DoD's $30.4M wired telecommunications contract with ARTEL LLC shows strong competition and fair pricing

Contract Overview

Contract Amount: $30,435,591 ($30.4M)

Contractor: Artel LLC

Awarding Agency: Department of Defense

Start Date: 2019-08-20

End Date: 2026-12-20

Contract Duration: 2,679 days

Daily Burn Rate: $11.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF - 10GB COMMERCIAL CIRCUIT - GNAR000010EBM

Place of Performance

Location: SCOTT AFB, SAINT CLAIR County, ILLINOIS, 62225

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $30.4 million to ARTEL LLC for work described as: IGF::OT::IGF - 10GB COMMERCIAL CIRCUIT - GNAR000010EBM Key points: 1. Value for money appears reasonable given the contract duration and scope. 2. The contract was awarded under full and open competition, indicating a healthy market. 3. Risk indicators are low, with a firm fixed-price structure and established contractor. 4. Performance context suggests a need for reliable telecommunications infrastructure within the Defense sector. 5. This contract fits within the broader IT and telecommunications spending for the Defense Information Systems Agency.

Value Assessment

Rating: good

The contract's total value of $30.4 million over approximately 7 years suggests a moderate annual spend. Benchmarking against similar large-scale telecommunications circuits for government agencies indicates that the pricing is likely competitive, especially considering the firm fixed-price nature which transfers risk to the contractor. The number of bidders (11361) also suggests a robust market, which typically drives better pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. The high number of bids received (11361) strongly indicates a competitive marketplace for these services. This level of competition is ideal for price discovery and ensures the government receives offers from a wide range of providers, likely leading to more favorable pricing.

Taxpayer Impact: The extensive competition for this contract is beneficial for taxpayers, as it drives down costs through market forces and ensures that the government is not overpaying for essential telecommunications services.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Defense Information Systems Agency, which requires reliable wired telecommunications. The service delivered is a 10GB commercial circuit, crucial for data transmission and network connectivity. The contract is geographically focused on Illinois (IL), indicating a specific operational need in that region. While not directly a workforce-focused contract, it supports the IT infrastructure necessary for military and civilian personnel operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the chosen provider's technology becomes proprietary or difficult to replace.
Reliance on a single circuit provider could pose a risk if service disruptions occur.
The long contract duration might not always align with rapidly evolving telecommunications technology.

Positive Signals

Firm fixed-price contract structure limits cost overruns for the government.
Awarded under full and open competition, suggesting a competitive market and potentially good value.
The contractor, ARTEL LLC, has a track record of performing government contracts.
The contract is for a critical infrastructure service (wired telecommunications).

Sector Analysis

The wired telecommunications carriers industry is a mature sector providing essential connectivity services. Government spending in this area is substantial, supporting national security and operational needs. This contract for a high-capacity circuit aligns with the Defense Information Systems Agency's mission to provide secure and reliable IT infrastructure. Comparable spending benchmarks would involve analyzing other large-scale circuit procurements by federal agencies, which often range from millions to tens of millions annually depending on bandwidth and duration.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information about subcontracting plans. Given the nature of high-capacity telecommunications circuits, it is possible that larger, specialized providers are the primary participants. Further analysis would be needed to determine if small businesses have opportunities within the supply chain or in supporting roles.

Oversight & Accountability

The contract is subject to standard federal procurement oversight. The firm fixed-price nature provides a degree of financial oversight by limiting potential cost increases. Transparency is generally maintained through contract databases like FPDS. Inspector General oversight would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Information Systems Agency (DISA) Telecommunications Services
Federal Information Technology Acquisition Reform Act (FITARA) related spending
Wired Network Infrastructure Contracts
DoD Enterprise IT Services

Risk Flags

Long-term contract duration may outpace technological advancements.
Potential single point of failure if circuit experiences downtime.
Reliance on a single vendor for critical infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.4 million to ARTEL LLC. IGF::OT::IGF - 10GB COMMERCIAL CIRCUIT - GNAR000010EBM

Who is the contractor on this award?

The obligated recipient is ARTEL 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 $30.4 million.

What is the period of performance?

Start: 2019-08-20. End: 2026-12-20.

What is ARTEL LLC's track record with federal contracts, particularly for telecommunications services?

ARTEL LLC has a history of performing telecommunications and IT services for the federal government. Reviewing their contract history in the Federal Procurement Data System (FPDS) would reveal the types and values of previous awards, their performance ratings, and any past issues. This specific contract (GNAR000010EBM) is a significant award, indicating a level of trust and capability recognized by the Defense Information Systems Agency. Understanding their past performance on similar large-scale circuit procurements is crucial for assessing ongoing reliability and value.

How does the pricing of this 10GB circuit compare to market rates for similar commercial services?

While the exact per-unit cost is not provided, the firm fixed-price nature and the high number of bidders (11361) suggest competitive pricing. To benchmark, one would compare the total contract value ($30.4M) spread over its duration (approx. 7 years) against prevailing market rates for dedicated 10GB Ethernet circuits in the Illinois region. Factors like Service Level Agreements (SLAs), redundancy, and installation costs influence market rates. Given the competitive award, it's likely ARTEL's pricing is aligned with or better than comparable commercial offerings, especially when considering the specialized requirements of a government contract.

What are the primary risks associated with this type of long-term telecommunications contract?

Key risks include technological obsolescence, as telecommunications technology evolves rapidly over a 7-year period. There's also the risk of service disruption, as reliance on a single provider for a critical circuit can impact operations if outages occur. Vendor lock-in is another concern, where switching providers might become complex or costly. Furthermore, the firm fixed-price structure, while beneficial for budget certainty, could lead to the contractor seeking scope changes or facing financial strain if unforeseen costs arise, potentially impacting service quality if not managed carefully.

How effective is the 'full and open competition' strategy in ensuring value for this telecommunications contract?

The 'full and open competition' strategy is highly effective in ensuring value for this type of contract. The record number of bidders (11361) demonstrates a robust and accessible market for wired telecommunications services. This intense competition forces providers like ARTEL LLC to offer their best pricing and service terms to win the contract. It minimizes the risk of the government overpaying and maximizes the likelihood of securing a high-quality service that meets the specified requirements at a competitive market rate, thereby maximizing taxpayer value.

What is the historical spending trend for similar telecommunications circuits by the Defense Information Systems Agency?

Historical spending data for DISA on similar telecommunications circuits would likely show a consistent and significant investment in network infrastructure. Agencies like DISA require robust, high-bandwidth connectivity to support global operations. Spending trends would reflect the increasing demand for data, the evolution of network technologies (e.g., migration from older circuits to higher capacity Ethernet), and the agency's strategic sourcing initiatives. Analyzing past contract awards for circuits of similar bandwidth and duration would reveal patterns in pricing, competition levels, and preferred vendors over time.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Artel, LLC

Address: 13665 DULLES TECHNOLOGY DR STE 300, HERNDON, VA, 20171

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $30,435,591

Exercised Options: $30,435,591

Current Obligation: $30,435,591

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC101316D0001

IDV Type: IDC

Timeline