Is CenturyLink’s $1.6 Billion Interior Department Award Just the Beginning?

The U.S. Department of the Interior has awarded CenturyLink Inc. (NYSE: CTL) a task order valued at $1.6 billion to help the agency modernize and secure network services. The order covers two areas: managing core network services and managed access services, including secure cloud connectivity and Wi-Fi.

The task order, along with 11 one-year renewal options, runs through 2032.

In its announcement of the award, CenturyLink said that it was the first supplier to receive an authority to operate under the federal General Services Administration’s 5-year, $50 billion Enterprise Infrastructure Solutions (EIS) program. EIS is an indefinite-delivery, indefinite-quantity program that extends General Services Administration telecommunications services contracts.

Once a company is approved for participation in the EIS program, federal agencies are allowed to update their IT and telecom infrastructure by placing task orders directly on any of nine approved contract firms. The EIS program has so far approved nine prime contractors: CenturyLink, AT&T, Verizon’s Federal division, BT Federal, Harris (now L3Harris), Core Technologies, MicroTech and MetTel.

The authority to operate to CenturyLink, announced in March of last year, was the first under the EIS program. The company’s first task order under the program was awarded in April last year to provide core backbone network services with speeds of up to 100 Gigabits per second to NASA over a period of nine and a half years. The task order has a ceiling of $11.4 million, according to a report in Washington Technology.

CenturyLink stock traded up about 4% early Thursday, at $13.59 in a 52-week range of $9.64 to $16.06. The 12-month consensus price target on the stock is $12.91. CenturyLink pays a dividend yield of 7.66%, based on the current share price.

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