DoD's $5.46M VPNs and Access Transport Contract Awarded to Verizon Business
Contract Overview
Contract Amount: $5,460,160 ($5.5M)
Contractor: Verizon Business Network Services LLC
Awarding Agency: Department of Defense
Start Date: 2020-12-16
End Date: 2025-12-31
Contract Duration: 1,841 days
Daily Burn Rate: $3.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: IT
Official Description: VPNS PORT AND ACCESS TRANSPORT
Place of Performance
Location: NEWPORT, NEWPORT County, RHODE ISLAND, 02841
Plain-Language Summary
Department of Defense obligated $5.5 million to VERIZON BUSINESS NETWORK SERVICES LLC for work described as: VPNS PORT AND ACCESS TRANSPORT Key points: 1. Significant contract value for essential network services. 2. Verizon Business is a major player in telecommunications. 3. Potential risks include vendor lock-in and service disruptions. 4. Spending falls within the IT and Telecommunications sector.
Value Assessment
Rating: good
The contract value of $5.46M over approximately 5 years appears reasonable for VPN and access transport services, especially considering the provider is a large, established telecommunications company.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process that likely led to a fair price discovery. The use of a delivery order indicates flexibility in service needs.
Taxpayer Impact: Taxpayers benefit from competitive pricing achieved through an open bidding process for critical IT infrastructure.
Public Impact
Ensures secure and reliable communication for Department of Defense personnel. Supports essential government operations requiring robust network connectivity. Provides access to vital information and services for military and civilian staff.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment clause could lead to cost increases.
- Dependence on a single large vendor for critical infrastructure.
Positive Signals
- Awarded through full and open competition.
- Long-term contract provides service stability.
- Utilizes a major, experienced telecommunications provider.
Sector Analysis
This contract falls within the IT and Wired Telecommunications Carriers sector. Spending benchmarks for similar government VPN and network access services vary widely based on scope, duration, and provider, but this value appears within a typical range for a large agency.
Small Business Impact
While this contract was awarded to a large business (Verizon Business Network Services LLC), there is no explicit indication of small business participation or subcontracting within the provided data. Future contracts could explore opportunities for small business involvement in supporting roles.
Oversight & Accountability
The Defense Information Systems Agency (DISA) is responsible for overseeing this contract. Standard oversight mechanisms for delivery orders and fixed-price contracts with economic price adjustments would apply to ensure performance and cost control.
Related Government Programs
- Wired Telecommunications Carriers
- Department of Defense Contracting
- Defense Information Systems Agency Programs
Risk Flags
- Potential for cost increases due to economic price adjustment.
- Concentration of risk with a single large vendor.
- Lack of explicit small business participation noted.
- Fixed Price with Economic Price Adjustment contract type.
Tags
wired-telecommunications-carriers, department-of-defense, ri, delivery-order, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $5.5 million to VERIZON BUSINESS NETWORK SERVICES LLC. VPNS PORT AND ACCESS TRANSPORT
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 $5.5 million.
What is the period of performance?
Start: 2020-12-16. End: 2025-12-31.
What is the specific impact of the economic price adjustment clause on the final cost?
The economic price adjustment (EPA) clause allows for modifications to the contract price based on fluctuations in specified economic factors, such as inflation or labor costs. Without knowing the specific index or caps tied to this EPA, it's difficult to quantify the exact potential cost increase. However, it introduces a degree of uncertainty and potential for higher spending than the initial $5.46M if economic conditions are unfavorable.
What are the risks associated with relying on a single large vendor for critical network transport?
Relying on a single large vendor like Verizon for critical network transport presents several risks. These include potential vendor lock-in, making it difficult and costly to switch providers if service quality declines or prices increase significantly. It also concentrates risk; any service outage or security breach experienced by the vendor could have a widespread impact on DoD operations. Furthermore, a single vendor may have less incentive to innovate or offer competitive pricing over the long term.
How does this contract contribute to the overall effectiveness of DoD's communication infrastructure?
This contract is crucial for maintaining the effectiveness of the DoD's communication infrastructure by providing secure and reliable VPN and access transport services. These services are fundamental for enabling secure data exchange, command and control operations, and access to essential applications and information across various DoD entities and locations. The long-term nature of the contract suggests a commitment to sustained operational capability and network stability.
Industry Classification
NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - NETWORK
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: HC101320R0006
Offers Received: 1
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
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: $18,381,096
Exercised Options: $6,287,286
Current Obligation: $5,460,160
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: GS00Q17NSD3009
IDV Type: IDC
Timeline
Start Date: 2020-12-16
Current End Date: 2025-12-31
Potential End Date: 2032-07-30 00:00:00
Last Modified: 2026-01-13
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