VA awarded AT&T $29M for wired telecom services, a significant portion of its IT infrastructure

Contract Overview

Contract Amount: $28,974,535 ($29.0M)

Contractor: AT&T Enterprises, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2014-10-01

End Date: 2015-09-30

Contract Duration: 364 days

Daily Burn Rate: $79.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: NETWORX ORDER, IGF::OT::IGF

Place of Performance

Location: STERLING, LOUDOUN County, VIRGINIA, 20165

State: Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $29.0 million to AT&T ENTERPRISES, LLC for work described as: NETWORX ORDER, IGF::OT::IGF Key points: 1. Contract value represents a substantial investment in essential communication infrastructure. 2. Competition dynamics suggest a potentially competitive bidding process for this service. 3. Performance period is relatively short, indicating potential for frequent re-competition or adjustments. 4. This contract falls within the broader IT services sector, crucial for agency operations. 5. The fixed-price contract type aims to control costs and provide budget certainty.

Value Assessment

Rating: good

The $29 million award for wired telecommunications carriers is a significant investment. Benchmarking against similar contracts for large federal agencies reveals that this amount is within expected ranges for comprehensive network services. The firm-fixed-price structure suggests an effort to manage costs effectively. While specific performance metrics are not detailed here, the price appears reasonable given the scope of services typically associated with wired telecommunications for a major agency like the VA.

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 bids. The specific number of bidders is not provided, but this procurement method generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. The VA's commitment to full and open competition suggests a desire to leverage the broadest possible market.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it maximizes the potential for cost savings through a wide range of bids and encourages innovation among vendors.

Public Impact

Veterans Affairs (VA) personnel benefit from reliable and robust wired telecommunications services, essential for daily operations and patient care. The contract supports the delivery of critical IT infrastructure services across the VA's network. Services are likely to have a nationwide impact, supporting VA facilities across the country. This contract supports jobs within the telecommunications sector, particularly for AT&T employees involved in network maintenance and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if services are highly specialized or integrated.
Dependence on a single large provider for critical infrastructure could pose risks.
Ensuring ongoing competitive pricing in future contract renewals will be key.

Positive Signals

Awarded under full and open competition, suggesting a robust market.
Firm-fixed-price contract provides cost certainty for the agency.
AT&T is a well-established provider with significant experience in federal contracts.

Sector Analysis

Wired telecommunications carriers are a fundamental part of the IT infrastructure sector, providing the backbone for data transmission and communication. This contract fits within the broader telecommunications services market, which is characterized by significant investment in network infrastructure and ongoing technological advancements. Comparable spending benchmarks for federal agencies often show substantial allocations to telecommunications, reflecting its critical role in supporting agency operations and national security.

Small Business Impact

While this contract was awarded to AT&T Enterprises, LLC, a large prime contractor, there is no explicit indication of a small business set-aside. However, large federal contracts often include subcontracting requirements. It is possible that AT&T will engage small businesses for specific components or services related to this contract, contributing to the small business ecosystem. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

The Department of Veterans Affairs has established oversight mechanisms for its contracts, including performance monitoring and financial accountability. Inspector General jurisdiction likely applies to this contract, ensuring that funds are used appropriately and that services meet contractual obligations. Transparency is generally maintained through contract databases and reporting requirements, allowing for public scrutiny of federal spending.

Related Government Programs

General Services Administration (GSA) Schedules
Other Transaction Authority (OTA) Agreements
Information Technology Enterprise Solutions (ITES)
Network Services Contracts

Risk Flags

Potential for vendor lock-in
Cybersecurity risks associated with critical infrastructure
Dependence on a single provider for essential services

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $29.0 million to AT&T ENTERPRISES, LLC. NETWORX ORDER, IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is AT&T ENTERPRISES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $29.0 million.

What is the period of performance?

Start: 2014-10-01. End: 2015-09-30.

What is AT&T's track record with the VA and other federal agencies for similar telecommunications services?

AT&T has a long-standing and extensive track record of providing telecommunications and IT services to the Department of Veterans Affairs (VA) and numerous other federal agencies. Their experience spans decades, encompassing a wide range of services from basic voice and data transmission to complex network integration and cybersecurity solutions. Historically, AT&T has been a significant player in major federal telecommunications vehicles, such as GSA schedules and specific agency-wide contracts. While specific performance ratings for this particular contract are not detailed, AT&T's overall performance with the federal government is generally characterized by its capacity to handle large-scale, mission-critical requirements. However, like any large contractor, there can be instances of performance issues or contract disputes that are documented in federal contract databases and performance assessment reports.

How does the $29 million award compare to the VA's historical spending on wired telecommunications?

The $29 million award for this specific contract represents a significant, but not necessarily anomalous, portion of the VA's overall spending on wired telecommunications. The VA, as one of the largest federal agencies, has substantial and ongoing needs for robust communication infrastructure to support its vast network of hospitals, clinics, and administrative facilities nationwide. Historical spending patterns for the VA in this category typically run into hundreds of millions of dollars annually, encompassing various contracts for different types of telecommunications services, including wired, wireless, and data services. This $29 million award likely represents a specific delivery order or a focused contract for a defined period and scope, fitting within the broader, continuous investment the VA makes in its IT backbone. To provide a precise comparison, one would need to analyze the VA's total telecommunications budget and spending across all relevant contracts over several fiscal years.

What are the primary risks associated with a contract of this magnitude for wired telecommunications?

The primary risks associated with a contract of this magnitude for wired telecommunications include potential vendor lock-in, where the agency becomes heavily reliant on a single provider, making future transitions costly and complex. There's also the risk of service disruptions if the provider experiences technical failures or security breaches, which could significantly impact VA operations and patient care. Cost escalation is another risk, particularly if the firm-fixed-price contract doesn't adequately account for unforeseen technological changes or increased demand, although the fixed-price nature aims to mitigate this. Furthermore, ensuring the contractor maintains adequate cybersecurity measures to protect sensitive veteran data is paramount. Finally, the risk of underperformance or failure to meet service level agreements, despite the fixed-price structure, could necessitate costly corrective actions or contract disputes.

How effective is the firm-fixed-price contract type in ensuring value for money for this type of service?

The firm-fixed-price (FFP) contract type is generally considered effective in ensuring value for money for services like wired telecommunications, especially when the scope of work is well-defined and risks are manageable. FFP shifts most of the risk to the contractor, incentivizing them to control costs and deliver the specified services efficiently to maximize their profit. For the VA, this means greater budget certainty, as the price is fixed regardless of the contractor's actual costs. This structure encourages the contractor to be efficient and innovative in their service delivery. However, the value for money is contingent on the initial price being competitive and the contract terms clearly defining the required services and performance standards. If the scope is not well-defined or if unforeseen technical challenges arise, the contractor might be less motivated to go beyond the minimum requirements, potentially limiting innovation or requiring change orders.

What are the implications of this contract being awarded under 'full and open competition' for the VA and taxpayers?

Awarding this contract under 'full and open competition' has several positive implications for both the VA and taxpayers. For the VA, it means access to a wider pool of potential vendors, increasing the likelihood of selecting a contractor that offers the best combination of price, technical capability, and service quality. This competitive process typically drives down prices as vendors vie for the contract, leading to cost savings for the VA. For taxpayers, this translates directly into more efficient use of public funds. Full and open competition fosters a market where innovation is rewarded, and providers are incentivized to offer competitive solutions. It also promotes transparency and fairness in the procurement process, reducing the risk of favoritability and ensuring that contracts are awarded based on merit and value.

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: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: AT&T Inc. (UEI: 108024050)

Address: 1900 GALLOWS ROAD, VIENNA, VA, 22182

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $28,974,535

Exercised Options: $28,974,535

Current Obligation: $28,974,535

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS00T07NSD0007

IDV Type: IDC

Timeline