SSA's $26.6M Microsoft Software Maintenance Contract with Dell: A Deep Dive into Value and Competition
Contract Overview
Contract Amount: $26,654,372 ($26.7M)
Contractor: Dell Marketing L.P.
Awarding Agency: Social Security Administration
Start Date: 2010-10-23
End Date: 2013-10-22
Contract Duration: 1,095 days
Daily Burn Rate: $24.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: SS00-09-40002 DELL MARKETING LP., MICROSOFT SW MAINTENANCE
Place of Performance
Location: REDMOND, KING County, WASHINGTON, 98052
Plain-Language Summary
Social Security Administration obligated $26.7 million to DELL MARKETING L.P. for work described as: SS00-09-40002 DELL MARKETING LP., MICROSOFT SW MAINTENANCE Key points: 1. Analysis of a significant software maintenance contract awarded to Dell Marketing L.P. for Microsoft products. 2. Examines the contract's duration and fixed-price nature for potential cost predictability. 3. Assesses the competitive landscape for software maintenance agreements of this scale. 4. Highlights the role of the General Services Administration (GSA) Federal Supply Schedule (FSS) in procurement. 5. Contextualizes the spending within the broader IT services sector for government agencies. 6. Identifies potential risks and benefits associated with long-term software maintenance contracts.
Value Assessment
Rating: good
The contract value of $26.6 million over three years for Microsoft software maintenance is substantial. While specific benchmarking data for this exact software suite and maintenance level is not provided, GSA FSS contracts generally offer competitive pricing due to pre-negotiated rates. The firm-fixed-price structure provides cost certainty for the Social Security Administration (SSA), mitigating the risk of cost overruns associated with changing service needs or software updates. Compared to ad-hoc purchases or less competitive solicitations, this BPA likely represents a reasonable value, assuming the negotiated rates on the FSS were competitive at the time of award.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under a full and open competition through the GSA Federal Supply Schedule (FSS). The FSS mechanism itself represents a form of pre-competed contract vehicles, allowing agencies to place orders against established agreements. While the specific number of bidders for this particular BPA call order isn't detailed, the FSS framework generally encourages broad participation from vendors. This competitive foundation aims to ensure that pricing and terms are favorable to the government.
Taxpayer Impact: Full and open competition, especially when leveraged through established schedules like the GSA FSS, generally leads to better price discovery and more favorable terms for taxpayers. It reduces the likelihood of inflated prices that can occur in less competitive environments.
Public Impact
The Social Security Administration (SSA) benefits from continuous access to critical Microsoft software updates and technical support, ensuring the operational integrity of its IT systems. Federal employees within the SSA are provided with the necessary software tools and maintenance to perform their duties effectively. The contract supports the ongoing delivery of essential government services to the public by maintaining the underlying technology infrastructure. This contract indirectly supports the broader IT ecosystem by engaging a major software vendor and potentially its authorized resellers or partners.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in with Microsoft software and maintenance renewals.
- Risk of software obsolescence if maintenance does not keep pace with technological advancements.
- Dependency on a single vendor (Dell) for a critical IT function.
Positive Signals
- Firm-fixed-price contract provides budget certainty.
- Awarded through a competitive GSA schedule, suggesting pre-vetted pricing.
- Ensures continuity of essential software services for a critical government agency.
Sector Analysis
This contract falls within the Information Technology (IT) sector, specifically focusing on software maintenance and support. The market for enterprise software licensing and maintenance is dominated by a few major players, including Microsoft. Government agencies like the SSA are significant consumers of such software. Spending on IT maintenance and support is a substantial portion of federal IT budgets, often managed through large indefinite-delivery, indefinite-quantity (IDIQ) contracts or GSA Schedule vehicles to achieve economies of scale and streamline procurement.
Small Business Impact
The data indicates this contract was awarded to Dell Marketing L.P. and does not specify any small business set-aside provisions or subcontracting goals. While the primary awardee is a large business, the GSA FSS program generally includes opportunities for small businesses to participate as resellers or partners. However, for this specific BPA call, the direct impact on small businesses is not evident from the provided data. Further investigation into Dell's subcontracting plan, if applicable, would be needed to assess broader small business implications.
Oversight & Accountability
The contract was awarded under the GSA Federal Supply Schedule (FSS), which implies a level of pre-award vetting and oversight by GSA. The firm-fixed-price nature of the contract provides a degree of financial oversight by limiting potential cost increases. The Social Security Administration's own contracting office is responsible for day-to-day contract administration and ensuring compliance with the terms and conditions. Inspector General oversight would typically apply to the agency's overall spending and program management, including ensuring the necessity and effective use of such IT maintenance contracts.
Related Government Programs
- GSA Federal Supply Schedule IT Contracts
- Microsoft Software Licensing and Maintenance
- Federal Agency IT Infrastructure Support
- Social Security Administration IT Procurement
Risk Flags
- Long-term contract duration
- Potential for technology obsolescence
- Dependency on a single vendor
Tags
it, software-maintenance, microsoft, dell-marketing-lp, social-security-administration, ssa, gsa-fss, firm-fixed-price, full-and-open-competition, washington-dc-metro, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Social Security Administration awarded $26.7 million to DELL MARKETING L.P.. SS00-09-40002 DELL MARKETING LP., MICROSOFT SW MAINTENANCE
Who is the contractor on this award?
The obligated recipient is DELL MARKETING L.P..
Which agency awarded this contract?
Awarding agency: Social Security Administration (Social Security Administration).
What is the total obligated amount?
The obligated amount is $26.7 million.
What is the period of performance?
Start: 2010-10-23. End: 2013-10-22.
What is the historical spending trend for Microsoft software maintenance at the Social Security Administration?
Analyzing historical spending on Microsoft software maintenance at the SSA would provide crucial context for the $26.6 million awarded to Dell. Without specific historical data, it's difficult to determine if this represents an increase, decrease, or stable level of expenditure. Agencies often consolidate software licenses and maintenance agreements over time to leverage economies of scale and improve management. Understanding past contract vehicles, awardees, and total spending would help assess whether this current contract is cost-effective in the long run and if the SSA is optimizing its software maintenance investments. Trends could also indicate shifts in software usage or the adoption of new technologies.
How does the pricing of this Dell contract compare to other federal agencies purchasing similar Microsoft software maintenance?
Benchmarking the pricing of this $26.6 million contract against similar Microsoft software maintenance agreements across other federal agencies is essential for value assessment. The General Services Administration (GSA) Federal Supply Schedule (FSS) is designed to provide competitive pricing through pre-negotiated rates. However, variations can exist based on the specific software versions, support levels, quantities, and the exact FSS contract vehicle used. Comparing the per-unit costs or overall contract value relative to the duration and scope with data from other agencies procuring comparable Microsoft maintenance services would reveal if the SSA secured favorable terms. A higher-than-average cost could indicate less competitive negotiation or specific support requirements driving up the price.
What are the specific Microsoft software products and maintenance levels covered under this contract?
The provided data indicates the contract is for 'MICROSOFT SW MAINTENANCE' but lacks specifics on the exact software products and the level of maintenance provided. This detail is critical for a comprehensive analysis. For instance, is it for operating systems (like Windows), productivity suites (like Microsoft 365), server software (like Windows Server or SQL Server), or specialized applications? Furthermore, the maintenance level (e.g., standard, premium, 24/7 support, response times) significantly impacts cost and value. Understanding these specifics allows for a more accurate assessment of whether the $26.6 million expenditure is justified by the criticality and scope of the software and support services received by the SSA.
What is Dell Marketing L.P.'s track record in fulfilling federal IT maintenance contracts, particularly for Microsoft software?
Dell Marketing L.P. is a major IT vendor with extensive experience in providing hardware, software, and support services to the federal government. Their track record in fulfilling federal IT maintenance contracts, especially for Microsoft software, is generally robust. As a large, established company, Dell typically has mature processes for contract management, technical support, and customer service. However, a detailed assessment would involve reviewing past performance evaluations, any reported contract disputes or issues, and the timeliness and quality of support provided on previous government contracts. Examining their history specifically with Microsoft software maintenance for agencies of the SSA's size would offer the most relevant insights into their capability and reliability.
What are the potential risks associated with a three-year firm-fixed-price contract for software maintenance?
A three-year firm-fixed-price contract for software maintenance, while offering budget certainty, carries several potential risks. Firstly, technology evolves rapidly; software covered under the contract might become outdated or superseded by newer versions, potentially leading to the SSA paying for maintenance on less relevant technology. Secondly, if the fixed price was negotiated based on certain usage assumptions that change significantly, the SSA might be overpaying for unused maintenance or, conversely, find the fixed price insufficient if usage dramatically increases (though this is less common with maintenance). Thirdly, there's a risk of vendor lock-in, making it difficult and costly to switch to alternative software solutions or maintenance providers during the contract term. Finally, the fixed price might not fully capture the value of evolving support needs or new features released during the contract period.
Industry Classification
NAICS: Retail Trade › Electronics and Appliance Stores › Computer and Software Stores
Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Dell Computer Corporation (UEI: 114315195)
Address: ONE DELL WAY, ROUND ROCK, TX, 90
Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $26,654,372
Exercised Options: $26,654,372
Current Obligation: $26,654,372
Parent Contract
Parent Award PIID: SS000940002
IDV Type: BPA
Timeline
Start Date: 2010-10-23
Current End Date: 2013-10-22
Potential End Date: 2013-10-22 00:00:00
Last Modified: 2011-10-27
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