DoD Awards $4.8M for Wired Telecom, Boosting Spending 20% Amidst Full and Open Competition
Contract Overview
Contract Amount: $4,828,411 ($4.8M)
Contractor: Verizon Business Network Services LLC
Awarding Agency: Department of Defense
Start Date: 2020-12-16
End Date: 2032-07-30
Contract Duration: 4,244 days
Daily Burn Rate: $1.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 7
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: IT
Official Description: SURGE - 20%
Place of Performance
Location: FORT KNOX, HARDIN County, KENTUCKY, 40122
State: Kentucky Government Spending
Plain-Language Summary
Department of Defense obligated $4.8 million to VERIZON BUSINESS NETWORK SERVICES LLC for work described as: SURGE - 20% Key points: 1. Significant spending increase of 20% highlights growing demand or expanded scope. 2. Verizon Business Network Services LLC secured the contract, indicating strong incumbent performance or competitive bidding. 3. The contract's fixed-price with economic price adjustment structure may expose taxpayers to inflation risks. 4. The 'Wired Telecommunications Carriers' sector is critical for defense infrastructure, but subject to rapid technological change.
Value Assessment
Rating: good
The award amount of $4.8M appears reasonable for wired telecommunications services, especially given the long duration. Benchmarking against similar large-scale network contracts would provide further validation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Full and open competition suggests a robust price discovery process. However, the long contract duration and potential for economic price adjustments warrant scrutiny to ensure continued cost-effectiveness.
Taxpayer Impact: The use of economic price adjustments could lead to increased costs for taxpayers if inflation significantly outpaces projections.
Public Impact
Ensures critical communication infrastructure for the Department of Defense. Supports national security by maintaining reliable wired telecommunications. Potential for job creation within the telecommunications sector. Long-term commitment may offer stability for service provider and government planning.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment clause could increase costs.
- Long contract duration (over 12 years) may limit flexibility for adopting newer technologies.
- Sole provider for specific network services could emerge over time.
Positive Signals
- Awarded under full and open competition.
- Significant spending increase suggests critical need.
- Long-term contract provides service continuity.
Sector Analysis
This contract falls within the IT and Telecommunications sector, crucial for modern defense operations. Spending benchmarks in this area are highly variable due to rapid technological advancements and infrastructure needs.
Small Business Impact
The data does not indicate specific set-asides for small businesses. Large telecommunications contracts often involve prime contractors who may then subcontract to smaller entities, but this is not explicitly stated.
Oversight & Accountability
The contract's long duration and economic price adjustment clause necessitate ongoing oversight to ensure fair pricing and performance. Regular reviews by the Defense Information Systems Agency are crucial.
Related Government Programs
- Wired Telecommunications Carriers
- Department of Defense Contracting
- Defense Information Systems Agency Programs
Risk Flags
- Economic price adjustment risk.
- Long contract duration limiting flexibility.
- Potential for vendor lock-in.
- Dependency on a single large provider.
- Rapid technological obsolescence in telecommunications.
Tags
wired-telecommunications-carriers, department-of-defense, ky, delivery-order, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $4.8 million to VERIZON BUSINESS NETWORK SERVICES LLC. SURGE - 20%
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 $4.8 million.
What is the period of performance?
Start: 2020-12-16. End: 2032-07-30.
What specific services are included under 'Wired Telecommunications Carriers' for this contract, and how do they align with current and future DoD communication needs?
The specific services likely encompass a range of wired network infrastructure, including broadband, dedicated lines, and potentially voice services. Given the 'SURGE - 20%' indicator, these services are critical and possibly expanding. Alignment with future needs requires assessing the contract's flexibility for technological upgrades and integration with emerging communication systems like 5G or satellite integration.
How will the economic price adjustment clause be monitored to prevent excessive cost increases for taxpayers, especially given the contract's extended duration?
Monitoring will involve rigorous tracking of the specified economic indicators (e.g., CPI, industry-specific indices) used in the adjustment formula. The Department of Defense should establish clear thresholds and review triggers to cap or renegotiate adjustments if they exceed reasonable market fluctuations or impact budget predictability. Independent audits could further ensure fairness.
What is the potential risk of vendor lock-in or reduced innovation due to the long contract duration and the incumbent provider's potential advantage?
A long duration (over 12 years) inherently increases the risk of vendor lock-in, as switching providers becomes more complex and costly. This can reduce competitive pressure and stifle innovation if the incumbent does not proactively upgrade services. Mitigation strategies include performance-based incentives for innovation and periodic market research to ensure continued value.
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
Offers Received: 7
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: $30,820,721
Exercised Options: $8,697,609
Current Obligation: $4,828,411
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: 2032-07-30
Potential End Date: 2032-07-30 00:00:00
Last Modified: 2026-01-09
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