Commerce Department awards $10.3M for Dell Microsoft licenses, with 729 days duration

Contract Overview

Contract Amount: $10,276,627 ($10.3M)

Contractor: Dell Federal Systems L.P

Awarding Agency: Department of Commerce

Start Date: 2024-06-01

End Date: 2026-05-31

Contract Duration: 729 days

Daily Burn Rate: $14.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: DELL MICROSOFT LICENSES

Place of Performance

Location: DALLAS, DALLAS County, TEXAS, 75267

State: Texas Government Spending

Plain-Language Summary

Department of Commerce obligated $10.3 million to DELL FEDERAL SYSTEMS L.P for work described as: DELL MICROSOFT LICENSES Key points: 1. Value for money appears fair given the duration and fixed-price nature. 2. Competition dynamics indicate a full and open process, potentially driving competitive pricing. 3. Risk indicators are low due to a fixed-price contract and established vendors. 4. Performance context is limited without specific deliverables, but licensing is a common need. 5. Sector positioning is within IT services, a significant area of federal spending.

Value Assessment

Rating: fair

The contract value of $10.3 million over approximately two years for software licenses suggests a moderate annual spend. Benchmarking against similar large-scale federal software license procurements is difficult without specific license types and quantities. However, the firm fixed-price structure provides cost certainty for the government. The price per day is approximately $14,097, which needs to be evaluated against the specific software and user base to determine true value.

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 offers. The specific number of bidders is not provided, but a full and open competition generally suggests a healthy level of market interest. This process is designed to foster price discovery and ensure the government receives competitive offers.

Taxpayer Impact: A full and open competition is favorable for taxpayers as it maximizes the potential for lower prices through a wider range of offers and encourages vendors to be competitive.

Public Impact

The Department of Commerce benefits from access to necessary Microsoft software licenses. Essential IT operations and productivity for departmental staff are supported. The geographic impact is likely nationwide, supporting remote and in-office employees. Workforce implications include enabling employees with the tools needed for their roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on license types and quantities makes value assessment challenging.
Potential for vendor lock-in if specific Microsoft products become deeply integrated.
Reliance on a single software vendor could pose long-term strategic risks.

Positive Signals

Use of a well-established vendor (Dell) for Microsoft licenses suggests reliability.
Firm fixed-price contract provides budget predictability.
Full and open competition indicates a structured procurement process.

Sector Analysis

This contract falls within the broader IT services sector, specifically software licensing and support. The federal government is a massive consumer of IT products and services, with software licenses representing a significant portion of its technology spending. Comparable spending benchmarks would involve looking at other agencies' large-scale Microsoft enterprise agreements or similar software procurements, which often run into tens or hundreds of millions of dollars annually.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). While Dell Federal Systems L.P. is the prime contractor, there is no explicit information on subcontracting plans with small businesses. The impact on the small business ecosystem is likely minimal unless Dell has specific subcontracting goals that are not detailed here.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Commerce's contracting officers and program managers. Accountability measures are inherent in the firm fixed-price contract, requiring delivery of specified licenses. Transparency is facilitated by the contract award being publicly available, though detailed usage and performance metrics may be internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

General Services Administration (GSA) Schedules
Enterprise Software Agreements
Department of Commerce IT Modernization Initiatives
Microsoft Volume Licensing Programs

Risk Flags

Lack of specific software details limits granular value assessment.
Potential for future price increases from Microsoft licensing changes.
Dependence on a single software ecosystem.

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $10.3 million to DELL FEDERAL SYSTEMS L.P. DELL MICROSOFT LICENSES

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 $10.3 million.

What is the period of performance?

Start: 2024-06-01. End: 2026-05-31.

What specific Microsoft software licenses are included in this $10.3 million award, and what is the per-unit cost breakdown?

The provided data does not specify the exact Microsoft software licenses covered under this $10.3 million award to Dell Federal Systems L.P. It only indicates 'DELL MICROSOFT LICENSES'. Without this detail, a precise per-unit cost breakdown is impossible. Federal software procurements often involve enterprise agreements for operating systems, office productivity suites, server software, and specialized applications. The total value and duration (729 days) suggest a significant number of users or a broad range of software. To assess value, one would need to know the specific SKUs, quantities, and license types (e.g., perpetual, subscription, user-based, device-based) to compare against market rates or other government agreements.

How does the $14,097 daily cost compare to similar federal software license procurements?

The calculated daily cost of approximately $14,097 for this contract is a high-level figure derived from the total award value ($10,276,626.62) divided by the contract duration in days (729). This figure represents the average daily expenditure for all licenses procured under this contract. Direct comparison to similar federal software license procurements is challenging without knowing the specific software titles, the number of users or devices licensed, and the type of licenses (e.g., subscription, perpetual). However, for large enterprise-wide deployments of core Microsoft products like Windows or Office 365 across a federal agency, such daily expenditures, when annualized, can fall within expected ranges, especially when considering the total cost of ownership, support, and potential volume discounts negotiated.

What is Dell Federal Systems L.P.'s track record with large federal IT contracts, particularly for software licensing?

Dell Federal Systems L.P. is a well-established and frequent recipient of federal IT contracts. They have a significant track record in providing hardware, software, and related services to various government agencies. While specific details on their past Microsoft license awards to the Department of Commerce are not immediately available from the provided snippet, Dell consistently ranks among the top federal IT contractors. Their experience typically includes managing complex licensing agreements, ensuring compliance, and providing technical support. Agencies often rely on large, reputable vendors like Dell for predictable delivery and established support channels, especially for widely used software platforms like Microsoft's.

What are the potential risks associated with relying on a single vendor like Microsoft for essential software, even if procured through Dell?

Relying heavily on a single software vendor like Microsoft, even when procured through a reseller like Dell, presents several risks. Vendor lock-in is a primary concern, where switching to alternative solutions becomes technically difficult and prohibitively expensive due to proprietary formats, integrations, and user training. Microsoft frequently updates its licensing models and pricing, which can lead to unexpected cost increases over time, potentially exceeding the initial value proposition. Furthermore, dependence on one vendor can limit flexibility in adopting new technologies or best-of-breed solutions from other providers. Security vulnerabilities specific to the vendor's ecosystem could also pose a systemic risk across the agency.

How does the 'Other Computer Related Services' NAICS code (541519) align with the procurement of Microsoft licenses?

The North American Industry Classification System (NAICS) code 541519, 'Other Computer Related Services,' is a broad category that encompasses a wide range of IT services not specified elsewhere. While the primary activity might seem to be software licensing, this code can encompass the services associated with procuring, managing, and potentially implementing those licenses. This could include consulting, integration, configuration, and support services related to the software. Procuring Microsoft licenses, especially in large quantities or as part of a broader IT solution, often involves more than just the transaction of the license itself, justifying the use of a comprehensive service code like 541519.

Industry Classification

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

Product/Service Code: IT AND TELECOM - APLLICATIONS

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, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $22,856,954

Exercised Options: $10,276,627

Current Obligation: $10,276,627

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 1331L524A13ES0005

IDV Type: BPA

Timeline