Commerce Department's $29M Microsoft Software BPA Call with Dell Federal Systems shows long-term IT support needs

Contract Overview

Contract Amount: $29,020,018 ($29.0M)

Contractor: Dell Federal Systems L.P

Awarding Agency: Department of Commerce

Start Date: 2018-06-29

End Date: 2023-05-31

Contract Duration: 1,797 days

Daily Burn Rate: $16.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF MICROSOFT SOFTWARE

Place of Performance

Location: SUITLAND, PRINCE GEORGES County, MARYLAND, 20746

State: Maryland Government Spending

Plain-Language Summary

Department of Commerce obligated $29.0 million to DELL FEDERAL SYSTEMS L.P for work described as: IGF::OT::IGF MICROSOFT SOFTWARE Key points: 1. This contract represents a significant, long-term investment in IT infrastructure, indicating a sustained need for software and related services. 2. The firm-fixed-price structure suggests a predictable cost model, though potential for cost overruns exists if scope expands beyond initial estimates. 3. The use of a BPA Call implies a pre-negotiated framework, potentially streamlining procurement but requiring careful management to ensure continued value. 4. While Dell Federal Systems is a large contractor, the specific nature of Microsoft software suggests a specialized IT support requirement. 5. The contract's duration of nearly five years highlights the ongoing reliance on these IT assets and services for departmental operations. 6. The absence of small business set-aside flags indicates this was not specifically targeted to smaller enterprises, potentially limiting broader ecosystem participation.

Value Assessment

Rating: fair

Benchmarking the value of this specific Microsoft software BPA Call is challenging without detailed service breakdowns and comparable market data for similar long-term agreements. The $29 million over nearly five years suggests an average annual spend of approximately $5.8 million. This figure needs to be compared against the total IT spending of the Department of Commerce and similar agencies for similar software licensing and support to assess if it represents a competitive price point. The firm-fixed-price nature provides cost certainty, but the true value depends on the efficiency and effectiveness of the services delivered and the actual software utilized.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The use of a BPA Call suggests that a broader Basic Ordering Agreement (BOA) or similar master agreement was previously competed, and this specific call order was then placed against it. The level of competition for the underlying BOA would be a key factor in determining price discovery. For this specific call, the number of bidders is not provided, but the 'full and open' designation implies a competitive process was initiated.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation. It ensures that the government is not locked into a single provider without exploring alternatives, potentially leading to better value for public funds.

Public Impact

Department of Commerce employees across various offices benefit from reliable access to essential Microsoft software and related IT support. The contract ensures the continuity of critical IT services, enabling the department to carry out its mission of promoting economic growth and opportunity. The services delivered likely include software licensing, maintenance, technical support, and potentially integration services for Microsoft products. The geographic impact is likely nationwide, supporting Commerce Department operations across its various bureaus and field offices. Workforce implications include ensuring IT staff have the necessary tools and support to maintain and manage the department's software infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long-term reliance on a single vendor for critical software could create vendor lock-in, making future transitions more complex and costly.
The firm-fixed-price contract may not fully account for potential fluctuations in software licensing costs or evolving support needs over the contract period.
Without detailed performance metrics, it's difficult to assess the ongoing value-for-money and ensure optimal service delivery.
The BPA Call mechanism, while efficient, requires diligent oversight to ensure it continues to yield competitive pricing and meet evolving requirements.

Positive Signals

The use of a full and open competition framework for the underlying agreement suggests a commitment to leveraging market competition for IT procurement.
The firm-fixed-price contract provides cost predictability for a significant portion of the department's IT software budget.
The long duration indicates a stable and reliable IT support structure, crucial for consistent departmental operations.
Awarding to a known entity like Dell Federal Systems, which has experience with government contracts, can imply a degree of reliability and established processes.

Sector Analysis

This contract falls within the broader Information Technology (IT) sector, specifically focusing on software licensing, maintenance, and support. The market for enterprise software and IT services is vast and highly competitive, with major players like Microsoft dominating the operating system and productivity software landscape. Government agencies are significant consumers of these services, often procuring through large-scale agreements like Basic Ordering Agreements (BOAs) or Indefinite Delivery/Indefinite Quantity (IDIQ) contracts. Spending benchmarks for similar IT support contracts within federal agencies can range from millions to hundreds of millions of dollars annually, depending on the agency's size and IT complexity.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. This means the primary award was not specifically targeted towards small businesses. While Dell Federal Systems is a large entity, there might be opportunities for small businesses to participate as subcontractors if Dell chooses to engage them. However, the contract's structure and the nature of large-scale software agreements often favor established prime contractors with extensive resources and existing relationships.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Commerce's contracting officers and program managers responsible for IT procurement and management. They would monitor performance against the contract terms, ensure compliance with federal acquisition regulations, and manage any modifications or task orders issued under the BPA Call. Transparency is facilitated through contract databases like FPDS, which provide basic award information. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.

Related Government Programs

General Services Administration (GSA) IT Schedule 70
Department of Defense Enterprise Software Initiative (ESI)
NASA Solutions for Enterprise-Wide Procurement (SEWP)
Cloud Computing Services Contracts

Risk Flags

Long-term contract duration may limit flexibility.
Potential for vendor lock-in with reliance on specific software.
Need for ongoing market research to ensure competitive pricing.
Firm-fixed-price may not cover all evolving software needs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $29.0 million to DELL FEDERAL SYSTEMS L.P. IGF::OT::IGF 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 Commerce (Office of the Secretary).

What is the total obligated amount?

The obligated amount is $29.0 million.

What is the period of performance?

Start: 2018-06-29. End: 2023-05-31.

What is the specific breakdown of software and services procured under this BPA Call, and how does it align with the Department of Commerce's current IT modernization goals?

The provided data indicates the contract is for 'MICROSOFT SOFTWARE' under NAICS code 541519 (Other Computer Related Services) and was awarded as a BPA Call. However, it does not detail the specific Microsoft products (e.g., Windows licenses, Office 365 subscriptions, server software) or the exact nature of the 'Other Computer Related Services' (e.g., installation, configuration, technical support, consulting). To assess alignment with IT modernization goals, a review of the Statement of Work (SOW) and any associated performance work statements would be necessary. This would reveal if the procured software and services support cloud migration, cybersecurity enhancements, or other strategic objectives. Without this granular detail, it's presumed the contract supports ongoing operational needs for essential Microsoft software.

How does the per-unit cost of Microsoft software licenses and support under this contract compare to GSA Schedule pricing or other government-wide agreements?

The provided data does not include per-unit cost information, making a direct comparison to GSA Schedule pricing or other government-wide agreements impossible. BPA Calls are typically issued against pre-competed Basic Ordering Agreements (BOAs) or schedules. The competitiveness of the pricing would depend on the initial competition for the underlying BOA and the specific pricing negotiated for this call. To perform this analysis, one would need access to the detailed pricing terms within the contract and compare them against publicly available GSA Schedule pricing for identical or similar Microsoft products and support services, considering factors like volume discounts and contract duration.

What is the track record of Dell Federal Systems in delivering similar Microsoft software support services to other federal agencies, and have there been any significant performance issues?

Dell Federal Systems is a large and established contractor with extensive experience supporting federal agencies. While specific performance metrics for this particular BPA Call are not detailed in the provided summary, Dell Federal Systems generally has a broad portfolio of IT services contracts across the government. A comprehensive assessment would require reviewing contract performance reports (e.g., Contractor Performance Assessment Reporting System - CPARS) for other relevant Dell Federal Systems contracts. These reports would highlight past performance, identify any quality or timeliness issues, and provide insights into their ability to manage complex IT procurements, including software licensing and support for major vendors like Microsoft.

Given the nearly five-year duration, what mechanisms are in place to ensure the Department of Commerce can adapt to potential changes in Microsoft's product roadmap or pricing strategies?

The contract's duration of 1797 days (approximately 4.9 years) necessitates mechanisms for adaptation. Firm-fixed-price contracts can be rigid. However, most government IT contracts, especially those involving software, include clauses that allow for modifications or adjustments under specific circumstances. These might include options for adding new software versions, adjusting license counts based on evolving needs, or incorporating changes mandated by the vendor's product lifecycle. The contract likely contains provisions for equitable adjustments if Microsoft significantly alters its licensing models or pricing. Furthermore, the Department of Commerce's contracting officers would be responsible for proactively managing the relationship and seeking favorable terms during any necessary contract modifications or renewals.

What is the historical spending pattern for Microsoft software and related services within the Department of Commerce, and how does this $29 million award compare?

The provided data only pertains to this single $29 million BPA Call awarded on June 29, 2018, with an end date of May 31, 2023. It does not offer historical spending context for Microsoft software within the Department of Commerce. To establish a historical spending pattern, one would need to analyze procurement data for previous years, identifying all contracts related to Microsoft software and IT services awarded by the Department of Commerce. This analysis would reveal trends in spending levels, types of contracts used (e.g., sole-source, competitive), and the primary vendors involved. Comparing this $29 million award to such historical data would indicate whether this represents an increase, decrease, or stable level of investment in Microsoft technologies.

What are the potential risks associated with relying on a single BPA Call for a significant portion of Microsoft software needs, particularly concerning vendor lock-in and future cost escalations?

Relying on a single BPA Call for substantial Microsoft software needs carries several risks. Vendor lock-in is a primary concern; as the contract progresses, the Department of Commerce may become increasingly dependent on Dell Federal Systems and Microsoft's ecosystem, making it difficult and costly to switch to alternative vendors or solutions later. Future cost escalations are also a risk, especially if the firm-fixed-price agreement does not adequately account for potential increases in Microsoft's licensing fees or support costs over the contract's nearly five-year term. Without competitive re-evaluation during the contract period, the government might end up paying above-market rates. Diligent contract management, including regular market research and negotiation, is crucial to mitigate these risks.

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 › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Francisco Partners Management, L.P.

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

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $29,020,018

Exercised Options: $29,020,018

Current Obligation: $29,020,018

Actual Outlays: $5,144,344

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 1331L518A13ES0010

IDV Type: BPA

Timeline