DoD awards $14.2M to Verizon for Wired Telecommunications Carriers services over 10 years

Contract Overview

Contract Amount: $14,195,807 ($14.2M)

Contractor: Verizon Business Network Services LLC

Awarding Agency: Department of Defense

Start Date: 2009-09-23

End Date: 2020-05-01

Contract Duration: 3,873 days

Daily Burn Rate: $3.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: VZBZ000081EBM

Place of Performance

Location: ASHBURN, LOUDOUN County, VIRGINIA, 20147

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $14.2 million to VERIZON BUSINESS NETWORK SERVICES LLC for work described as: VZBZ000081EBM Key points: 1. Significant contract value awarded to a major telecommunications provider. 2. Competition method was full and open, suggesting potential for competitive pricing. 3. Long contract duration (10 years) may introduce risk of price escalation or obsolescence. 4. Spending falls within the IT sector, specifically telecommunications infrastructure.

Value Assessment

Rating: fair

The contract value of $14.2 million over 10 years averages to $1.42 million annually. Benchmarking against similar large-scale telecommunications contracts is difficult without specific service details, but the duration suggests potential for price increases over time.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically allows for the widest range of potential bidders and can lead to more competitive pricing. The delivery order structure suggests flexibility in service deployment.

Taxpayer Impact: Taxpayer funds are being used for essential telecommunications infrastructure supporting the Department of Defense. The competitive award aims to ensure reasonable pricing, but the long term could still present cost challenges.

Public Impact

Ensures critical communication infrastructure for national defense. Supports ongoing operations of the Defense Information Systems Agency. Potential for long-term reliance on a single provider for core services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (10 years) may lead to price increases or outdated technology.
Lack of specific service details makes precise value assessment challenging.
Potential for vendor lock-in given the nature of telecommunications infrastructure.

Positive Signals

Awarded under full and open competition.
Supports critical defense communication needs.
Firm fixed price contract provides some cost certainty.

Sector Analysis

This contract falls under the Information Technology sector, specifically focusing on wired telecommunications carriers. Spending in this area is crucial for government operations, but can be subject to rapid technological change and evolving market prices.

Small Business Impact

This contract was awarded to Verizon Business Network Services LLC, a large corporation. There is no indication that small businesses were involved as prime contractors or significant subcontractors in this specific award.

Oversight & Accountability

The contract was awarded by the Defense Information Systems Agency, which is responsible for managing and securing DoD information systems. Oversight would focus on service delivery, performance, and adherence to contract terms over the 10-year period.

Related Government Programs

Wired Telecommunications Carriers
Department of Defense Contracting
Defense Information Systems Agency Programs

Risk Flags

Long contract duration (10 years) increases risk of price escalation and technology obsolescence.
Lack of detailed service scope makes precise value assessment difficult.
Potential for vendor lock-in with critical infrastructure.
Limited visibility into small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.2 million to VERIZON BUSINESS NETWORK SERVICES LLC. VZBZ000081EBM

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 $14.2 million.

What is the period of performance?

Start: 2009-09-23. End: 2020-05-01.

What specific telecommunications services are included in this contract, and how do they align with current and future DoD needs?

The contract is for Wired Telecommunications Carriers (NAICS 517110), which generally includes services like local, long-distance, and toll-free telephone services, as well as broadband internet access via wired networks. Given the 10-year duration, the DoD likely needs to ensure these services remain relevant and adaptable to evolving technological requirements and operational demands, potentially through robust service level agreements and technology refresh clauses.

How does the firm fixed price structure mitigate risks associated with potential cost overruns or price escalations over the 10-year term?

A firm fixed price contract provides a set price for the defined scope of work, offering significant cost certainty to the government. However, over a 10-year period, the risk of price escalation due to inflation, market shifts, or increased operational costs for the vendor is still present. The government's ability to mitigate this relies on the initial pricing being competitive and potentially incorporating clauses for periodic reviews or adjustments if specific market conditions are met.

What is the potential impact on small businesses within the telecommunications sector from this large, long-term award to a major provider?

This large contract awarded to Verizon may limit opportunities for smaller telecommunications companies to compete for this specific DoD business. While full and open competition theoretically allows any qualified bidder, the scale and duration often favor established, large providers with extensive resources and existing infrastructure. Small businesses might find opportunities as subcontractors if Verizon chooses to leverage their services, but direct prime contract awards are less likely.

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: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Verizon Communications Inc (UEI: 107212169)

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: $14,195,807

Exercised Options: $14,195,807

Current Obligation: $14,195,807

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC101909D2000

IDV Type: IDC

Timeline