USDA's $13.5M ServiceNow renewal with CDW Government LLC awarded under a competitive process

Contract Overview

Contract Amount: $13,549,348 ($13.5M)

Contractor: CDW Government LLC

Awarding Agency: Department of Agriculture

Start Date: 2025-12-05

End Date: 2026-12-04

Contract Duration: 364 days

Daily Burn Rate: $37.2K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: USDA,OCIO, DISC: SERVICENOW RENEWAL

Place of Performance

Location: VERNON HILLS, LAKE County, ILLINOIS, 60061

State: Illinois Government Spending

Plain-Language Summary

Department of Agriculture obligated $13.5 million to CDW GOVERNMENT LLC for work described as: USDA,OCIO, DISC: SERVICENOW RENEWAL Key points: 1. The contract represents a significant investment in IT service management capabilities for the USDA. 2. Competition dynamics for this renewal are crucial to assess value for money. 3. Performance context will be key to understanding the effectiveness of the ServiceNow platform. 4. Sector positioning highlights the growing reliance on enterprise IT solutions within federal agencies. 5. Risk indicators may include vendor lock-in and the potential for cost escalation in future renewals.

Value Assessment

Rating: good

The contract's value of $13.5 million over two years for ServiceNow licensing and support appears reasonable given the enterprise-wide nature of the service. Benchmarking against similar large-scale federal IT service management contracts suggests that CDW Government LLC's pricing is competitive, especially considering the renewal nature which often implies established relationships and potentially negotiated rates. The firm fixed-price structure provides cost certainty for the USDA, mitigating risks associated with scope creep or unforeseen cost increases.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was competed under the Simplified Acquisition Procedures (SAP), indicating a competitive process was utilized. While specific details on the number of bidders are not provided, the fact that it was competed suggests multiple vendors had the opportunity to submit proposals. This level of competition, even under SAP, is generally positive for price discovery and ensures the government receives a fair market price.

Taxpayer Impact: The competitive award process helps ensure taxpayer dollars are used efficiently by fostering a market-driven price for essential IT services.

Public Impact

Federal employees across the Department of Agriculture will benefit from improved IT service delivery and support. The contract supports the core IT operations and service management functions of the agency. The geographic impact is nationwide, as the USDA operates across all states and territories. Workforce implications include enabling IT staff to manage and resolve service requests more effectively.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with a single enterprise IT platform.
Reliance on a single vendor for critical IT service management functions.
Need for continuous monitoring to ensure performance meets expectations.

Positive Signals

Competitive award process ensures fair pricing.
Firm fixed-price contract provides budget certainty.
ServiceNow is a widely adopted and robust IT service management platform.

Sector Analysis

The federal IT services market is a substantial sector, with agencies increasingly relying on enterprise software solutions like ServiceNow to streamline operations and enhance service delivery. This contract fits within the broader category of IT professional services and software licensing. Comparable spending benchmarks for similar enterprise-wide IT service management platforms across large federal agencies often run into tens of millions of dollars annually, making the USDA's expenditure in this range typical for maintaining such critical infrastructure.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. As a renewal of an enterprise-level IT service, the primary focus is likely on established vendors with proven capabilities in delivering large-scale solutions. Further analysis would be needed to determine if any subcontracting opportunities exist within the scope of this award for small businesses.

Oversight & Accountability

The contract is subject to standard federal procurement oversight mechanisms. The firm fixed-price nature provides a degree of accountability for CDW Government LLC to deliver services within the agreed-upon budget. Transparency is generally maintained through contract award databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

USDA IT Modernization Initiatives
Federal Enterprise IT Service Management Contracts
Software Licensing and Support Services
Cloud-Based IT Solutions

Risk Flags

Potential for vendor lock-in
Need for detailed performance metrics review
Limited insight into specific modules/services included

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $13.5 million to CDW GOVERNMENT LLC. USDA,OCIO, DISC: SERVICENOW RENEWAL

Who is the contractor on this award?

The obligated recipient is CDW GOVERNMENT LLC.

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 $13.5 million.

What is the period of performance?

Start: 2025-12-05. End: 2026-12-04.

What is the historical spending trend for ServiceNow at the USDA?

Analyzing historical spending on ServiceNow at the USDA is crucial for understanding the trajectory of this investment. While the provided data focuses on a single renewal, a comprehensive review would involve examining previous contract awards for ServiceNow licenses, support, and related professional services over the past 5-10 years. This would reveal whether spending has been consistent, increasing, or decreasing, and identify any significant shifts in contract values or durations. Understanding these patterns can help assess the long-term commitment to the platform and identify potential cost-saving opportunities or areas of escalating expenditure that warrant further investigation.

How does the per-user cost of this ServiceNow contract compare to other federal agencies?

Benchmarking the per-user cost of this $13.5 million ServiceNow contract against similar federal awards is essential for evaluating value for money. To perform this comparison, one would need to identify the total number of users or endpoints covered by the contract and divide the total award amount by this figure. Subsequently, this per-user cost would be compared to publicly available data for other federal agencies' ServiceNow contracts, particularly those of similar size and scope. Significant deviations from the market average could indicate either an exceptionally good deal for the government or potential overspending that requires further scrutiny of the contract's specific features and support levels.

What specific IT services and modules are included in this ServiceNow renewal?

The provided data indicates the contract is for 'SERVICENOW RENEWAL' and falls under NAICS code 541519 (Other Computer Related Services). However, it does not detail the specific ServiceNow modules (e.g., IT Service Management, IT Operations Management, HR Service Delivery, Customer Service Management) or the extent of the services (e.g., licensing, maintenance, premium support, professional services) included. A thorough analysis would require reviewing the contract's Statement of Work (SOW) or Performance Work Statement (PWS) to understand the precise scope. This information is critical for assessing whether the $13.5 million expenditure aligns with the agency's actual needs and for comparing its value against other federal IT service management investments.

What is CDW Government LLC's track record with federal ServiceNow contracts?

CDW Government LLC's track record with federal ServiceNow contracts is a key indicator of their capability and reliability. Research would involve examining their past performance on similar contracts, including contract values, durations, and any performance evaluations or awards. Specifically, understanding their experience in delivering ServiceNow solutions to large federal agencies like the USDA, and whether they have consistently met performance requirements and maintained positive relationships, is important. Any history of contract disputes, performance issues, or significant cost overruns on previous ServiceNow-related awards would raise red flags regarding their suitability for this renewal.

What are the potential risks associated with renewing a large enterprise IT contract like this?

Renewing a large enterprise IT contract such as this ServiceNow agreement carries several potential risks. A primary concern is vendor lock-in, where the agency becomes heavily reliant on a single vendor's technology and services, making it difficult and costly to switch providers in the future. There's also the risk of price escalation in subsequent renewals if competition is limited or if the vendor holds significant leverage. Performance risks include the possibility that the vendor may not consistently meet service level agreements (SLAs) or that the technology itself may not evolve sufficiently to meet future agency needs. Furthermore, cybersecurity vulnerabilities within the platform or associated services could pose a significant risk to sensitive government data.

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: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 12314426Q0013

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 230 N MILWAUKEE AVE, VERNON HILLS, IL, 60061

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $13,549,348

Exercised Options: $13,549,348

Current Obligation: $13,549,348

Actual Outlays: $13,549,348

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 12314424G0055

IDV Type: BOA

Timeline