DoD's $113.9M Verizon contract for wired telecommunications services awarded under full and open competition

Contract Overview

Contract Amount: $11,391,900 ($11.4M)

Contractor: Verizon Business Network Services LLC

Awarding Agency: Department of Defense

Start Date: 2022-03-05

End Date: 2025-09-05

Contract Duration: 1,280 days

Daily Burn Rate: $8.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: VZBZ000977EBM !G SERVICE

Place of Performance

Location: ASHBURN, LOUDOUN County, VIRGINIA, 20147

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $11.4 million to VERIZON BUSINESS NETWORK SERVICES LLC for work described as: VZBZ000977EBM !G SERVICE Key points: 1. Contract awarded to Verizon Business Network Services LLC for wired telecommunications carriers. 2. Significant contract value of $113.9 million over its period of performance. 3. Awarded via full and open competition, suggesting a competitive bidding process. 4. Contract type is Firm Fixed Price, providing cost certainty for the government. 5. Performance period spans from March 2022 to September 2025. 6. The contract is a Delivery Order under a larger contract vehicle. 7. The North American Industry Classification System (NAICS) code is 517110 for Wired Telecommunications Carriers.

Value Assessment

Rating: good

The contract value of $113.9 million for wired telecommunications services appears to be within a reasonable range for a multi-year federal contract of this nature. Without specific benchmarks for the exact services and geographic coverage, a direct per-unit cost comparison is difficult. However, the firm fixed-price structure suggests that the government has negotiated a set price, which can be advantageous in managing costs. Further analysis would require comparing the scope of services and pricing against similar contracts awarded by the Defense Information Systems Agency (DISA) or other Department of Defense (DoD) components for comparable telecommunications infrastructure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. The specific number of bidders is not provided in the data, but this method of procurement generally fosters a competitive environment. A competitive process is expected to drive down prices and encourage innovation as contractors vie for the award. The Defense Information Systems Agency (DISA) likely leveraged this approach to ensure the best value for the government.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it increases the likelihood of securing services at competitive market rates, preventing potential overpayment and maximizing the return on investment for federal funds.

Public Impact

The Department of Defense (DoD) is the primary beneficiary, receiving essential wired telecommunications services. These services are critical for maintaining secure and reliable communication networks supporting military operations and administrative functions. The contract's geographic impact is likely nationwide, supporting DoD installations and personnel across various locations. The contract supports jobs within the telecommunications sector, specifically for Verizon Business Network Services LLC and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on the number of bidders limits the assessment of the true competitive intensity.
The duration of the contract (1280 days) requires ongoing monitoring to ensure continued value and performance.
Without detailed service level agreements (SLAs) or performance metrics, it's challenging to fully assess performance against expectations.

Positive Signals

Awarded through full and open competition, suggesting a robust bidding process.
Firm Fixed Price contract type provides cost predictability for the government.
The contract is managed by the Defense Information Systems Agency (DISA), a key agency for IT and communications within the DoD.
The contract is a Delivery Order, implying it's part of a pre-established contract vehicle, potentially streamlining acquisition.

Sector Analysis

The wired telecommunications carriers sector is a mature industry providing essential infrastructure for data transmission and communication. This contract falls within the broader telecommunications services market, which is characterized by significant investment in network infrastructure and ongoing technological advancements. The Department of Defense is a major consumer of these services, requiring robust, secure, and reliable networks to support its global operations. Spending in this sector by federal agencies is substantial, often involving long-term contracts for network connectivity, data transport, and related services. Comparable spending benchmarks would typically involve analyzing other large-scale telecommunications contracts awarded to major providers by government entities.

Small Business Impact

The provided data indicates that small business participation (sb) is false and there is no indication of a small business set-aside (ss). This suggests that the contract was not specifically targeted towards small businesses. Consequently, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. The primary contractor, Verizon Business Network Services LLC, is a large entity, and while they may engage small businesses as subcontractors in their broader operations, this specific contract does not appear to have a formal small business component mandated by the award terms.

Oversight & Accountability

Oversight for this contract would primarily fall under the purview of the Defense Information Systems Agency (DISA) and the Department of Defense (DoD). DISA is responsible for managing and overseeing the performance of its contracted services, ensuring compliance with terms and conditions. Accountability measures are typically embedded within the contract's performance work statement (PWS) and require the contractor to meet specific service level agreements (SLAs). Transparency is facilitated through contract award databases and reporting requirements. While specific Inspector General (IG) jurisdiction for this particular delivery order isn't detailed, the DoD IG generally has oversight over DoD contracts to investigate fraud, waste, and abuse.

Related Government Programs

DoD Enterprise Telecommunications Services
Network Infrastructure Modernization Programs
Government Wide Acquisition Contracts (GWACs) for IT Services
Defense Information Technology Contracting Office (DITCO) Contracts

Risk Flags

Potential for scope creep if not managed tightly.
Cybersecurity vulnerabilities inherent in telecommunications networks.
Dependence on a single large provider could pose risks.
Ensuring consistent service levels across all locations.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.4 million to VERIZON BUSINESS NETWORK SERVICES LLC. VZBZ000977EBM !G SERVICE

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 $11.4 million.

What is the period of performance?

Start: 2022-03-05. End: 2025-09-05.

What is the track record of Verizon Business Network Services LLC in fulfilling large federal telecommunications contracts?

Verizon Business Network Services LLC has a substantial history of securing and performing on large federal telecommunications contracts across various agencies, including the Department of Defense. They are a major telecommunications provider with extensive infrastructure and experience in delivering complex network solutions. Past performance evaluations, often available through federal procurement databases or agency-specific reports, would provide more granular detail on their success rates, adherence to schedules, and quality of service in similar engagements. Their consistent presence in winning significant federal awards suggests a generally positive track record, though specific contract performance can vary based on scope, duration, and management.

How does the $113.9 million contract value compare to similar DoD wired telecommunications contracts?

The $113.9 million contract value for wired telecommunications services awarded to Verizon Business Network Services LLC by the Defense Information Systems Agency (DISA) is a significant but not unusual figure for large-scale federal telecommunications procurements. DISA manages extensive communication networks for the DoD, often awarding multi-year contracts in the tens or hundreds of millions of dollars. To provide a precise comparison, one would need to analyze contracts with similar scopes of work (e.g., nationwide network backbone, specific bandwidth requirements, security protocols) and durations awarded to other major telecommunications providers (like AT&T, Lumen, etc.) within the DoD or other federal agencies over the past few years. However, given the critical nature of DoD communications, such substantial investments are typical for ensuring robust and reliable infrastructure.

What are the primary risks associated with this type of federal telecommunications contract?

Primary risks associated with this federal telecommunications contract include potential cost overruns if the firm fixed-price (FFP) structure doesn't adequately account for unforeseen technological changes or escalating operational costs, although FFP generally aims to mitigate this. Performance risks involve ensuring the reliability, security, and availability of the network services, especially given the critical nature of DoD operations. There's also a risk of vendor lock-in, where transitioning to a new provider could be complex and costly. Furthermore, cybersecurity threats are an inherent risk in any telecommunications contract, requiring robust security measures from the contractor and continuous monitoring by the agency. Changes in government requirements or budget constraints could also impact the contract's execution.

How effective is the 'full and open competition' procurement method for ensuring value in telecommunications services?

The 'full and open competition' method is generally considered highly effective for ensuring value in telecommunications services. By allowing all responsible sources to compete, it maximizes the pool of potential bidders, thereby increasing the likelihood of receiving competitive pricing and innovative solutions. This method encourages vendors to offer their best terms and pricing to win the contract. For telecommunications, where technology and service offerings can vary significantly, open competition allows the government to evaluate a wide range of technical approaches and cost structures. The Defense Information Systems Agency (DISA) likely utilized this method to secure the most advantageous combination of performance, reliability, and cost for its critical communication needs.

What are the historical spending patterns for wired telecommunications carriers by the Department of Defense?

The Department of Defense (DoD) has historically been a significant spender in the wired telecommunications carriers sector, reflecting its vast operational footprint and critical need for secure, reliable communication networks. Spending in this area typically involves substantial, long-term contracts for services like dedicated data lines, internet access, voice services, and network infrastructure across numerous domestic and international locations. Agencies like the Defense Information Systems Agency (DISA) are central to managing these expenditures. Historical data would likely show consistent, high-volume spending on telecommunications, often awarded to major carriers through competitive processes, with contract values frequently reaching tens or hundreds of millions of dollars annually, adjusted for inflation and evolving technological requirements.

What is the significance of this contract being a 'Delivery Order'?

The designation of this contract as a 'Delivery Order' (DO) signifies that it is a task order issued under a previously awarded, indefinite-delivery, indefinite-quantity (IDIQ) contract or a similar type of contract vehicle. This implies that the foundational contract terms, including pricing, scope, and competition requirements, were established earlier. A Delivery Order allows the agency (DISA in this case) to procure specific quantities of goods or services up to the ceiling of the parent contract. This approach offers flexibility for the government to order services as needed while potentially streamlining the acquisition process compared to issuing a completely new contract for each requirement. It also suggests that the initial competition for the parent contract was robust.

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 - DELIVERY

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

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

Financial Breakdown

Contract Ceiling: $11,391,900

Exercised Options: $11,391,900

Current Obligation: $11,391,900

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC101909D2000

IDV Type: IDC

Timeline