Commerce Department's $16M Microsoft Support Contract Awarded to Dell Federal Systems

Contract Overview

Contract Amount: $16,091,417 ($16.1M)

Contractor: Dell Federal Systems L.P

Awarding Agency: Department of Commerce

Start Date: 2020-04-14

End Date: 2024-05-14

Contract Duration: 1,491 days

Daily Burn Rate: $10.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MICROSOFT PROFESSIONAL SUPPORT

Place of Performance

Location: SUITLAND, PRINCE GEORGES County, MARYLAND, 20746

State: Maryland Government Spending

Plain-Language Summary

Department of Commerce obligated $16.1 million to DELL FEDERAL SYSTEMS L.P for work described as: MICROSOFT PROFESSIONAL SUPPORT Key points: 1. Contract provides essential IT support services for Microsoft products. 2. Awarded under full and open competition, suggesting a competitive bidding process. 3. Firm Fixed Price contract type helps manage cost certainty. 4. Long duration of 1491 days indicates a sustained need for these services. 5. The North American Industry Classification System (NAICS) code 541519 points to a broad range of computer-related services. 6. Contract value of approximately $16.1 million over its term. 7. Performance period spans from April 2020 to May 2024.

Value Assessment

Rating: good

The contract value of approximately $16.1 million over nearly four years for comprehensive Microsoft professional support appears reasonable, especially given the firm fixed-price structure which limits cost overruns. Benchmarking against similar large-scale IT support contracts for federal agencies suggests this pricing is within expected ranges. The competition level also implies that pricing was likely driven by market forces, contributing to a fair value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but the designation suggests a robust competitive environment. This approach is generally favored for ensuring the government receives the best possible value by leveraging market competition to drive down prices and improve service quality.

Taxpayer Impact: A full and open competition process maximizes the potential for taxpayer savings by encouraging multiple vendors to offer their most competitive pricing and service terms.

Public Impact

Federal employees within the Department of Commerce benefit from reliable IT infrastructure and support. Ensures continuity of operations for critical government functions reliant on Microsoft software. Supports the IT workforce by providing necessary tools and technical assistance. Geographic impact is primarily within the Department of Commerce's operational locations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specific Microsoft expertise is highly specialized.
Reliance on a single vendor for critical support could pose risks if the vendor faces financial or operational challenges.

Positive Signals

Firm Fixed Price contract provides cost predictability.
Long-term contract indicates a stable and ongoing need, suggesting value in a dedicated support relationship.
Awarded through full and open competition, implying competitive pricing and service.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computer-related services and support. The market for IT support, particularly for widely adopted platforms like Microsoft, is substantial within the federal government. Agencies frequently procure such services to maintain operational efficiency and security. Comparable spending benchmarks for similar support contracts often range in the millions of dollars annually, depending on the scope and duration.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. The primary contractor, Dell Federal Systems L.P., is a large business, and its subcontracting plans, if any, would not be driven by a small business set-aside requirement for this specific award.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Commerce's contracting officers and program managers responsible for IT services. Accountability measures are inherent in the firm fixed-price contract structure, requiring the contractor to deliver specified services within the agreed-upon budget. Transparency is facilitated through contract award databases, though detailed performance metrics may not always be publicly disclosed.

Related Government Programs

General Services Administration (GSA) IT Schedule contracts
Department of Defense IT support contracts
Other agency-specific IT service agreements

Risk Flags

Potential for vendor lock-in
Reliance on a single vendor for critical IT support

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $16.1 million to DELL FEDERAL SYSTEMS L.P. MICROSOFT PROFESSIONAL SUPPORT

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 $16.1 million.

What is the period of performance?

Start: 2020-04-14. End: 2024-05-14.

What is the track record of Dell Federal Systems L.P. in providing similar IT support services to the federal government?

Dell Federal Systems L.P. has a significant history of contracting with the U.S. federal government, providing a wide array of IT hardware, software, and support services. Their experience spans numerous agencies, including the Department of Defense, civilian agencies, and intelligence community components. They are a frequent awardee of large-scale IT contracts, often leveraging their position as a major technology vendor. Their track record generally indicates a capacity to deliver complex IT solutions and support, though specific performance on individual contracts can vary. Analyzing past performance reviews and contract close-out data would provide a more granular understanding of their reliability and effectiveness in fulfilling similar Microsoft professional support obligations.

How does the per-contract value of $16.1 million compare to other federal contracts for Microsoft professional support?

The $16.1 million contract value for Microsoft professional support over approximately four years is substantial but not unusual for a large federal agency like the Department of Commerce. Federal IT support contracts, especially those covering enterprise-wide solutions like Microsoft's suite, often reach multi-million dollar figures. The value is influenced by factors such as the number of users supported, the specific Microsoft products covered (e.g., Office 365, Windows Server, Azure), the level of support required (e.g., 24/7, premium support), and the duration of the contract. Compared to other federal contracts for similar services, this award appears to be within a typical range for comprehensive, long-term support for a major agency, especially when considering the firm fixed-price nature which often includes a premium for cost certainty.

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

Primary risks include potential vendor performance issues, such as service disruptions or failure to meet service level agreements (SLAs), and the risk of cost escalation if the firm fixed-price structure is not adequately managed or if scope creep occurs. Another risk is over-reliance on a single vendor for critical IT support. Mitigation strategies are embedded in the contract itself: the firm fixed-price nature caps costs for the government, and the long duration implies a commitment that necessitates contractor reliability. The Department of Commerce's oversight mechanisms, including contract management and performance monitoring, are crucial for identifying and addressing performance issues early. Furthermore, the initial full and open competition process aims to select a capable vendor, reducing the likelihood of selecting an underperforming entity.

How effective is the firm fixed-price contract type in ensuring value for money for this Microsoft support service?

The firm fixed-price (FFP) contract type is generally considered effective in ensuring value for money for services like IT support where the scope of work is well-defined. For this Microsoft professional support contract, FFP provides cost certainty to the government, meaning the contractor assumes the risk of cost overruns. This incentivizes the contractor to manage their resources efficiently and deliver the services within the agreed price. While FFP can sometimes lead to higher initial pricing compared to cost-reimbursement contracts to account for contractor risk, it significantly reduces the government's exposure to unexpected cost increases. For ongoing services like IT support, where the requirements are relatively stable, FFP is a strong mechanism for controlling expenditures and achieving predictable outcomes.

What does the contract's duration of 1491 days (approx. 4 years) signify regarding the Department of Commerce's IT needs?

The contract's duration of approximately four years signifies a long-term, stable, and ongoing requirement for Microsoft professional support within the Department of Commerce. Such a lengthy period suggests that these services are critical to the agency's core operations and are not considered a short-term or temporary need. It indicates a strategic decision to ensure consistent and reliable support for the agency's Microsoft-based IT infrastructure over an extended timeframe. This duration allows for deeper integration of the support provider into the agency's IT environment, potentially leading to greater efficiency and specialized knowledge. It also provides the contractor with a predictable revenue stream, which can encourage investment in dedicated resources and personnel.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

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: $19,592,133

Exercised Options: $19,592,133

Current Obligation: $16,091,417

Actual Outlays: $614,540

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 1331L518A13ES0010

IDV Type: BPA

Timeline