State Dept. Awards $2.2M to Microsoft for Unified Support Services, No Competition
Contract Overview
Contract Amount: $2,199,832 ($2.2M)
Contractor: Microsoft Corporation
Awarding Agency: Department of State
Start Date: 2025-09-27
End Date: 2026-09-26
Contract Duration: 364 days
Daily Burn Rate: $6.0K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: MICROSOFT UNIFIED SUPPORT SERVICES
Place of Performance
Location: FREMONT, ALAMEDA County, CALIFORNIA, 94538
Plain-Language Summary
Department of State obligated $2.2 million to MICROSOFT CORPORATION for work described as: MICROSOFT UNIFIED SUPPORT SERVICES Key points: 1. High cost for a single vendor's support services. 2. Lack of competition raises concerns about price and value. 3. Potential risk of vendor lock-in and limited innovation. 4. IT services sector sees significant spending on software support.
Value Assessment
Rating: questionable
The $2.2 million award for unified support services appears high without competitive bidding. Benchmarking against similar enterprise support contracts is difficult due to the lack of disclosed details and competition.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Microsoft. This limits price discovery and potentially leads to higher costs than if multiple vendors had bid.
Taxpayer Impact: Taxpayers may be overpaying for support services due to the absence of a competitive bidding process.
Public Impact
Citizens may question the efficient use of taxpayer funds. Government reliance on a single vendor for critical IT support. Potential for increased costs if Microsoft's pricing escalates without checks.
Waste & Efficiency Indicators
Waste Risk Score: 60 / 10
Warning Flags
- Lack of competition
- High contract value for support
- Sole-source award
Positive Signals
- Clear vendor identified
- Defined service period
Sector Analysis
This award falls within the IT services sector, specifically for computer-related services. Government spending on IT support and maintenance is substantial, often dominated by major software providers.
Small Business Impact
This contract does not appear to involve small businesses, as it is a direct award to a large corporation. There is no indication of subcontracting opportunities for small businesses.
Oversight & Accountability
The lack of competition raises questions about the oversight of this procurement. Further review is needed to understand why this was not competed and if adequate justification exists.
Related Government Programs
- Other Computer Related Services
- Department of State Contracting
- Department of State Programs
Risk Flags
- Sole-source award
- Lack of competitive bidding
- Potential for overpayment
- Vendor lock-in risk
Tags
other-computer-related-services, department-of-state, ca, delivery-order, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of State awarded $2.2 million to MICROSOFT CORPORATION. MICROSOFT UNIFIED SUPPORT SERVICES
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 $2.2 million.
What is the period of performance?
Start: 2025-09-27. End: 2026-09-26.
What is the justification for awarding this contract sole-source to Microsoft?
The justification for a sole-source award typically involves unique capabilities, critical need, or lack of viable alternatives. Without further details, it's difficult to assess if these criteria are met. Agencies must demonstrate that competition is not feasible or would not be in the government's best interest.
How does the $2.2 million cost compare to industry benchmarks for similar unified support services?
Benchmarking is challenging without knowing the specific service levels, scope, and duration. However, for a single vendor's support, $2.2 million over one year is a significant sum. Industry averages vary widely, but competitive bids often drive down costs compared to sole-source awards.
What are the risks associated with relying solely on Microsoft for unified support services?
Key risks include vendor lock-in, where switching becomes difficult and costly. It can also stifle innovation if the government becomes dependent on Microsoft's roadmap. Furthermore, without competition, there's less pressure on Microsoft to offer the most cost-effective solutions or superior service.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services
Product/Service Code: IT AND TELECOM - APLLICATIONS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: 19AQMM24R0122
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1 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: $2,199,832
Exercised Options: $2,199,832
Current Obligation: $2,199,832
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: 19AQMM25D0079
IDV Type: IDC
Timeline
Start Date: 2025-09-27
Current End Date: 2026-09-26
Potential End Date: 2026-09-26 00:00:00
Last Modified: 2026-02-18
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