State Dept. Awards $44.9M Salesforce Agreement to Carahsoft, Raising Value and Oversight Questions
Contract Overview
Contract Amount: $44,901,579 ($44.9M)
Contractor: Carahsoft Technology Corp
Awarding Agency: Department of State
Start Date: 2018-09-30
End Date: 2023-03-31
Contract Duration: 1,643 days
Daily Burn Rate: $27.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: ENTERPRISE SALESFORCE AGREEMENT
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of State obligated $44.9 million to CARAHSOFT TECHNOLOGY CORP for work described as: ENTERPRISE SALESFORCE AGREEMENT Key points: 1. Significant contract value of $44.9M over 5 years. 2. Carahsoft Technology Corp. is the sole awardee. 3. Potential for limited competition due to the nature of enterprise software. 4. Sector is IT, specifically enterprise software solutions.
Value Assessment
Rating: questionable
The contract value of $44.9M for an enterprise Salesforce agreement appears high, especially considering the duration. Benchmarking against similar large-scale Salesforce deployments or reseller agreements is crucial to determine if this pricing is competitive.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
While listed as full and open competition, the award to Carahsoft, a known reseller, suggests potential limitations in the actual competitive landscape. The price discovery mechanism relies heavily on the initial solicitation and subsequent bids.
Taxpayer Impact: Taxpayer funds are being utilized for this significant enterprise software agreement. The value and efficiency of this spending will directly impact the agency's budget and its ability to deliver services.
Public Impact
Impacts Department of State's internal operations and data management. Potential for increased efficiency or cost savings through Salesforce platform. Concerns about vendor lock-in and long-term cost implications. Ensures access to critical enterprise software for government functions.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- High contract value
- Potential for limited effective competition
- Lack of specific performance metrics in provided data
Positive Signals
- Use of a widely adopted enterprise platform
- Long-term contract provides stability
Sector Analysis
This contract falls within the Information Technology sector, specifically for enterprise software solutions. Government spending on IT, particularly cloud-based platforms like Salesforce, has been steadily increasing to modernize operations.
Small Business Impact
The data does not indicate any specific provisions or set-asides for small businesses in this contract. Large enterprise software agreements often involve prime contractors who may then subcontract, but direct small business participation is not evident here.
Oversight & Accountability
Oversight is primarily the responsibility of the Department of State's contracting officers and program managers. The contract's duration and value warrant diligent monitoring to ensure performance, cost control, and adherence to terms.
Related Government Programs
- Electronic Computer Manufacturing
- Department of State Contracting
- Department of State Programs
Risk Flags
- High contract value may indicate potential for cost overruns.
- Sole awardee raises concerns about the extent of actual competition.
- Long contract duration (5 years) increases risk of technology obsolescence or changing needs.
- Reliance on a single vendor for critical enterprise functions.
- Potential for scope creep and unmanaged cost increases over time.
Tags
electronic-computer-manufacturing, department-of-state, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of State awarded $44.9 million to CARAHSOFT TECHNOLOGY CORP. ENTERPRISE SALESFORCE AGREEMENT
Who is the contractor on this award?
The obligated recipient is CARAHSOFT TECHNOLOGY CORP.
Which agency awarded this contract?
Awarding agency: Department of State (Department of State).
What is the total obligated amount?
The obligated amount is $44.9 million.
What is the period of performance?
Start: 2018-09-30. End: 2023-03-31.
What is the specific Salesforce product or suite being procured, and how does its functionality align with the Department of State's mission requirements?
The provided data identifies the procurement as an 'ENTERPRISE SALESFORCE AGREEMENT' but lacks specifics on the exact Salesforce products (e.g., Sales Cloud, Service Cloud, Marketing Cloud, custom applications). Understanding the precise functionality is key to assessing its alignment with the Department of State's mission, ensuring it directly supports diplomatic, consular, and administrative functions effectively and isn't over-provisioned.
How was the $44.9M price determined to be fair and reasonable, and what cost-saving measures were negotiated?
Determining fairness and reasonableness for a $44.9M enterprise software agreement requires detailed cost analysis, including labor rates, software licensing fees, and any implementation or support costs. The government should have performed a thorough price negotiation, potentially leveraging bulk purchasing discounts or comparing against industry benchmarks for similar deployments to ensure taxpayer value and avoid overpayment.
What mechanisms are in place to ensure effective performance and mitigate risks associated with a long-term, high-value enterprise software contract?
Effective performance is typically ensured through clearly defined Service Level Agreements (SLAs), Key Performance Indicators (KPIs), and regular performance reviews. Risk mitigation strategies for such contracts include robust cybersecurity protocols, data privacy compliance, contingency planning for service disruptions, and clear exit strategies or transition plans to avoid vendor lock-in and ensure continuity.
Industry Classification
NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing
Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 11493 SUNSET HILLS RD, RESTON, VA, 20190
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $91,908,519
Exercised Options: $77,099,151
Current Obligation: $44,901,579
Actual Outlays: $12,714,006
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: NNG15SC03B
IDV Type: GWAC
Timeline
Start Date: 2018-09-30
Current End Date: 2023-03-31
Potential End Date: 2023-03-31 00:00:00
Last Modified: 2022-09-02
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