USDA awards $295M for Salesforce software and support, with CARAHSOFT TECHNOLOGY CORP as the primary contractor

Contract Overview

Contract Amount: $294,798,841 ($294.8M)

Contractor: Carahsoft Technology Corp

Awarding Agency: Department of Agriculture

Start Date: 2020-06-19

End Date: 2025-06-19

Contract Duration: 1,826 days

Daily Burn Rate: $161.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: USDA DISC ENTERPRISE WIDE SALESFORCE SOFTWARE&SUPPORT SERVICES

Place of Performance

Location: KANSAS CITY, JACKSON County, MISSOURI, 64114

State: Missouri Government Spending

Plain-Language Summary

Department of Agriculture obligated $294.8 million to CARAHSOFT TECHNOLOGY CORP for work described as: USDA DISC ENTERPRISE WIDE SALESFORCE SOFTWARE&SUPPORT SERVICES Key points: 1. The contract value of $294.8 million over five years represents a significant investment in enterprise-wide software solutions. 2. Full and open competition was utilized, suggesting a robust market response and potential for competitive pricing. 3. The contract is structured as Firm Fixed Price, which shifts cost risk to the contractor. 4. Performance is measured over a 1826-day period, indicating a long-term commitment to the chosen solution. 5. The North American Industry Classification System (NAICS) code 541519 points to 'Other Computer Related Services,' a broad category. 6. The award was a Delivery Order, implying it was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar framework.

Value Assessment

Rating: good

The contract's total value of $294.8 million over five years averages to approximately $59 million annually. Benchmarking this against similar large-scale enterprise software deployments for federal agencies is challenging without more specific service details. However, the firm fixed-price structure suggests that the agency has negotiated a defined cost for the services, which can be advantageous if the scope remains stable. The absence of specific performance metrics or detailed cost breakdowns makes a precise value-for-money assessment difficult, but the competitive award process is a positive indicator.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This approach typically fosters a competitive environment, encouraging multiple vendors to offer their best pricing and solutions. The fact that it was a delivery order suggests it might have been placed against an existing IDIQ contract that itself was competed. The number of bidders is not specified, but the 'full and open' designation implies a significant number of potential offerors participated.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces and encouraging innovation. It ensures that the government is not locked into a single vendor and can leverage the most cost-effective solutions available.

Public Impact

Federal employees across the Department of Agriculture will benefit from enhanced Salesforce software and support, improving operational efficiency. The services delivered include software licensing, maintenance, and technical support for a critical enterprise-wide system. The geographic impact is nationwide, as the USDA operates across all states and territories. Workforce implications include potential training needs for users and IT support staff on the Salesforce platform.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if Salesforce becomes deeply integrated across USDA systems without clear exit strategies.
Reliance on a single software platform (Salesforce) could pose risks if the vendor experiences significant business disruptions or price increases.
The broad NAICS code 'Other Computer Related Services' might obscure the specific nature of the support provided, making detailed oversight challenging.

Positive Signals

The use of a widely adopted enterprise software solution like Salesforce suggests a commitment to modernizing IT infrastructure.
The firm fixed-price contract structure provides cost certainty for the government.
Awarding under full and open competition indicates a deliberate effort to secure competitive pricing and a wide range of potential solutions.

Sector Analysis

The federal IT services market is vast and highly competitive. This contract falls within the software and IT support services sector, which is a significant portion of government IT spending. Salesforce is a dominant player in the Customer Relationship Management (CRM) and enterprise software space. The USDA's investment aligns with a broader government trend towards cloud-based solutions and enterprise-wide platforms to improve data management and operational efficiency. Comparable spending benchmarks would typically involve looking at other large federal agencies' investments in similar CRM or enterprise software suites.

Small Business Impact

The provided data indicates that small business participation (sb) is false, and there is no specific small business set-aside mentioned (ss is false). This suggests that the contract was not specifically targeted towards small businesses. CARAHSOFT TECHNOLOGY CORP is a reseller, and while they may work with small business subcontractors, the primary award itself does not appear to have a small business focus. This could mean that larger prime contractors or established resellers dominated the competitive landscape for this particular requirement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Agriculture's Office of the Chief Financial Officer and its respective contracting and program management offices. The firm fixed-price nature of the contract provides a degree of accountability, as the contractor is responsible for delivering the specified software and support within the agreed-upon budget. Transparency is facilitated by the public nature of federal contract awards, though detailed performance reports may not always be publicly accessible. The Inspector General's office for the USDA would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Federal Cloud Computing Strategy
IT Modernization Fund
Enterprise Software Licensing Agreements
Salesforce Government Cloud

Risk Flags

Potential for scope creep in long-term fixed-price contracts.
Reliance on a single vendor's technology roadmap.
Need for robust change management processes.
Ensuring adequate technical support and maintenance over the contract duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $294.8 million to CARAHSOFT TECHNOLOGY CORP. USDA DISC ENTERPRISE WIDE SALESFORCE SOFTWARE&SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is CARAHSOFT TECHNOLOGY CORP.

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 $294.8 million.

What is the period of performance?

Start: 2020-06-19. End: 2025-06-19.

What is the track record of CARAHSOFT TECHNOLOGY CORP in delivering similar large-scale federal IT contracts, particularly involving Salesforce?

CARAHSOFT TECHNOLOGY CORP is a prominent reseller of IT solutions to the U.S. public sector. They frequently partner with software vendors like Salesforce to fulfill government requirements. Their business model often involves leveraging existing government-wide acquisition contracts (GWACs) or IDIQ vehicles to provide software licenses and support. While CARAHSOFT itself is not typically the direct developer or implementer of the core technology, their role as a prime contractor involves managing the overall delivery, ensuring compliance, and handling the contractual relationship. Their extensive experience in the federal market suggests a strong understanding of procurement processes and government needs. However, the specific performance details and customer satisfaction metrics for their Salesforce-related contracts would require deeper investigation into individual contract performance reports and agency feedback.

How does the annual cost of this contract compare to similar enterprise software deployments in other federal agencies?

The annual cost for this USDA contract averages approximately $59 million ($294.8M / 5 years). Comparing this directly to 'similar' enterprise software deployments is complex due to variations in scope, specific software modules, user counts, support levels, and the overall IT ecosystem of different agencies. Large federal agencies often invest tens to hundreds of millions of dollars in enterprise resource planning (ERP), CRM, or cloud infrastructure solutions. For instance, agencies like the Department of Defense or the General Services Administration have awarded contracts in the hundreds of millions for comprehensive IT systems. The $59 million annual figure for Salesforce software and support appears substantial, consistent with enterprise-wide deployments for a large department like Agriculture, but a precise benchmark requires detailed comparison of service level agreements (SLAs), user licenses, and included functionalities across agencies.

What are the primary risks associated with a five-year firm fixed-price contract for software and support services?

A primary risk with a five-year firm fixed-price contract for software and support is scope creep. If the USDA's requirements evolve significantly beyond the initial scope defined in the contract, the contractor may be hesitant to accommodate these changes without additional funding, potentially leading to disputes or the need for contract modifications. Conversely, if the contractor underestimates the effort or costs involved in providing the support over five years, they could incur losses. Another risk is technological obsolescence; while Salesforce is a leading platform, five years is a long time in IT, and the specific version or support level might become less optimal. Ensuring robust change management processes and clear definitions of 'support' are crucial to mitigate these risks.

What is the expected impact of this contract on the USDA's operational effectiveness and data management capabilities?

This contract is expected to significantly enhance the USDA's operational effectiveness by providing a unified, modern platform for managing customer relationships, sales processes, and potentially other departmental functions that can be supported by Salesforce's suite of tools. Improved data management capabilities are a key anticipated outcome. A centralized Salesforce instance allows for better data aggregation, analysis, and reporting, leading to more informed decision-making. This can streamline workflows, improve inter-departmental collaboration, and provide a clearer view of program performance and constituent interactions. Ultimately, this should enable the USDA to serve its mission more efficiently and effectively across its various programs and services.

How has USDA's spending on Salesforce software and support evolved over time prior to this award?

Information regarding USDA's historical spending specifically on Salesforce software and support prior to this $294.8 million award is not directly available in the provided data snippet. This award, dated June 19, 2020, with an end date of June 19, 2025, represents a significant, multi-year commitment. To understand the evolution of spending, one would need to analyze historical contract databases (like USASpending.gov) for previous awards to CARAHSOFT TECHNOLOGY CORP or directly to Salesforce for the USDA, looking for similar service descriptions and contract values over preceding years. It's possible this represents a consolidation of previous, smaller contracts or a new strategic investment in the platform.

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: SEWP 156843

Offers Received: 1

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: $294,798,841

Exercised Options: $294,798,841

Current Obligation: $294,798,841

Actual Outlays: $294,290,728

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC27B

IDV Type: GWAC

Timeline