DoD's $205M Verizon NS/EP Contract Lacks Competition, Raises Cost Concerns
Contract Overview
Contract Amount: $205,082,510 ($205.1M)
Contractor: Verizon Business Network Services LLC
Awarding Agency: Department of Defense
Start Date: 2014-05-30
End Date: 2024-09-30
Contract Duration: 3,776 days
Daily Burn Rate: $54.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: IGF::OT::IGF NATIONAL SECURITY AND EMERGENCY PREPAREDNESS (NS/EP) PRIORITY SERVICE (PS) WITH VERIZON BUSINESS SERVICES
Place of Performance
Location: FORT GEORGE G MEADE, ANNE ARUNDEL County, MARYLAND, 20755
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $205.1 million to VERIZON BUSINESS NETWORK SERVICES LLC for work described as: IGF::OT::IGF NATIONAL SECURITY AND EMERGENCY PREPAREDNESS (NS/EP) PRIORITY SERVICE (PS) WITH VERIZON BUSINESS SERVICES Key points: 1. Significant spending on critical national security communications. 2. Sole-source award limits price discovery and potential savings. 3. Long contract duration may obscure current market value. 4. Wireless telecommunications sector is highly competitive.
Value Assessment
Rating: questionable
The contract's value is substantial, but without competition, it's difficult to assess if the pricing is optimal. Benchmarking against similar government or commercial NS/EP contracts would be necessary for a thorough valuation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and may lead to higher costs for taxpayers as competitive pressures are absent.
Taxpayer Impact: The lack of competition on this large contract likely results in higher costs than could be achieved through a competitive bidding process.
Public Impact
Ensures critical communication lines for national security and emergency preparedness. Reliance on a single provider for essential services could pose a risk if service is interrupted. Taxpayers may be overpaying due to the absence of competitive bidding.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- Potential for Overpricing
- Long-Term Dependency
Positive Signals
- Ensures critical NS/EP communications
- Established provider with experience
Sector Analysis
This contract falls within the wireless telecommunications sector, which is generally characterized by rapid technological advancement and robust competition. Government spending in this area often focuses on ensuring reliable and secure communication networks for critical functions.
Small Business Impact
The data indicates that neither small business participation nor set-asides were factors in this contract award. This suggests that opportunities for small businesses within this specific procurement were not pursued.
Oversight & Accountability
The sole-source nature of this contract warrants scrutiny to ensure fair pricing and adequate service levels. Oversight should focus on performance metrics and justification for continued sole-source status.
Related Government Programs
- Wireless Telecommunications Carriers (except Satellite)
- Department of Defense Contracting
- Defense Information Systems Agency Programs
Risk Flags
- Lack of Competition
- Potential for Overpricing
- Long Contract Duration (2014-2024)
- Sole-Source Award
Tags
wireless-telecommunications-carriers-exc, department-of-defense, md, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $205.1 million to VERIZON BUSINESS NETWORK SERVICES LLC. IGF::OT::IGF NATIONAL SECURITY AND EMERGENCY PREPAREDNESS (NS/EP) PRIORITY SERVICE (PS) WITH VERIZON BUSINESS SERVICES
Who is the contractor on this award?
The obligated recipient is VERIZON BUSINESS NETWORK SERVICES LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Information Systems Agency).
What is the total obligated amount?
The obligated amount is $205.1 million.
What is the period of performance?
Start: 2014-05-30. End: 2024-09-30.
What is the justification for awarding this critical national security contract on a sole-source basis, and has it been re-evaluated over its long duration?
The justification for a sole-source award typically centers on unique capabilities, urgent needs, or lack of viable alternatives. For a contract spanning a decade, agencies must regularly re-evaluate the market to ensure competition is not feasible or that the sole-source justification remains valid. Without this, taxpayers risk paying inflated prices for services that could be procured more cost-effectively.
How does the pricing of this contract compare to commercial rates for similar NS/EP services, considering the lack of competition?
Given the sole-source nature and lack of competition, it is highly probable that the pricing is not benchmarked against current market rates. Commercial entities benefit from competitive pressures that drive down costs. Without a competitive process or independent benchmarking, the government may be paying a premium, potentially significantly higher than what could be negotiated in a competitive environment.
What are the contingency plans and service level agreements in place to mitigate risks associated with relying on a single provider for critical national security communications?
Robust contingency plans and stringent service level agreements (SLAs) are crucial for sole-source contracts, especially for NS/EP services. These should include detailed protocols for service restoration, penalties for non-compliance, and regular performance reviews. The agency must ensure these measures adequately protect national security interests and taxpayer investment against potential provider failures or disruptions.
Industry Classification
NAICS: Information › Wireless Telecommunications Carriers (except Satellite) › Wireless Telecommunications Carriers (except Satellite)
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: HC101314R0003
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Verizon Maryland LLC
Address: 22001 LOUDOUN COUNTY PKWY, 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: $212,682,474
Exercised Options: $205,082,510
Current Obligation: $205,082,510
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2014-05-30
Current End Date: 2024-09-30
Potential End Date: 2024-09-30 00:00:00
Last Modified: 2024-12-09
More Contracts from Verizon Business Network Services LLC
- Centralized HHS EIS Requirement — $398.5M (Department of Health and Human Services)
- Enterprise Infrastructure Solutions (EIS) Program - SSA Data Network Services (ssanet) — $283.5M (Social Security Administration)
- THE Tfcceis Task Order IS to Transition the Existing Tfcc Services From the Networx Contract Onto the EIS Contract Vehicle in a Manner That Will Enable Continuity of an Enterprise Network of Toll Free Services for the IRS — $264.6M (Department of the Treasury)
- Toll Free Contact Center (tfcc)-Verizon-Exercise Option Period 1 YR 3 — $192.8M (Department of the Treasury)
- Create Delivery Order 0001 Support Services — $136.1M (Department of Transportation)
View all Verizon Business Network Services LLC federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)