Verizon Business Keeps DISA Contract

In news that won’t surprise anyone much, Verizon (NYSE:VZ, news, filings) Business has won the DTS-P II contract from DISA, providing network and data services to defense sites in the Expanded Asia Pacific Region.  Why the government needs to expand a region which covers two-thirds of the globe is beyond my ken, but it includes the Caribbean as well.    This will replace the DTS-P contract vehicle, which was of course already held by Verizon Business.  The new contract is worth a maximum of $2.5B over ten years, so it isn’t chump change.  I assume this is not part of the Networx Universal or Enterprise?  Nevertheless, congrats to Verizon Business – government contracts are nice work when you can get them, at least after the first few years of paperwork.

It’s amazing to me though just how many resources are spent on a bidding process that nearly always picks the existing provider.  In this case there was never any doubt, at least in my mind.  After all, it would take anyone else much more capex to build out to replace Verizon which is already there, and nobody wants to spend such capex now.  Not even at&t which was probably the only viable alternative given the travails of Sprint Nextel (NYSE:S, news, filings).  The extent of the international reach would have precluded most other domestic bidders.

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Categories: ILECs, PTTs