State Dept. Spent $26.2M on Microsoft Premier Support in FY19, a non-competed delivery order

Contract Overview

Contract Amount: $26,202,813 ($26.2M)

Contractor: Microsoft Corporation

Awarding Agency: Department of State

Start Date: 2018-09-30

End Date: 2020-09-29

Contract Duration: 730 days

Daily Burn Rate: $35.9K/day

Competition Type: NOT COMPETED

Pricing Type: LABOR HOURS

Sector: IT

Official Description: MICROSOFT PREMIER SUPPORT US DEPARTMENT OF STATE INFORMATION MANAGEMENT RESOURCES - 09/30/18 TO 09/28/19

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20006

State: District of Columbia Government Spending

Plain-Language Summary

Department of State obligated $26.2 million to MICROSOFT CORPORATION for work described as: MICROSOFT PREMIER SUPPORT US DEPARTMENT OF STATE INFORMATION MANAGEMENT RESOURCES - 09/30/18 TO 09/28/19 Key points: 1. High spending on a single vendor for essential IT support. 2. Lack of competition raises concerns about price discovery and value. 3. Reliance on Microsoft for critical IT infrastructure presents vendor lock-in risk. 4. IT services sector sees significant spending on software and support contracts.

Value Assessment

Rating: questionable

The $26.2 million spent on Microsoft Premier Support is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar support contracts for large government agencies.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was a delivery order under a larger agreement and was not competed. This lack of competition limits price discovery and may lead to higher costs for the government.

Taxpayer Impact: Taxpayers may be overpaying for IT support services due to the absence of competitive pressure.

Public Impact

Essential IT infrastructure support for the Department of State. Potential for cost savings through competitive procurement of similar services. Impacts the operational continuity and security of State Department IT systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
High dollar value
Sole-source award

Positive Signals

Essential service provided
Established vendor relationship

Sector Analysis

The Department of State's spending on IT support falls within the broader IT services sector. Benchmarks for similar large-scale government IT support contracts are often influenced by vendor lock-in and the complexity of agency needs.

Small Business Impact

This contract was awarded to Microsoft Corporation, a large business. There is no indication that small businesses were involved in providing this specific IT support service.

Oversight & Accountability

The award was a delivery order, suggesting it might be part of a larger framework agreement. Oversight would focus on the justification for non-competition and the reasonableness of costs within the existing contract.

Related Government Programs

Other Computer Related Services
Department of State Contracting
Department of State Programs

Risk Flags

Non-competitive award
Potential for overpayment
Vendor lock-in risk
Lack of transparency in pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $26.2 million to MICROSOFT CORPORATION. MICROSOFT PREMIER SUPPORT US DEPARTMENT OF STATE INFORMATION MANAGEMENT RESOURCES - 09/30/18 TO 09/28/19

Who is the contractor on this award?

The obligated recipient is MICROSOFT CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $26.2 million.

What is the period of performance?

Start: 2018-09-30. End: 2020-09-29.

What was the justification for not competing this significant IT support contract?

The provided data indicates the contract was 'NOT COMPETED' as a delivery order. A full justification would typically be required for sole-source or non-competitive awards, outlining reasons such as urgency, unique capabilities, or existing infrastructure compatibility that preclude competition.

How does the cost of this Microsoft Premier Support compare to industry benchmarks for similar government agencies?

Without competitive bids or access to detailed service level agreements and pricing structures, a direct comparison is challenging. However, the lack of competition suggests a potential risk of paying above market rates, as competitive processes are designed to drive down costs and ensure value.

What are the risks associated with the Department of State's heavy reliance on a single vendor for critical IT support?

Heavy reliance on a single vendor like Microsoft creates risks of vendor lock-in, making it difficult and costly to switch providers. It also concentrates risk; any issues with Microsoft's services or support could significantly disrupt the Department's operations.

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) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: ONE MICROSOFT WAY, REDMOND, WA, 98052

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $26,202,813

Exercised Options: $26,202,813

Current Obligation: $26,202,813

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 19AQMM18D0108

IDV Type: IDC

Timeline