Agriculture awards $59M for enterprise geospatial software to Environmental Systems Research Institute, Inc

Contract Overview

Contract Amount: $59,071,812 ($59.1M)

Contractor: Environmental Systems Research Institute, Inc.

Awarding Agency: Department of Agriculture

Start Date: 2023-07-01

End Date: 2028-06-30

Contract Duration: 1,826 days

Daily Burn Rate: $32.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: 23IT40-CIO-002 - ENTERPRISE GEOSPATIAL SOFTWARE

Place of Performance

Location: REDLANDS, SAN BERNARDINO County, CALIFORNIA, 92373

State: California Government Spending

Plain-Language Summary

Department of Agriculture obligated $59.1 million to ENVIRONMENTAL SYSTEMS RESEARCH INSTITUTE, INC. for work described as: 23IT40-CIO-002 - ENTERPRISE GEOSPATIAL SOFTWARE Key points: 1. Contract value represents a significant investment in foundational software capabilities. 2. Sole awardee suggests a focused procurement, potentially limiting broader market engagement. 3. Long duration indicates a strategic, long-term need for these services. 4. Firm Fixed Price contract type shifts cost risk to the contractor. 5. Geospatial software is critical for land management, resource planning, and environmental monitoring. 6. The contract's value is substantial within the context of enterprise software procurements.

Value Assessment

Rating: good

The contract value of approximately $59 million over five years for enterprise geospatial software appears reasonable given the specialized nature of the product and the vendor's market position. Benchmarking against similar large-scale enterprise software licenses and support contracts suggests this price point is within expected ranges for a leading provider. The firm fixed-price structure provides cost certainty for the agency, although it may not reflect the absolute lowest possible price achievable through more aggressive competition or alternative solutions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The fact that only one award was made suggests that Environmental Systems Research Institute, Inc. (ESRI) was the most advantageous offer, potentially due to its dominant market share in enterprise geospatial software, unique capabilities, or superior technical proposal. The level of competition, while open, resulted in a single award, which warrants further examination of the evaluation criteria and the competitive landscape.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value, even if it results in a single award to a specialized vendor. The open competition ensures that the government explored available options, potentially driving down costs compared to a sole-source award.

Public Impact

Federal agencies, particularly within the Department of Agriculture, will benefit from enhanced geospatial analysis capabilities. The software will support critical functions such as land use planning, natural resource management, agricultural research, and disaster response. The contract's geographic impact is nationwide, supporting operations across all USDA facilities and programs. Workforce implications include the need for trained personnel to utilize and manage the advanced geospatial software.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in due to the specialized nature of enterprise geospatial software.
Risk of cost overruns if the fixed-price contract does not adequately account for all future needs or unforeseen complexities.
Dependence on a single vendor for critical software infrastructure could pose supply chain risks.

Positive Signals

Award to a well-established vendor with a proven track record in geospatial solutions.
Firm Fixed Price contract provides budget certainty for the agency.
Long-term contract duration suggests a strategic alignment with agency needs.

Sector Analysis

The enterprise geospatial software market is a significant segment within the broader software industry, dominated by a few key players offering comprehensive platforms. ESRI is a recognized leader in this space, providing tools for data visualization, analysis, and management. This contract fits within the government's ongoing need for robust data management and analytical capabilities to support policy, operations, and research across various agencies. Comparable spending benchmarks for enterprise software licenses and support can range from tens to hundreds of millions of dollars, depending on the scope and user base.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. The award to a large, established vendor like ESRI suggests that the primary focus was on acquiring specialized enterprise software capabilities rather than promoting small business participation through this specific procurement vehicle. Future analysis could explore whether ESRI has existing small business subcontracting plans or if opportunities exist within the broader ecosystem of geospatial services.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and program managers within the Department of Agriculture's Office of the Chief Financial Officer. Accountability measures are embedded in the firm fixed-price contract terms, requiring the delivery of specified software and services. Transparency is facilitated through federal procurement databases where contract awards are publicly reported. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Geographic Information System (GIS) Software
Enterprise Resource Planning (ERP) Software
Data Analytics Platforms
Cloud-Based Software Solutions
Software Licenses and Maintenance

Risk Flags

Potential for vendor lock-in
Long-term contract duration requires careful performance monitoring
Sole awardee in a competitive process warrants review of evaluation criteria

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $59.1 million to ENVIRONMENTAL SYSTEMS RESEARCH INSTITUTE, INC.. 23IT40-CIO-002 - ENTERPRISE GEOSPATIAL SOFTWARE

Who is the contractor on this award?

The obligated recipient is ENVIRONMENTAL SYSTEMS RESEARCH INSTITUTE, INC..

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 $59.1 million.

What is the period of performance?

Start: 2023-07-01. End: 2028-06-30.

What is Environmental Systems Research Institute, Inc.'s track record with federal contracts, particularly for enterprise geospatial software?

Environmental Systems Research Institute, Inc. (ESRI) has a long and extensive history of contracting with the U.S. federal government, consistently securing awards for its industry-leading geospatial software and services. Data from federal procurement databases indicates numerous awards across various agencies, including the Department of the Interior, Department of Defense, and NASA, often for large-scale enterprise deployments. These contracts typically involve licensing of their ArcGIS platform, associated software extensions, training, and technical support. ESRI's consistent presence and significant contract values underscore its established position as a primary provider of geospatial solutions to the federal government, suggesting a strong track record of delivery and capability.

How does the awarded price of approximately $59 million compare to similar enterprise geospatial software contracts?

The awarded price of approximately $59 million over five years for enterprise geospatial software is substantial but falls within the expected range for large-scale, enterprise-wide deployments of specialized software from a market leader like ESRI. Similar contracts with other federal agencies for comprehensive ArcGIS enterprise licenses, including advanced capabilities and support, have often reached similar or higher figures, particularly when factoring in user counts, modules, and multi-year commitments. For instance, contracts for enterprise GIS solutions can easily run into the tens of millions annually for large agencies. The firm fixed-price nature of this award provides cost certainty, but a detailed benchmark would require comparing specific software modules, user counts, and service levels against other recent federal awards.

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

The primary risks associated with this contract include potential vendor lock-in due to the specialized nature of ESRI's geospatial software, the possibility of cost escalation if the firm fixed-price contract doesn't fully anticipate future needs, and reliance on a single vendor for critical infrastructure. Mitigation strategies include the initial full and open competition process, which aimed to secure the best value and ensure the chosen solution met defined requirements. The firm fixed-price contract itself shifts cost risk to the contractor. Furthermore, the long-term nature of the contract implies a strategic decision by the agency, suggesting that the benefits of a standardized, robust geospatial platform outweigh the risks of vendor dependence. Ongoing contract management and performance monitoring will be crucial.

How effective is the firm fixed-price contract type in ensuring value for money for this geospatial software acquisition?

The firm fixed-price (FFP) contract type is generally effective in ensuring value for money for software acquisitions like this one, as it establishes a ceiling on the government's cost liability. By agreeing on a fixed price upfront, the contractor assumes the risk of cost overruns, incentivizing them to manage their expenses efficiently. This provides budget certainty for the Department of Agriculture. For value for money, the effectiveness hinges on the thoroughness of the initial requirements definition and the competitive process that determined the initial price. If the requirements were well-defined and the competition robust, the FFP structure helps lock in a competitive price. However, if requirements evolve significantly, change orders could potentially increase costs, diminishing some of the FFP benefits.

What are the historical spending patterns for enterprise geospatial software within the Department of Agriculture?

Historical spending patterns for enterprise geospatial software within the Department of Agriculture (USDA) likely show a consistent and significant investment in GIS capabilities, reflecting the agency's core mission related to land, resources, and agriculture. Prior contracts would have supported various GIS platforms and services, potentially including previous versions or components of ESRI's offerings, as well as other specialized geospatial tools. The USDA's extensive use of geospatial data for land management, crop analysis, environmental monitoring, and rural development necessitates ongoing investment. This $59 million award suggests a consolidation or upgrade of enterprise-level capabilities, potentially representing an increase or a strategic shift in spending towards a unified, modern platform to meet evolving data needs and analytical requirements.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: BOOKS, MAPS, OTHER PUBLICATIONS

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

Address: 380 NEW YORK STREET, REDLANDS, CA, 92373

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

Financial Breakdown

Contract Ceiling: $97,021,940

Exercised Options: $59,071,812

Current Obligation: $59,071,812

Actual Outlays: $59,071,812

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F253CA

IDV Type: FSS

Timeline