DoD awards $5.2M contract for wired telecommunications, raising questions about competition and value

Contract Overview

Contract Amount: $5,230,883 ($5.2M)

Contractor: Verizon Business Network Services LLC

Awarding Agency: Department of Defense

Start Date: 2025-09-06

End Date: 2026-12-31

Contract Duration: 481 days

Daily Burn Rate: $10.9K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: VZNS000018EBM STM64 CIRCUIT

Plain-Language Summary

Department of Defense obligated $5.2 million to VERIZON BUSINESS NETWORK SERVICES LLC for work described as: VZNS000018EBM STM64 CIRCUIT Key points: 1. Contract awarded on a non-competitive basis, limiting price discovery. 2. Duration of 481 days suggests a need for ongoing services. 3. Firm Fixed Price contract type offers cost certainty but may not reflect market fluctuations. 4. No indication of small business participation or set-asides. 5. High-level NAICS code (517111) points to a common industry sector. 6. Contract awarded by Defense Information Systems Agency, a key IT procurement arm.

Value Assessment

Rating: questionable

The contract value of $5.2 million for wired telecommunications services over approximately 13 months appears to be within a reasonable range for enterprise-level network services. However, without competitive bidding, it is difficult to benchmark the pricing against market rates or similar government contracts. The lack of competition prevents an assessment of whether the government received the best possible value for the funds expended. Further analysis would require comparing this award to other DISA contracts for similar services or to commercial offerings.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the Simplified Acquisition Procedures (SAP), indicating a sole-source award. The absence of competition means that only one vendor, Verizon Business Network Services LLC, was considered. This approach limits the government's ability to explore alternative solutions or negotiate more favorable terms that might arise from a competitive bidding process. The rationale for a sole-source award, such as unique capabilities or urgent need, is not provided.

Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competitive pressure. Without multiple bids, there is no assurance that the price reflects the most economical option available.

Public Impact

The Department of Defense benefits from the provision of wired telecommunications services, crucial for its operational infrastructure. These services likely support secure and reliable communication networks for military personnel and operations. The geographic impact is likely widespread, supporting DoD facilities across various locations. The contract supports the workforce within Verizon Business Network Services LLC, contributing to employment in the telecommunications sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpayment and limited vendor options.
The sole-source nature of the award warrants scrutiny to ensure necessity and fair pricing.
Absence of small business participation may limit opportunities for smaller firms in the telecommunications supply chain.

Positive Signals

Firm Fixed Price contract provides cost predictability for the government.
Award to an established provider like Verizon suggests a focus on reliability and existing infrastructure.
The contract duration aligns with the need for sustained telecommunications support.

Sector Analysis

The wired telecommunications carriers industry (NAICS 517111) is a mature sector providing essential connectivity services. Government spending in this area is substantial, supporting a wide range of agencies and their communication needs. This contract fits within the broader IT and telecommunications spending category, which is critical for national security and government operations. Comparable spending benchmarks would typically involve analyzing other large-scale telecommunications contracts awarded by the DoD or other federal agencies for similar services.

Small Business Impact

There is no indication that this contract included a small business set-aside. The award to a large telecommunications provider suggests that subcontracting opportunities for small businesses may be limited, depending on Verizon's internal subcontracting policies. Further investigation into subcontracting plans would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Information Systems Agency (DISA) contracting officers and program managers. Accountability measures would be tied to the performance requirements outlined in the contract. Transparency is limited due to the sole-source nature of the award; however, contract award data is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Defense Information Systems Agency (DISA) Contracts
Wired Telecommunications Services
Federal Communications Contracts
Department of Defense IT Spending

Risk Flags

Sole-source award lacks competitive justification.
Potential for non-competitive pricing.
Limited transparency in vendor selection.
No stated small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $5.2 million to VERIZON BUSINESS NETWORK SERVICES LLC. VZNS000018EBM STM64 CIRCUIT

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 $5.2 million.

What is the period of performance?

Start: 2025-09-06. End: 2026-12-31.

What is the track record of Verizon Business Network Services LLC in fulfilling similar government contracts?

Verizon Business Network Services LLC has a significant history of providing telecommunications services to the U.S. government, including the Department of Defense. They are a major provider of network infrastructure, voice, data, and internet services. Past performance data, often available through government contract databases and performance assessment reports, would detail their success in meeting delivery timelines, quality standards, and budgetary constraints on previous awards. While specific details for this contract are not provided, their established presence suggests a capacity to handle large-scale government requirements. However, the absence of competition on this specific award means that past performance alone does not guarantee optimal value for this particular procurement.

How does the awarded price compare to market rates for similar wired telecommunications services?

Benchmarking the awarded price of $5.2 million against market rates for similar wired telecommunications services is challenging without more specific details about the service scope, bandwidth, service level agreements, and geographic coverage. However, given that this was a sole-source award, there is a heightened risk that the price may not be as competitive as it would be in a fully open market. Typically, government contracts for enterprise-level telecommunications can range significantly. To perform a true market comparison, one would need to analyze commercial price lists for comparable business-tier services or review pricing on recently awarded, competitively bid government contracts for similar telecommunications solutions from other vendors.

What are the primary risks associated with a sole-source award for essential telecommunications services?

The primary risks associated with a sole-source award for essential telecommunications services include potential overpricing due to the lack of competitive pressure, limited innovation from a single vendor, and a reduced incentive for the contractor to offer superior service or value. Taxpayers may bear a higher cost than necessary. Furthermore, reliance on a single provider can create vendor lock-in, making it difficult and costly to switch providers in the future. There's also a risk that the specific needs of the agency might not be perfectly met if alternative solutions from other vendors were not explored. Ensuring the necessity and justification for the sole-source award is critical to mitigating these risks.

What is the expected effectiveness of these wired telecommunications services for the Department of Defense?

The effectiveness of these wired telecommunications services is expected to be high, given that they are being procured by the Department of Defense (DoD) through a major provider like Verizon Business Network Services LLC. These services are fundamental to the DoD's ability to communicate securely and reliably across its vast network of installations and operations. The firm fixed-price contract type suggests a clear understanding of the required services and associated costs, aiming for predictable performance. The effectiveness will ultimately depend on the quality of the infrastructure deployed, adherence to service level agreements (SLAs), and the provider's responsiveness to any network issues or requirements for upgrades, all of which are subject to the contract's terms and oversight.

What are the historical spending patterns for wired telecommunications services by the Defense Information Systems Agency?

The Defense Information Systems Agency (DISA) historically spends significant amounts on telecommunications services, including wired networks, to support the Department of Defense's global operations. DISA manages and operates a wide range of communication and information systems, making telecommunications a core component of its budget. Historical spending patterns would likely show consistent, substantial investments in network infrastructure, bandwidth, and connectivity solutions. Analyzing past awards, contract vehicles (like Enterprise Infrastructure Solutions - EIS), and overall IT budgets would reveal trends in spending levels, technology adoption, and vendor relationships. This specific $5.2 million award, while notable, is likely part of a much larger, ongoing investment in maintaining robust DoD communication capabilities.

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: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: HC101925QA060

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: $5,230,883

Exercised Options: $5,230,883

Current Obligation: $5,230,883

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline