Interior's $13.3M Verizon contract for cell service lacked competition, raising value concerns
Contract Overview
Contract Amount: $13,267,680 ($13.3M)
Contractor: Verizon Federal Inc.
Awarding Agency: Department of the Interior
Start Date: 2008-11-03
End Date: 2012-07-31
Contract Duration: 1,366 days
Daily Burn Rate: $9.7K/day
Competition Type: NOT COMPETED UNDER SAP
Sector: Other
Official Description: CELL PHONE CONSOLIDATION- VERIZON
Place of Performance
Location: DENVER, JEFFERSON County, COLORADO, 80225
State: Colorado Government Spending
Plain-Language Summary
Department of the Interior obligated $13.3 million to VERIZON FEDERAL INC. for work described as: CELL PHONE CONSOLIDATION- VERIZON Key points: 1. The contract was awarded without competition, limiting potential cost savings. 2. Pricing was not benchmarked against market rates, making value assessment difficult. 3. The duration of the contract (over 3 years) suggests a long-term need for services. 4. The specific services provided are essential for agency operations in Colorado. 5. The award method indicates a potential lack of proactive market research. 6. No small business set-aside was utilized, potentially limiting opportunities for smaller providers.
Value Assessment
Rating: questionable
The total value of $13.3 million for telecommunications services over approximately three years is difficult to assess without competitive pricing. As this was a sole-source award, there's no direct comparison to other bids to determine if the price was optimal. Benchmarking against similar government contracts for cell service or comparing Verizon's commercial rates for comparable plans would be necessary to ascertain true value for money. The lack of competition inherently introduces a risk of overpayment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded to Verizon Federal Inc. without competition, indicated by 'NOT COMPETED UNDER SAP'. This suggests that the agency did not solicit offers from multiple vendors. The lack of a competitive bidding process means that the government did not benefit from the price discovery that typically occurs when multiple companies vie for a contract. This approach can lead to higher costs for the government.
Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without a bidding process, there is no assurance that the selected vendor offered the best possible price or terms.
Public Impact
Federal employees within the Bureau of Land Management (BLM) in Colorado benefit from reliable cell phone services. Essential communication services are delivered, supporting daily operations and emergency response. The geographic impact is focused on the state of Colorado, where BLM operates. The contract supports the telecommunications workforce employed by Verizon.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition increases risk of paying above market rates.
- Absence of a competitive process limits transparency in pricing.
- Long contract duration without re-competition may not reflect evolving market prices.
- No indication of performance metrics or service level agreements in the provided data.
Positive Signals
- Awarded to a known entity (Verizon Federal Inc.) potentially ensuring service continuity.
- Contract supports essential operational needs for a federal agency.
- The BPA Call award mechanism suggests it might be part of a larger framework agreement, potentially offering some efficiencies.
Sector Analysis
This contract falls within the Wired Telecommunications Carriers sector, a segment of the broader telecommunications industry. This sector involves the provision of communication services over wired networks, including mobile and landline telephony. Government spending in this area is substantial, supporting agency operations nationwide. Comparable spending benchmarks are difficult to establish without knowing the exact service package, but agencies often consolidate services to achieve economies of scale, though this contract's sole-source nature limits such gains.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Consequently, there were no specific provisions to encourage or mandate subcontracting opportunities for small businesses. This means that the full value of the contract likely flowed to a large prime contractor, potentially bypassing the small business ecosystem.
Oversight & Accountability
Oversight mechanisms for this contract are not detailed in the provided data. As a sole-source award, it may have undergone less scrutiny than a competed contract. Transparency is limited due to the lack of public bidding information. Accountability would typically be managed through contract performance management by the Bureau of Land Management, but specific oversight bodies like an Inspector General's jurisdiction would depend on agency policies and the nature of any potential issues.
Related Government Programs
- Federal Telecommunications Services
- Agency-Specific Communication Contracts
- Bureau of Land Management Operational Support
- Verizon Federal Inc. Government Contracts
Risk Flags
- Lack of Competition
- Potential for Overpricing
- Limited Transparency
- No Small Business Utilization
Tags
telecommunications, wired-telecommunications-carriers, department-of-the-interior, bureau-of-land-management, colorado, sole-source, bpa-call, large-contract, non-competed, verizon
Frequently Asked Questions
What is this federal contract paying for?
Department of the Interior awarded $13.3 million to VERIZON FEDERAL INC.. CELL PHONE CONSOLIDATION- VERIZON
Who is the contractor on this award?
The obligated recipient is VERIZON FEDERAL INC..
Which agency awarded this contract?
Awarding agency: Department of the Interior (Bureau of Land Management).
What is the total obligated amount?
The obligated amount is $13.3 million.
What is the period of performance?
Start: 2008-11-03. End: 2012-07-31.
What was the specific justification for awarding this contract to Verizon without competition?
The provided data indicates the contract was 'NOT COMPETED UNDER SAP' (Small Purchase Exception). While SAP typically refers to purchases under the simplified acquisition threshold, the total value here exceeds that. The lack of explicit justification suggests potential reasons could include urgency, lack of available alternatives, or a pre-existing relationship that was deemed sufficient. However, without further documentation from the agency, the precise rationale remains unclear. Government regulations generally require competition unless specific exceptions apply, such as the existence of only one responsible source. A detailed justification would typically be documented in the contract file.
How does the per-user cost compare to industry benchmarks for similar government cell phone plans?
The provided data does not include the number of users or the specific service plans included in the $13.3 million contract. Therefore, calculating a meaningful per-user cost is impossible. To perform such a comparison, one would need details on the number of lines, data allowances, voice minutes, and any included features. Benchmarking against publicly available government cell phone rate schedules (like GSA schedules) or analyzing Verizon's commercial offerings for comparable business plans would be necessary. Given the sole-source nature, it is unlikely that the price reflects the most competitive per-user rate achievable.
What are the potential risks associated with a sole-source award for telecommunications services?
The primary risk of a sole-source award for telecommunications services is the potential for inflated costs. Without competitive bidding, the vendor faces less pressure to offer the lowest possible price. This can lead to the government paying more than necessary for the services received. Additionally, sole-source contracts can limit innovation, as agencies may not be exposed to alternative technologies or service providers that could offer better value or performance. There's also a risk of vendor lock-in, making it difficult and costly to switch providers in the future.
What was the historical spending pattern for cell phone services by the Bureau of Land Management prior to this contract?
The provided data snippet focuses on a single contract awarded in 2008 and ending in 2012. It does not offer insight into the Bureau of Land Management's (BLM) historical spending patterns for cell phone services before or after this specific contract. To understand historical trends, one would need to analyze multiple contract awards over a longer period, potentially across different vendors and contract types. This would involve searching federal procurement databases for all relevant telecommunications contracts awarded to the BLM or its parent agency, the Department of the Interior.
Were there any performance issues or contract modifications during the life of this agreement?
The provided data summary does not include details on contract performance, modifications, or any issues that may have arisen during the contract's period of performance (November 3, 2008, to July 31, 2012). Such information would typically be found in contract line item details, modification records, or performance reports within the agency's contract management system. Without access to these records, it's impossible to assess whether the contractor met expectations or if the contract terms were altered.
Industry Classification
NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers
Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES
Competition & Pricing
Extent Competed: NOT COMPETED UNDER SAP
Solicitation Procedures: ONLY ONE SOURCE
Evaluated Preference: NONE
Contractor Details
Parent Company: Verizon Communications Inc
Address: 22001 LOUDOUN COUNTY PKWY STE C 2 1, ASHBURN, VA, 20147
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $13,267,680
Exercised Options: $13,267,680
Current Obligation: $13,267,680
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: IND07PA60042
IDV Type: BPA
Timeline
Start Date: 2008-11-03
Current End Date: 2012-07-31
Potential End Date: 2012-07-31 00:00:00
Last Modified: 2022-04-01
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