DoD's $10.3M Wired Telecommunications Contract with BellSouth: A Deep Dive into Value and Competition

Contract Overview

Contract Amount: $10,292,702 ($10.3M)

Contractor: Bellsouth Telecommunications, LLC

Awarding Agency: Department of Defense

Start Date: 2005-05-26

End Date: 2011-11-01

Contract Duration: 2,350 days

Daily Burn Rate: $4.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: IT

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35801

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $10.3 million to BELLSOUTH TELECOMMUNICATIONS, LLC for work described as: Key points: 1. Analysis indicates fair value for telecommunications services, considering the contract's duration and scope. 2. The contract was awarded under full and open competition, suggesting a competitive pricing environment. 3. Risk indicators appear low, with a fixed-price structure and established contractor. 4. Performance context is within the scope of standard telecommunications infrastructure support. 5. This contract falls within the broader IT and Defense sectors, supporting essential communication needs.

Value Assessment

Rating: fair

The contract's total value of $10.3 million over approximately 6.5 years suggests a reasonable annual expenditure for wired telecommunications services. Benchmarking against similar large-scale telecommunications contracts awarded by the Department of Defense during that period would provide a more precise value-for-money assessment. However, the fixed-price nature with economic price adjustments aims to manage cost fluctuations, offering a degree of predictability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of 3 bidders, as noted, suggests a healthy level of competition for this requirement. This competitive process is expected to drive more favorable pricing and service terms for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: Taxpayers likely benefited from competitive pricing due to the full and open competition, ensuring the government did not overpay for essential telecommunications services.

Public Impact

The Department of the Army, specifically within Alabama, benefits from reliable wired telecommunications infrastructure. Essential communication services are delivered to support military operations and administrative functions. The geographic impact is concentrated in Alabama, where the services are deployed. Workforce implications are likely related to the installation, maintenance, and operation of telecommunications networks.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases due to economic price adjustment clauses, though mitigated by fixed-price structure.
Dependence on a single contractor for a critical infrastructure component could pose a risk if not managed proactively.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
Fixed-price contract type helps control costs and provides budget certainty.
Contract duration of over 6 years suggests a stable, long-term requirement and relationship.

Sector Analysis

This contract operates within the telecommunications sector, specifically focusing on wired infrastructure. The market for such services is characterized by established providers and significant capital investment. The Department of Defense is a major consumer of telecommunications services, often requiring robust and secure networks. Comparable spending benchmarks would involve analyzing other large federal contracts for similar network infrastructure and services, which can range from millions to billions of dollars depending on scale and complexity.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract. Given the nature of large-scale telecommunications infrastructure, it is common for prime contracts to be awarded to larger, established companies. However, the prime contractor, BellSouth Telecommunications, LLC, may have utilized small businesses for subcontracting opportunities to fulfill specific aspects of the contract, though this is not explicitly detailed in the data.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of the Army's contracting and program management offices. Accountability measures would be embedded in the contract's performance standards and delivery requirements. Transparency is generally maintained through contract award databases and reporting mechanisms. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Communications Services
Federal Telecommunications Infrastructure
Wired Network Services
DoD IT Spending

Risk Flags

Potential for cost increases due to economic price adjustment clauses.
Dependence on a single provider for critical infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.3 million to BELLSOUTH TELECOMMUNICATIONS, LLC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is BELLSOUTH TELECOMMUNICATIONS, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $10.3 million.

What is the period of performance?

Start: 2005-05-26. End: 2011-11-01.

What was BellSouth Telecommunications, LLC's track record with the Department of Defense prior to this contract?

BellSouth Telecommunications, LLC, prior to this specific contract, likely had a history of providing telecommunications services to various government entities, including the Department of Defense. While the provided data doesn't detail past performance, large telecommunications companies typically engage in numerous government contracts. A comprehensive review would involve examining historical contract awards, performance evaluations (like Contractor Performance Assessment Reporting System - CPARS), and any past disputes or issues. BellSouth's established presence in the telecommunications industry suggests a foundation of experience, but specific DoD performance metrics would be crucial for a complete assessment of their reliability and capability for this particular award.

How does the $10.3 million contract value compare to similar wired telecommunications contracts awarded by the DoD during the same period?

The $10.3 million contract value for wired telecommunications services over approximately 6.5 years represents an average annual expenditure of roughly $1.58 million. To benchmark this effectively, one would need to compare it against similar contracts awarded by the Department of Defense (DoD) between 2005 and 2011 for comparable services, such as local network infrastructure, voice, and data transmission. Factors like geographic scope, bandwidth requirements, service level agreements, and the specific technologies involved would need to be considered. Without access to a broader dataset of comparable DoD telecommunications contracts from that era, it's challenging to definitively state whether $10.3 million was high, low, or average. However, for a fixed-price contract with economic price adjustments supporting a specific geographic region (Alabama), it appears to be within a plausible range for substantial infrastructure support.

What were the primary risks associated with this contract, and how were they mitigated?

The primary risks associated with this contract likely included potential cost overruns due to the economic price adjustment (EPA) clause, service disruptions impacting military operations, and contractor performance issues. The mitigation strategies employed would have been multifaceted. The fixed-price nature of the contract, combined with the EPA, aimed to balance cost control with the need to account for market fluctuations in telecommunications costs. Performance risks would be managed through defined service level agreements (SLAs), regular performance reviews, and the potential for penalties or contract termination for non-compliance. The use of a well-established contractor like BellSouth, selected through full and open competition, also served as a risk mitigation factor, suggesting a higher likelihood of reliable service delivery based on their industry experience.

How effective was the full and open competition in ensuring value for taxpayers?

The full and open competition employed for this contract is a strong indicator of efforts to ensure value for taxpayers. By allowing any qualified vendor to bid, the government created a competitive environment that typically drives down prices and encourages innovation. The fact that three bids were received suggests sufficient market interest and a reasonable level of competition. This process helps prevent price gouging and ensures that the selected contractor offers terms that are competitive within the market. While the ultimate value is realized through sustained performance and adherence to contract terms, the initial competitive award process is a critical step in securing a favorable outcome for taxpayers.

What is the historical spending pattern for wired telecommunications services by the Department of the Army in Alabama?

Analyzing the historical spending pattern for wired telecommunications services by the Department of the Army in Alabama prior to this $10.3 million contract (2005-2011) would provide crucial context. This would involve examining previous contracts for similar services, their values, durations, and the contractors involved. Understanding whether spending has been consistent, increasing, or decreasing over time, and whether this contract represents a significant shift, is important. For instance, if previous spending was significantly lower, it might indicate an expansion of services or a price increase. Conversely, if it aligns with prior expenditures, it suggests a stable, ongoing requirement. Without access to that specific historical data, it's difficult to ascertain the precise spending trajectory.

Industry Classification

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

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

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

Address: 2180 LAKE BLVD NE, ATLANTA, GA, 90

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $6,242,743

Exercised Options: $1,285,077

Current Obligation: $10,292,702

Contract Characteristics

Cost or Pricing Data: NO

Timeline