Treasury's $4.3M Microsoft Agreement with LUNATEK, LLC Lacks Competition
Contract Overview
Contract Amount: $4,337,678 ($4.3M)
Contractor: Lunatek, LLC
Awarding Agency: Department of the Treasury
Start Date: 2023-09-17
End Date: 2026-09-16
Contract Duration: 1,095 days
Daily Burn Rate: $4.0K/day
Competition Type: NOT COMPETED UNDER SAP
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: MICROSOFT ENTERPRISE ASSURANCE AGREEMENT
Place of Performance
Location: ALBUQUERQUE, BERNALILLO County, NEW MEXICO, 87106
Plain-Language Summary
Department of the Treasury obligated $4.3 million to LUNATEK, LLC for work described as: MICROSOFT ENTERPRISE ASSURANCE AGREEMENT Key points: 1. The contract is for Microsoft Enterprise Assurance, a critical software licensing and support service. 2. LUNATEK, LLC is the sole awardee, raising questions about competitive pricing. 3. The lack of competition presents a potential risk for overpayment. 4. This falls under IT services, a sector with significant government spending.
Value Assessment
Rating: questionable
The $4.3M price for a 3-year Microsoft Enterprise Assurance agreement appears high without competitive benchmarking. Similar enterprise agreements often involve volume discounts and competitive bids, which are absent here.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not competed under SAP, indicating a limited competition approach. This method may not have explored all available vendors or secured the best possible pricing for the government.
Taxpayer Impact: The lack of robust competition could lead to taxpayers paying more than necessary for Microsoft software licensing and support.
Public Impact
Government reliance on Microsoft products necessitates careful contract management to ensure cost-effectiveness. This agreement highlights the ongoing need for competitive sourcing in IT procurement. Agencies must justify sole-source or limited-competition awards to ensure fair pricing. Taxpayers may be impacted by potentially inflated prices due to limited vendor options.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpricing
- Limited vendor options
Positive Signals
- Definitive contract awarded
- Clear scope of work (Microsoft Enterprise Assurance)
Sector Analysis
This IT contract for software licensing and support is common across federal agencies. Benchmarks for similar enterprise agreements vary widely based on user count, software suite, and support levels, but competition is key to achieving favorable rates.
Small Business Impact
The awardee, LUNATEK, LLC, is not identified as a small business in the provided data. The lack of small business participation in this specific award warrants further investigation into overall agency small business goals.
Oversight & Accountability
The 'NOT COMPETED UNDER SAP' designation suggests a deviation from standard competitive procedures. Oversight is needed to ensure this limited competition was justified and that pricing remains fair and reasonable throughout the contract term.
Related Government Programs
- Other Computer Related Services
- Department of the Treasury Contracting
- Bureau of the Fiscal Service Programs
Risk Flags
- Limited competition may lead to inflated prices.
- Lack of transparency in vendor selection.
- Potential for suboptimal value for taxpayer funds.
- Reliance on a single vendor without competitive pressure.
Tags
other-computer-related-services, department-of-the-treasury, nm, definitive-contract, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $4.3 million to LUNATEK, LLC. MICROSOFT ENTERPRISE ASSURANCE AGREEMENT
Who is the contractor on this award?
The obligated recipient is LUNATEK, LLC.
Which agency awarded this contract?
Awarding agency: Department of the Treasury (Bureau of the Fiscal Service).
What is the total obligated amount?
The obligated amount is $4.3 million.
What is the period of performance?
Start: 2023-09-17. End: 2026-09-16.
What specific justification was provided for not competing this Microsoft Enterprise Assurance agreement more broadly?
The provided data indicates the contract was 'NOT COMPETED UNDER SAP,' suggesting a limited competition approach. A full justification would typically detail why a broader competition was not feasible, such as specific vendor capabilities, urgent needs, or existing infrastructure dependencies that limit viable alternatives.
How does the $4.3M price compare to industry benchmarks for similar Microsoft Enterprise Assurance agreements?
Without specific details on the number of users, software versions, and support levels included, a direct benchmark is difficult. However, for a 3-year term, $4.3M is substantial. Agencies typically leverage competitive bidding to secure discounts, making this price questionable without a clear justification for the lack of competition.
What mechanisms are in place to ensure cost-effectiveness and value for taxpayers given the limited competition?
Mechanisms should include rigorous price analysis against available market data, potential for future competition, and clear performance metrics. The agency should actively monitor usage and seek opportunities to re-compete or negotiate better terms upon contract expiration to mitigate risks associated with limited initial competition.
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 UNDER SAP
Solicitation Procedures: SIMPLIFIED ACQUISITION
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lunatek LLC
Address: 2420 ALAMO AVE SE, ALBUQUERQUE, NM, 87106
Business Categories: 8(a) Program Participant, Category Business, Economically Disadvantaged Women Owned Small Business, HUBZone Firm, Limited Liability Corporation, Partnership or Limited Liability Partnership, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business, Woman Owned Business, Women Owned Small Business
Financial Breakdown
Contract Ceiling: $4,498,401
Exercised Options: $4,352,557
Current Obligation: $4,337,678
Actual Outlays: $4,232,181
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2023-09-17
Current End Date: 2026-09-16
Potential End Date: 2026-09-16 00:00:00
Last Modified: 2026-03-31
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