EOP awards $9.1M for Salesforce licenses to Carahsoft, highlighting IT service needs

Contract Overview

Contract Amount: $9,121,289 ($9.1M)

Contractor: Carahsoft Technology Corp

Awarding Agency: Executive Office of the President

Start Date: 2024-07-31

End Date: 2026-07-30

Contract Duration: 729 days

Daily Burn Rate: $12.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SALESFORCE LICENSES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20503

State: District of Columbia Government Spending

Plain-Language Summary

Executive Office of the President obligated $9.1 million to CARAHSOFT TECHNOLOGY CORP for work described as: SALESFORCE LICENSES Key points: 1. The contract value represents a significant investment in customer relationship management software. 2. Competition was robust, suggesting a healthy market for these types of IT services. 3. The fixed-price nature of the contract helps mitigate cost overrun risks. 4. Performance duration extends over two years, indicating a need for sustained support. 5. This spending aligns with broader government trends towards cloud-based software solutions. 6. The award to Carahsoft, a reseller, suggests a focus on efficient procurement channels.

Value Assessment

Rating: good

The contract value of $9.1 million for Salesforce licenses appears reasonable given the duration and scope of IT services typically required for enterprise-level deployments. Benchmarking against similar government contracts for CRM software indicates that pricing is generally competitive. The firm fixed-price structure provides cost certainty for the Executive Office of the President (EOP).

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with six bidders vying for the opportunity. The presence of multiple bidders suggests a competitive marketplace for Salesforce licensing and related IT services. This level of competition is generally favorable for price discovery and ensuring the government receives a fair market price.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that drives down costs and ensures value for money on essential IT services.

Public Impact

The Executive Office of the President (EOP) will benefit from enhanced customer relationship management capabilities. Essential IT services and software licenses will be provided to support EOP operations. The contract's impact is concentrated in Washington D.C., the seat of federal government operations. The contract supports the IT workforce involved in managing and utilizing Salesforce platforms.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if future needs are highly specific to Salesforce.
Reliance on a reseller (Carahsoft) may introduce an additional layer in the supply chain.

Positive Signals

Awarded through full and open competition, indicating broad market engagement.
Firm fixed-price contract structure provides cost predictability.
Longer contract duration suggests a stable, ongoing need for the services.

Sector Analysis

The market for Customer Relationship Management (CRM) software, particularly enterprise solutions like Salesforce, is substantial within the federal IT sector. Government agencies increasingly rely on these platforms for managing constituent interactions, internal workflows, and data analysis. Spending benchmarks for similar federal IT service contracts often range from several million to tens of millions of dollars annually, depending on the agency size and specific requirements.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. While Carahsoft Technology Corp is a large business, they often work with small business partners for subcontracting. Further analysis would be needed to determine if any subcontracting opportunities exist for small businesses within this award.

Oversight & Accountability

The contract is subject to standard federal procurement oversight. The Executive Office of the President is responsible for monitoring performance and ensuring compliance with contract terms. Transparency is maintained through federal contract databases like FPDS. The Inspector General for the EOP would have jurisdiction over any potential fraud, waste, or abuse related to this award.

Related Government Programs

Federal Civilian IT Services
Cloud Computing Services
Software Licensing and Support
Customer Relationship Management Systems

Risk Flags

Potential for cost creep if scope changes significantly.
Dependence on a single vendor's technology roadmap.
Need for robust internal IT governance to ensure effective utilization.

Frequently Asked Questions

What is this federal contract paying for?

Executive Office of the President awarded $9.1 million to CARAHSOFT TECHNOLOGY CORP. SALESFORCE LICENSES

Who is the contractor on this award?

The obligated recipient is CARAHSOFT TECHNOLOGY CORP.

Which agency awarded this contract?

Awarding agency: Executive Office of the President (Executive Office of the President).

What is the total obligated amount?

The obligated amount is $9.1 million.

What is the period of performance?

Start: 2024-07-31. End: 2026-07-30.

What is Carahsoft Technology Corp's track record with federal government contracts, particularly for software licensing?

Carahsoft Technology Corp is a prominent government IT solutions provider and reseller, consistently ranking among the top federal contractors. They specialize in providing a wide range of software licenses and IT hardware to federal agencies, often through advantageous reseller agreements with major technology companies like Salesforce. Their track record includes numerous awards across various agencies for similar IT products and services. They leverage their extensive experience in navigating federal procurement processes to offer competitive pricing and efficient delivery, making them a frequent choice for agencies seeking established IT solutions.

How does the $9.1 million contract value compare to other federal Salesforce implementations?

The $9.1 million contract value for Salesforce licenses over approximately two years is within the expected range for federal agency deployments of this scale. Larger agencies or those with more complex customization and integration needs often award contracts in the tens of millions of dollars. Smaller or more focused implementations, like this one for the Executive Office of the President, typically fall within the single-digit to low double-digit millions. The firm fixed-price nature and the number of bidders suggest that this value is competitive for the services rendered.

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

Key risks include potential vendor lock-in with Salesforce, where the EOP might become overly dependent on a single vendor, making future transitions costly. Another risk could be underutilization of the licenses if not properly managed or integrated into workflows. Mitigation strategies include the firm fixed-price contract, which caps costs, and the competitive bidding process, which encourages value. Furthermore, the EOP's internal IT management and oversight are crucial for ensuring proper adoption and maximizing the return on investment, alongside potential future competitions for alternative solutions.

How effective is the full and open competition process in ensuring value for this Salesforce contract?

The full and open competition process is highly effective in ensuring value for this Salesforce contract. By allowing all responsible sources to submit bids, the government maximizes the potential for receiving competitive offers. The presence of six bidders indicates a robust market response, which typically drives down prices and encourages innovation. This competitive pressure incentivizes contractors to offer their best pricing and terms to win the award. Consequently, the EOP is likely to secure favorable pricing and terms, leading to better value for taxpayer dollars compared to less competitive procurement methods.

What is the historical spending trend for Salesforce or similar CRM software within the Executive Office of the President?

Historical spending data for the Executive Office of the President (EOP) on Salesforce or similar CRM software would provide crucial context. Without specific historical data for the EOP, we can infer trends from broader federal IT spending. Agencies have increasingly adopted cloud-based CRM solutions like Salesforce over the past decade to modernize operations and improve constituent engagement. Spending in this category has generally seen an upward trend across government as agencies recognize the benefits of integrated data and streamlined workflows. This $9.1M award suggests a continued investment in such capabilities within the EOP.

What are the implications of awarding this contract to Carahsoft Technology Corp, a reseller?

Awarding the contract to Carahsoft Technology Corp, a reseller, implies that the EOP is leveraging established procurement channels known for efficiency and potentially better pricing through volume agreements. Carahsoft acts as an intermediary, sourcing the Salesforce licenses from the manufacturer. This approach can simplify the acquisition process for the government, as Carahsoft manages the licensing details and often provides value-added services. However, it also means the final price includes a reseller margin. The competitive bidding process ensures that even with a reseller, the price remains fair and competitive within the market.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 11316024Q0020OAS

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 11493 SUNSET HILLS RD, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $9,679,454

Exercised Options: $9,121,289

Current Obligation: $9,121,289

Actual Outlays: $9,100,437

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC27B

IDV Type: GWAC

Timeline