USDA Spends $80.3M on Microsoft Software via Dell Federal Systems

Contract Overview

Contract Amount: $80,332,157 ($80.3M)

Contractor: Dell Federal Systems L.P

Awarding Agency: Department of Agriculture

Start Date: 2020-04-09

End Date: 2021-09-30

Contract Duration: 539 days

Daily Burn Rate: $149.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: USDA OCIO ENTERPRISE WIDE MICROSOFT SOFTWARE

Place of Performance

Location: ROUND ROCK, WILLIAMSON County, TEXAS, 78682

State: Texas Government Spending

Plain-Language Summary

Department of Agriculture obligated $80.3 million to DELL FEDERAL SYSTEMS L.P for work described as: USDA OCIO ENTERPRISE WIDE MICROSOFT SOFTWARE Key points: 1. Significant expenditure on enterprise-wide software licenses. 2. Competition was full and open, suggesting potential for competitive pricing. 3. Risk of vendor lock-in with Microsoft products. 4. IT services sector with a focus on software procurement.

Value Assessment

Rating: fair

The total award amount of $80.3M for Microsoft software over 17 months appears high. Benchmarking against similar enterprise-wide software agreements is needed to assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is positive for price discovery. However, the specific impact on pricing for this Microsoft software is unclear without further analysis.

Taxpayer Impact: Taxpayer funds are being used for enterprise software licenses. The value for money achieved through this competitive process will determine the ultimate taxpayer impact.

Public Impact

Ensures USDA employees have access to necessary Microsoft software for operations. Supports the agency's IT infrastructure and digital transformation efforts. Potential for cost savings if negotiated effectively under competition.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High dollar value contract
Reliance on a single software vendor (Microsoft)

Positive Signals

Full and open competition utilized
Clear contract period

Sector Analysis

This procurement falls within the IT sector, specifically software licensing and related services. Benchmarks for similar enterprise-wide software agreements are crucial for assessing cost-effectiveness.

Small Business Impact

The data indicates this contract was not awarded to small businesses. Further investigation would be needed to determine if small business participation was sought or achieved through subcontracting.

Oversight & Accountability

Oversight is managed by the USDA's Office of the Chief Financial Officer. The contract type (firm fixed price) and delivery order structure suggest defined terms, but ongoing monitoring is essential.

Related Government Programs

Other Computer Related Services
Department of Agriculture Contracting
Office of the Chief Financial Officer Programs

Risk Flags

High contract value
Potential for vendor lock-in
Lack of specific software details
No indication of small business subcontracting

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $80.3 million to DELL FEDERAL SYSTEMS L.P. USDA OCIO ENTERPRISE WIDE MICROSOFT SOFTWARE

Who is the contractor on this award?

The obligated recipient is DELL FEDERAL SYSTEMS L.P.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Office of the Chief Financial Officer).

What is the total obligated amount?

The obligated amount is $80.3 million.

What is the period of performance?

Start: 2020-04-09. End: 2021-09-30.

What is the specific breakdown of Microsoft software licenses procured and their intended use across USDA agencies?

The provided data does not detail the specific Microsoft software titles or the distribution plan across USDA agencies. Understanding the exact software suite (e.g., Office 365, Windows licenses, server software) and its deployment is critical for assessing operational necessity and potential for consolidation or optimization.

How does the per-unit cost of these Microsoft licenses compare to government-wide enterprise agreements or commercial market rates?

Without specific license counts and types, a direct per-unit cost comparison is difficult. However, the $80.3M award over 17 months suggests a substantial investment. Benchmarking against GSA schedules or other large-scale government agreements for similar Microsoft products is essential to determine if competitive pricing was achieved.

What measures are in place to mitigate vendor lock-in and ensure future flexibility with Microsoft software?

The contract's full and open competition is a positive step. However, long-term reliance on Microsoft products inherently creates some vendor lock-in. USDA should have strategies for regular contract reviews, exploring open-source alternatives where feasible, and ensuring favorable terms for future renewals or transitions.

Industry Classification

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

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

Solicitation ID: 12314420Q0020

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Dell Technologies Inc.

Address: 1 DELL WAY, ROUND ROCK, TX, 78682

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $86,199,477

Exercised Options: $80,332,157

Current Obligation: $80,332,157

Actual Outlays: $80,332,157

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F0884P

IDV Type: FSS

Timeline