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AT&T Cost And Price Cost And Price Essay

AT&T Cost and Price Cost and Price Analysis -- AT&T

Company Overview

The AT&T Government Solutions business is currently headquartered in Oakton, VA and is composed of over four thousand scientists, engineers, and analysts; many of which have already obtained the needed security clearance to work more sensitive projects (AT&T Government, 2012). The company's niche is focused on providing a range of IT managed solutions that include network leadership in voice, data, video, and managed services. The company previously operated under the name GRC International which was originally founded in 1961 (Bloomberg Business, 2012). However the name was changed to AT&T Government Solutions, Inc. In March of 2000 and operates as a subsidiary of AT&T Inc.

AT&T Government Solutions received a majority of its work from the defense industry in 2011 which represented close to three hundred eighty million dollars' worth of revenue. By contrast, the civilian sector represented nearly one hundred eighty million dollars' worth of revenue for the company. Although these figures represent a small fragment of the total revenue stream generated by the parent company, AT&T Inc., the division still represents a significant contribution to the company. Furthermore, the industry has the potential for growth in the future and AT&T Government Solutions is also poised to increase its market share.

Figure 1 - AT&T Government Solutions 2011 Revenues (Washington Technology, 2012)

AT&T Government Solutions ONE Contract

AT&T Government Solutions has been recently awarded an Omnibus Network Enterprise (ONE) contract from the United States Government (Telecom News, 2012). The U.S. Government Omnibus Network Enterprise (USG ONE) contract vehicle provides the Defense Information Systems Agency (DISA), the Department of Defense (DoD), and all other Government agencies with a convenient...

The contract has the potential to be worth approximately four hundred seventy six million dollars over the next five years however the contract period is only one year with the option to renew it with one year options. AT&T was chosen for this contract based on their experience, price, and especially their ability to provide a comprehensive solution to the IT needs.
AT&T Government Solutions will incur a range of indirect costs when performing the duties required in the contract. Since the company is a provider of telecommunication services, one substantial fixed cost will be the infrastructure required to provide these services. This could any number of items ranging from cellular towers to fiber optic lines. Furthermore, AT&T Government Solutions will also have to build or purchase several facilities devoted to managing its contract as well as the equipment need for employees to service the infrastructure built that in turn services the government.

Since the contract is incredibly comprehensive and covers so many different facets of IT related goods and services, there will also be a broad range of direct costs. For example, the IT consulting can be considered a direct cost because…

Sources used in this document:
Works Cited

AT&T Government. (2012). About AT&T Government Solutions. Retrieved from AT&T Government: http://www.corp.att.com/gov/about_ags/

Bloomberg Business. (2012). Company Overview of AT&T Government Solutions, Inc. Retrieved from Bloomberg Business: http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=111209

Booz Allen. (2012, Feburary 7). U.S. Government Omnibus Network Enterprise (USG ONE). Retrieved from Booz Allen: http://www.boozallen.com/media/file/02.078.12-usg-one.pdf

Fisher, J., & Peters, R. (2010). Using Stock Returns to Identify Government Spending Shocks. The Economic Journal, 414-436.
Francis, P., Golden, M., & Woods, W. (2010, January 20). Defense Acquisitions: Managing Risk to Achieve Better Outcomes. Retrieved from GOVERNMENT ACCOUNTABILITY OFFICE: http://oai.dtic.mil/oai/oai?verb=getRecord&metadataPrefix=html&identifier=ADA514511
iStock Analyst. (2012, March 6). AT&T (T) Government Solutions Gets Omnibus Network Enterprise Contract. Retrieved from iStock Analyst: http://www.istockanalyst.com/finance/story/5711117/at-t-t-government-solutions-gets-omnibus-network-enterprise-contract
Telecom News. (2012, March 6). Omnibus Network Enterprise Contract Awarded to AT&T Government Solutions. Retrieved from Telecom News: http://vartips.com/carriers/att/omnibus-network-enterprise-contract-awarded-att-government-solutions-2101.html
Wang, C., & San Miguel, J. (2010, February 8). The Excessive Profits of Defense Contractors: Evidence and Determinants. Retrieved from Information for the Defense Community: http://oai.dtic.mil/oai/oai?verb=getRecord&metadataPrefix=html&identifier=ADA558985
Washington Technology. (2012). 46: AT&T Inc. Retrieved from Washington Technology: http://washingtontechnology.com/toplists/top-100-lists/2010/att-inc.aspx?admgarea=TOP100_2011
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