Commerce Dept. awards $39.6M for IT services to Dell, highlighting strong competition and firm fixed pricing

Contract Overview

Contract Amount: $39,613,976 ($39.6M)

Contractor: Dell Federal Systems L.P

Awarding Agency: Department of Commerce

Start Date: 2018-06-01

End Date: 2023-05-31

Contract Duration: 1,825 days

Daily Burn Rate: $21.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MICROSOFT

Place of Performance

Location: ROUND ROCK, WILLIAMSON County, TEXAS, 78664

State: Texas Government Spending

Plain-Language Summary

Department of Commerce obligated $39.6 million to DELL FEDERAL SYSTEMS L.P for work described as: MICROSOFT Key points: 1. Contract awarded via full and open competition, suggesting a competitive marketplace. 2. Firm fixed price contract type indicates predictable costs for the government. 3. The contract duration of 5 years provides long-term service stability. 4. Services fall under 'Other Computer Related Services,' a broad IT category. 5. No small business set-aside was utilized, potentially limiting small business participation. 6. The award value is moderate, fitting within typical IT service procurements.

Value Assessment

Rating: good

The contract's firm fixed price structure provides cost certainty. Benchmarking against similar 'Other Computer Related Services' contracts awarded by the Commerce Department or other agencies would be necessary for a precise value assessment. However, the competitive award process suggests that pricing was likely market-tested. The total award value of $39.6 million over five years averages to approximately $7.9 million annually, which appears reasonable for comprehensive IT services.

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 the competitive nature suggests that multiple companies vied for this opportunity. This level of competition generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: A competitive bidding process ensures that taxpayer dollars are used efficiently by driving down prices and encouraging innovation from multiple vendors.

Public Impact

The U.S. Patent and Trademark Office (USPTO) benefits from these IT services, ensuring operational continuity. Services likely support critical functions of the USPTO, such as patent and trademark application processing and management. The geographic impact is primarily within Texas, where the contractor is located. Workforce implications may include IT professionals employed by Dell Federal Systems L.P. to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on the number of bidders limits a full assessment of competitive intensity.
Absence of small business participation could be a missed opportunity for economic inclusion.

Positive Signals

Firm fixed price contract provides cost predictability.
Full and open competition suggests a robust bidding environment.
Long contract duration offers stability for essential IT services.

Sector Analysis

This contract falls within the Information Technology sector, specifically under 'Other Computer Related Services.' The IT services market is vast and highly competitive, with numerous vendors offering a wide range of solutions. Comparable spending benchmarks for IT services at federal agencies often range from millions to hundreds of millions of dollars annually, depending on the scope and complexity. This $39.6 million award over five years represents a significant, but not extraordinary, investment in IT infrastructure and support for a key agency like the USPTO.

Small Business Impact

The contract was not awarded as a small business set-aside, nor is there an indication of specific subcontracting goals for small businesses. This suggests that the primary focus was on securing the best overall offer through open competition. While this approach can yield competitive pricing, it may limit direct opportunities for small businesses to participate in this specific contract, though they might be involved as subcontractors to the prime vendor.

Oversight & Accountability

The contract is subject to standard federal procurement oversight. Accountability measures are embedded in the firm fixed price structure, which obligates the contractor to deliver specified services within the agreed budget. Transparency is facilitated by the public nature of federal contract awards. Oversight would typically involve contract officers and potentially program managers within the U.S. Patent and Trademark Office to ensure performance standards are met.

Related Government Programs

IT Services
Computer Related Services
Information Technology Support
Federal IT Procurement
Contracting Vehicles

Risk Flags

Potential for scope creep if not managed tightly.
Reliance on a single large vendor for critical IT services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $39.6 million to DELL FEDERAL SYSTEMS L.P. MICROSOFT

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 (U.S. Patent and Trademark Office).

What is the total obligated amount?

The obligated amount is $39.6 million.

What is the period of performance?

Start: 2018-06-01. End: 2023-05-31.

What is the track record of Dell Federal Systems L.P. in fulfilling similar government contracts?

Dell Federal Systems L.P. has a substantial history of securing and performing on government contracts across various agencies. While specific performance metrics for this particular contract are not detailed here, Dell is a well-established technology provider with extensive experience in delivering IT hardware, software, and services to the public sector. Their track record generally includes large-scale deployments and ongoing support agreements. A deeper analysis would involve reviewing past performance evaluations and any reported issues or commendations on federal contract databases to assess their reliability and quality of service in comparable engagements.

How does the $39.6 million award compare to historical spending on IT services by the U.S. Patent and Trademark Office?

To accurately compare this $39.6 million award to historical spending, one would need to analyze the USPTO's IT budget and contract expenditures over previous fiscal years. This figure represents a five-year commitment, averaging approximately $7.9 million annually. If the USPTO's historical annual spending on similar IT services falls within a comparable range, this award would be considered consistent. However, if historical spending was significantly higher or lower, it might indicate a shift in strategy, scope, or market pricing. Accessing historical USPTO procurement data would be crucial for a definitive comparison.

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

Key risks include potential vendor lock-in, service delivery failures, or cost overruns if the firm fixed price model is not managed effectively. Mitigation strategies are inherent in the contract structure: the firm fixed price limits financial risk for the government, assuming the scope is well-defined. Competition itself acts as a risk mitigator by incentivizing performance. Furthermore, standard government oversight, performance monitoring, and defined deliverables help ensure the contractor meets expectations. The long-term nature of the contract also implies a need for robust service level agreements (SLAs) to manage ongoing performance.

How effective is the 'Other Computer Related Services' classification in capturing the scope of work for this contract?

The 'Other Computer Related Services' (NAICS code 541519) classification is broad and encompasses a wide array of IT support functions not specified under more granular categories. While it allows for flexibility in service provision, it can sometimes lack specificity regarding the exact nature of the IT support rendered. For this contract, its effectiveness depends on how well the detailed statement of work aligns with the services provided. If the contract covers diverse IT needs like system maintenance, network support, software troubleshooting, and IT consulting, this broad category might be appropriate. However, a more precise classification could offer clearer insights into the specific technological domains being supported.

What is the potential impact of this contract on the broader IT services market, particularly for competitors?

This contract award to Dell Federal Systems L.P. signifies a significant win for the company within the federal IT services market. For competitors, it represents a lost opportunity to secure this particular revenue stream. The fact that it was awarded under full and open competition suggests that other capable firms likely bid on the contract, indicating a competitive landscape. The success of Dell on this contract could influence future bidding strategies and pricing models for similar government IT service procurements. It also highlights the ongoing demand for comprehensive IT support services within federal agencies like the USPTO.

Industry Classification

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

Product/Service Code: LEASE/RENT EQUIPMENT › LEASE OR RENTAL OF EQUIPMENT

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: Dell Technologies Inc.

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

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $49,827,086

Exercised Options: $39,613,976

Current Obligation: $39,613,976

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 1331L518A13ES0010

IDV Type: BPA

Timeline