inc.)
- Provide Services for the Management and Operation of a Correctional Facility in Accordance With Rfp-Pcc-0014 — $568.9M (Cornell Companies, Inc.)