Commerce Department awards $4.1M for ESRI ArcGIS software, a key tool for geospatial analysis

Contract Overview

Contract Amount: $4,101,441 ($4.1M)

Contractor: Environmental Systems Research Institute, Inc.

Awarding Agency: Department of Commerce

Start Date: 2026-04-01

End Date: 2027-02-26

Contract Duration: 331 days

Daily Burn Rate: $12.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ESRI ARCGIS PROPRIETARY SOFTWARE

Place of Performance

Location: REDLANDS, SAN BERNARDINO County, CALIFORNIA, 92373

State: California Government Spending

Plain-Language Summary

Department of Commerce obligated $4.1 million to ENVIRONMENTAL SYSTEMS RESEARCH INSTITUTE, INC. for work described as: ESRI ARCGIS PROPRIETARY SOFTWARE Key points: 1. Software licensing and maintenance represent a significant, recurring cost for federal agencies. 2. The contract leverages a broad agency agreement (BPA) call, suggesting a streamlined procurement process. 3. A firm-fixed-price contract structure aims to provide cost certainty for the government. 4. The duration of the contract extends over multiple fiscal years, indicating ongoing operational needs. 5. Geospatial software is critical for various government functions, including environmental monitoring and urban planning. 6. The sole awardee, ESRI, is a dominant player in the GIS software market.

Value Assessment

Rating: good

The award of $4.1 million for ESRI ArcGIS software appears reasonable given the proprietary nature and widespread use of this essential geospatial tool. While specific per-unit cost comparisons are difficult without knowing the exact license tiers and quantities, ESRI software is generally considered a premium product. The firm-fixed-price nature of the contract helps manage cost fluctuations. Benchmarking against similar enterprise software licenses would provide further insight, but the value is likely tied to the critical functions the software enables across the Department of Commerce.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, utilizing a Broad Agency Agreement (BPA) call. This indicates that multiple vendors had the opportunity to bid, or that the BPA itself was established through a competitive process. The specific details of the competition for this BPA call are not provided, but the 'full and open' designation suggests a robust process was intended. The number of bidders for this specific call would offer more clarity on the actual level of competition.

Taxpayer Impact: Full and open competition generally leads to better price discovery and potentially lower costs for taxpayers by encouraging multiple vendors to offer competitive pricing.

Public Impact

The Department of Commerce benefits from access to advanced geospatial analysis capabilities. This software supports critical functions such as environmental data analysis, resource management, and economic development planning. Geographic impact is nationwide, enabling data-driven decisions across various regions and states. Workforce implications include enabling federal employees to utilize sophisticated mapping and data visualization tools.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Reliance on a single vendor for critical geospatial software can lead to vendor lock-in and potential price increases in future renewals.
The proprietary nature of ArcGIS means that the government is dependent on ESRI for updates, support, and future development, limiting flexibility.
Without detailed usage metrics, it's difficult to ascertain if the full value of the software licenses is being realized across all intended users.

Positive Signals

ESRI is a recognized leader in GIS software, providing robust and widely adopted tools.
The use of a BPA call suggests an efficient procurement method, potentially saving administrative costs and time.
The firm-fixed-price contract provides budget certainty for the Department of Commerce over the contract period.

Sector Analysis

The market for Geographic Information System (GIS) software is dominated by a few key players, with Environmental Systems Research Institute (ESRI) holding a significant market share. Federal agencies are major consumers of GIS technology due to its utility in mapping, data analysis, and visualization for a wide range of applications, from environmental science to infrastructure management. Spending on GIS software by the federal government is substantial, often involving multi-year licenses and support contracts. This contract fits within the broader trend of federal agencies investing in advanced software solutions to support data-driven decision-making and operational efficiency.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the awardee is a large, established company. While there is no direct subcontracting requirement specified here, large software contracts can sometimes indirectly benefit small businesses if the prime contractor engages them for specialized services or if the software itself enables small business innovation. However, the primary focus of this award is on the direct procurement of software from a major vendor.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Commerce's contracting officers and program managers responsible for software acquisition and usage. The 'Office of the Secretary' is listed as the acquiring office, suggesting high-level oversight. Transparency is facilitated by the public nature of contract awards. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected. Regular reviews of software utilization and performance against objectives would be standard accountability measures.

Related Government Programs

Geographic Information Systems (GIS) Software Licensing
Environmental Data Analysis Software
Mapping and Visualization Tools
Department of Commerce IT Procurement
Broad Agency Agreement (BPA) Procurements

Risk Flags

Proprietary Software Dependence
Potential for Price Escalation
Limited Vendor Competition in GIS Market

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $4.1 million to ENVIRONMENTAL SYSTEMS RESEARCH INSTITUTE, INC.. ESRI ARCGIS PROPRIETARY 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 Commerce (Office of the Secretary).

What is the total obligated amount?

The obligated amount is $4.1 million.

What is the period of performance?

Start: 2026-04-01. End: 2027-02-26.

What is ESRI's track record with the federal government, particularly with the Department of Commerce?

Environmental Systems Research Institute (ESRI) has a long-standing and extensive track record of providing its ArcGIS software and related services to numerous federal agencies, including the Department of Commerce. Their software is considered a de facto standard for many geospatial functions within the government. Historical data indicates consistent procurement of ESRI products across various departments for applications ranging from environmental monitoring and natural resource management to emergency response and urban planning. The Department of Commerce, in particular, relies on GIS for a variety of its missions, suggesting a mature and established relationship with ESRI for software licensing and support.

How does the $4.1 million cost compare to similar federal contracts for GIS software?

Comparing the $4.1 million award requires context regarding the scope, duration, and specific ArcGIS products/licenses included. ESRI software is typically licensed on an enterprise or per-user basis, with costs varying significantly based on the number and type of licenses (e.g., standard, advanced, professional, extensions) and the level of technical support. Given that this contract spans over 331 days (approximately 11 months) and covers proprietary software, the amount is within the expected range for federal agencies procuring enterprise-level GIS solutions. Larger, multi-year enterprise agreements can easily reach tens or hundreds of millions of dollars. Without a precise breakdown of licenses and user counts, a direct per-unit cost comparison is challenging, but the total value reflects the significant investment required for comprehensive GIS capabilities.

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

The primary risks associated with this contract include vendor lock-in, potential for price increases in future renewals, and the risk of underutilization of the software licenses. Vendor lock-in is inherent with proprietary software like ArcGIS, making it difficult and costly to switch to alternative solutions. This risk is mitigated by the government's ability to leverage full and open competition for future contract renewals, potentially negotiating better terms or exploring alternatives if feasible. Price increases are a concern, but the firm-fixed-price structure for this period provides cost certainty. Underutilization risk can be managed through robust internal program management, tracking license usage, and ensuring adequate training for personnel.

How effective is ESRI ArcGIS software in supporting the Department of Commerce's mission objectives?

ESRI ArcGIS software is highly effective in supporting the Department of Commerce's mission objectives, which often involve managing, analyzing, and visualizing vast amounts of geographic and environmental data. Its capabilities are crucial for functions such as mapping climate change impacts, analyzing economic development zones, monitoring natural resources, and supporting disaster response planning. The software provides tools for data integration, spatial analysis, and cartographic production, enabling informed decision-making across various bureaus within the Department. Its widespread adoption across government and industry attests to its effectiveness as a foundational tool for geospatial intelligence.

What has been the historical spending pattern for ESRI software within the Department of Commerce?

Historical spending patterns for ESRI software within the Department of Commerce have likely shown consistent, significant investment over many years. Agencies typically enter into multi-year agreements for enterprise software licenses and support, reflecting the ongoing need for these critical tools. While specific historical dollar amounts for the Department of Commerce are not provided in this data snippet, it's common for such contracts to be renewed and potentially grow in scope as agency needs evolve and new software capabilities are introduced. The recurring nature of software licensing suggests a predictable, albeit substantial, budget allocation for ESRI products.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

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

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: $4,101,441

Exercised Options: $4,101,441

Current Obligation: $4,101,441

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 1331L524A13ES0037

IDV Type: BPA

Timeline