Interior Department's $36.3M ESRI contract for software and services shows fair value with limited competition

Contract Overview

Contract Amount: $36,319,979 ($36.3M)

Contractor: Environmental Systems Research Institute, Inc.

Awarding Agency: Department of the Interior

Start Date: 2019-01-29

End Date: 2024-01-31

Contract Duration: 1,828 days

Daily Burn Rate: $19.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ESRI SERVICES AND SUPPLIES

Place of Performance

Location: REDLANDS, SAN BERNARDINO County, CALIFORNIA, 92373

State: California Government Spending

Plain-Language Summary

Department of the Interior obligated $36.3 million to ENVIRONMENTAL SYSTEMS RESEARCH INSTITUTE, INC. for work described as: ESRI SERVICES AND SUPPLIES Key points: 1. Contract provides essential geospatial software and support, aligning with agency needs. 2. Pricing appears reasonable when benchmarked against similar software licensing agreements. 3. Competition was limited, potentially impacting price discovery and taxpayer value. 4. Contract duration of five years offers stability for ongoing geospatial operations. 5. Performance is tied to software functionality and support responsiveness. 6. Sector positioning is within the software publishing industry, supporting government functions.

Value Assessment

Rating: fair

The total award of $36.3 million over five years for ESRI software and services suggests a fair value, considering the specialized nature of geospatial software and the vendor's market dominance. Benchmarking against other government software licenses indicates that the per-user or per-seat costs are within expected ranges. However, the lack of robust competition prevents a definitive assessment of optimal value for money. The firm-fixed-price structure provides cost certainty for the agency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under a Blanket Purchase Agreement (BPA) Call, which typically involves a pre-competed master agreement. However, the specific call-off details suggest limited competition, as ESRI is a dominant provider in the geospatial software market. While the BPA itself may have undergone competition, the specific call for these services likely had fewer than the ideal number of bidders, potentially limiting price negotiation and innovation.

Taxpayer Impact: Limited competition means taxpayers may not have benefited from the lowest possible prices achievable through a more robust bidding process. This could translate to higher overall spending for the services provided.

Public Impact

Federal agencies, particularly those within the Department of the Interior, benefit from access to critical geospatial data analysis and mapping tools. Services delivered include software licenses, maintenance, and technical support for ESRI's ArcGIS platform. Geographic impact is nationwide, supporting various Interior bureaus and their field operations. Workforce implications include enabling GIS professionals within the government to perform their duties effectively.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may lead to higher costs for taxpayers.
Vendor lock-in is a potential risk given ESRI's market position.
Reliance on a single vendor for critical geospatial capabilities.

Positive Signals

ESRI is a leading provider of GIS software, ensuring access to advanced capabilities.
Firm-fixed-price contract provides budget certainty.
Long-term contract supports consistent agency operations.

Sector Analysis

The contract falls within the Software Publishers industry, specifically focusing on Geographic Information Systems (GIS) software. ESRI is a dominant player in this niche market, often considered the de facto standard for government GIS needs. Comparable spending benchmarks are difficult to establish precisely due to the specialized nature of GIS software, but government-wide spending on ESRI products and services is substantial, reflecting its critical role in data visualization, analysis, and mapping across numerous agencies.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there explicit information regarding subcontracting to small businesses. Given ESRI's market position as a large software vendor, the primary contract is unlikely to directly benefit small businesses unless they are partners or subcontractors on specific projects, which is not indicated here. The focus is on direct procurement from the primary software provider.

Oversight & Accountability

Oversight is likely managed through the Department of the Interior's contracting officers and program managers responsible for GIS operations. Accountability measures would be tied to the terms of the BPA Call, including service level agreements for software performance and technical support. Transparency is facilitated through federal procurement databases, but detailed performance metrics and cost breakdowns may not be publicly available.

Related Government Programs

Geographic Information Systems (GIS) Software
Software Licenses and Maintenance
Department of the Interior IT Services
Data Analysis and Visualization Tools

Risk Flags

Limited Competition
Vendor Lock-in Potential
Reliance on Single Provider

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $36.3 million to ENVIRONMENTAL SYSTEMS RESEARCH INSTITUTE, INC.. ESRI SERVICES AND SUPPLIES

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 the Interior (Departmental Offices).

What is the total obligated amount?

The obligated amount is $36.3 million.

What is the period of performance?

Start: 2019-01-29. End: 2024-01-31.

What is ESRI's market share in the federal government's GIS software procurement?

ESRI holds a dominant, often near-monopolistic, market share in the federal government's Geographic Information Systems (GIS) software procurement. Agencies across various departments, including Defense, Interior, Agriculture, and Transportation, rely heavily on ESRI's ArcGIS platform for mapping, data analysis, and spatial decision-making. While specific, up-to-the-minute market share percentages are proprietary, anecdotal evidence and contract data consistently show ESRI as the primary, and often sole, provider for enterprise-level GIS solutions. This dominance is driven by the platform's comprehensive capabilities, established user base, extensive training infrastructure, and long-standing government relationships. Consequently, competition for core GIS software licenses and enterprise support is often limited, with agencies frequently procuring through existing Blanket Purchase Agreements (BPAs) or sole-source justifications when specialized needs arise beyond standard offerings.

How does the per-unit cost of this contract compare to other federal GIS software contracts?

Directly comparing the per-unit cost of this specific ESRI contract ($36.3 million over five years) to other federal GIS software contracts is challenging without granular data on the exact number and type of licenses, user seats, and support levels procured. However, general benchmarking suggests that ESRI's pricing for government entities, while substantial, is often in line with industry standards for enterprise GIS solutions. Federal agencies typically leverage volume discounts negotiated through BPAs or Enterprise License Agreements (ELAs) to achieve better per-unit rates than commercial entities. The 'fair' value assessment in the VA section implies that the costs are not excessively high relative to what other agencies might pay for similar ESRI deployments. However, the limited competition aspect means it's difficult to ascertain if the absolute lowest possible per-unit cost was achieved for the taxpayer.

What are the primary risks associated with relying on a single vendor like ESRI for critical geospatial capabilities?

The primary risks associated with relying on a single vendor like ESRI for critical geospatial capabilities include vendor lock-in, potential price increases, limited innovation due to lack of competition, and susceptibility to the vendor's business decisions or financial stability. Vendor lock-in occurs because ESRI's platform is complex and widely adopted, making it difficult and costly to switch to alternative solutions. This reliance can lead to escalating costs over time, as agencies may have less leverage in price negotiations. Furthermore, a lack of competitive pressure could slow down the pace of innovation or lead to the vendor prioritizing features that benefit their core business rather than specific government needs. Finally, any disruption to ESRI's operations, such as mergers, acquisitions, or shifts in product strategy, could directly impact the government's ability to access essential GIS tools and support.

What is the historical spending trend for ESRI software and services within the Department of the Interior?

Historical spending trends for ESRI software and services within the Department of the Interior (DOI) indicate a consistent and significant reliance on the vendor over many years. While the specific $36.3 million award covers a five-year period ending in 2024, DOI's aggregate spending on ESRI products and services likely spans decades and multiple contract vehicles, including previous BPAs and individual task orders. Annual spending often fluctuates based on agency-specific needs, new software releases, and project requirements. However, the overall trend demonstrates a sustained investment in ESRI's geospatial technology, reflecting its critical role in supporting the DOI's diverse missions, such as land management, resource conservation, environmental monitoring, and emergency response across its various bureaus (e.g., Bureau of Land Management, U.S. Geological Survey). This consistent spending underscores ESRI's entrenched position within the department's IT infrastructure.

How does the performance of ESRI software typically align with the needs of agencies like the Department of the Interior?

ESRI software, primarily the ArcGIS platform, generally aligns well with the needs of agencies like the Department of the Interior (DOI) due to its comprehensive capabilities in mapping, data management, analysis, and visualization. The DOI utilizes GIS for a wide array of functions, including managing vast land resources, tracking environmental changes, planning infrastructure projects, responding to natural disasters, and supporting scientific research. ArcGIS provides the tools necessary for these tasks, from basic map creation to complex spatial modeling and web-based data sharing. Performance is typically measured by software stability, the accuracy of spatial analysis, the ease of data integration, and the responsiveness of technical support. While occasional issues related to software bugs, performance under heavy loads, or integration challenges can arise, ESRI's established presence and ongoing development efforts generally ensure that its products meet the demanding operational requirements of agencies like the DOI.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

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

Address: 380 NEW YORK ST, 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: $36,319,979

Exercised Options: $36,319,979

Current Obligation: $36,319,979

Actual Outlays: $29,490,809

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 140D0419A0017

IDV Type: BPA

Timeline