DoD's $24.7M Oracle ULA with Affigent, LLC raises questions on value and competition

Contract Overview

Contract Amount: $24,754,471 ($24.8M)

Contractor: Affigent, LLC

Awarding Agency: Department of Defense

Start Date: 2012-01-31

End Date: 2015-01-30

Contract Duration: 1,095 days

Daily Burn Rate: $22.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ORACLE UNLIMITED LICENSE AGREEMENT (ULA)

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171, UNITED STATES OF AMERICA

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $24.8 million to AFFIGENT, LLC for work described as: ORACLE UNLIMITED LICENSE AGREEMENT (ULA) Key points: 1. The contract's value proposition is unclear without detailed usage metrics. 2. Limited competition suggests potential for above-market pricing. 3. Lack of competition is a key risk indicator for this large software expenditure. 4. The contract duration of three years provides a stable but potentially inflexible period. 5. This spending falls within the Software Publishers sector, dominated by large vendors. 6. The 'Not Competed' award raises concerns about fair market price discovery.

Value Assessment

Rating: questionable

Benchmarking the value of this Oracle Unlimited License Agreement (ULA) is challenging without specific data on software utilization. The $24.7 million expenditure over three years represents a significant investment. Compared to other large enterprise software agreements, the lack of competitive bidding makes it difficult to assess if the government received optimal pricing. Without a clear understanding of the number of licenses deployed and the specific Oracle products covered, it's hard to determine if this ULA offered better value than individual license purchases or a more competitively procured enterprise agreement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'Not Competed' basis, indicating a sole-source or limited competition procurement. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. The lack of competition means that the Department of Defense did not explore alternative solutions or pricing from other software publishers. This can limit the government's ability to negotiate the best possible terms and prices, as there is no direct market pressure from competing offers.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without a bidding process, there's less assurance that the price reflects the most economical option available in the market.

Public Impact

The Department of Defense is the primary beneficiary, gaining access to Oracle software. The contract provides software licenses, enabling various defense operations and administrative functions. The geographic impact is national, supporting DoD operations across its various installations. Workforce implications include IT personnel managing and utilizing the Oracle software.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition limits price discovery and potential savings.
Absence of usage data makes value assessment difficult.
Sole-source awards can lead to vendor lock-in.
Potential for overpayment without market benchmarks.

Positive Signals

Provides access to necessary Oracle software for DoD operations.
A three-year term offers predictable software availability.
Firm Fixed Price contract provides cost certainty for the duration.

Sector Analysis

This contract falls within the Software Publishers industry, a sector characterized by high R&D costs and significant market concentration among a few major players like Oracle. Enterprise software agreements, particularly ULAs, are common for large government agencies needing broad access to software suites. The market size for enterprise software is substantial, with government agencies being significant customers. This contract represents a portion of the DoD's overall IT spending, aimed at ensuring access to critical software infrastructure.

Small Business Impact

This contract does not appear to involve small business set-asides or subcontracting opportunities, as it is a sole-source award for enterprise software. The focus is on a direct agreement with a large software vendor. Consequently, there is no direct impact on the small business ecosystem through this specific procurement mechanism.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management offices. Accountability measures would involve ensuring the software is delivered and functional as per the agreement. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected in the procurement or execution of the contract.

Related Government Programs

Oracle Software Licenses
Department of Defense IT Procurement
Unlimited License Agreements (ULAs)
Software Publishers Sector Spending

Risk Flags

Sole-source award
Lack of competition
Unclear value for money
Potential for overpricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.8 million to AFFIGENT, LLC. ORACLE UNLIMITED LICENSE AGREEMENT (ULA)

Who is the contractor on this award?

The obligated recipient is AFFIGENT, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $24.8 million.

What is the period of performance?

Start: 2012-01-31. End: 2015-01-30.

What was the justification for awarding this Oracle ULA on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED'. Typically, sole-source justifications for large software agreements like ULAs stem from reasons such as the vendor holding exclusive intellectual property rights, the need for seamless integration with existing proprietary systems, or a belief that competitive procurement would be impractical or not in the government's best interest due to specialized requirements. Without the specific justification document (e.g., a Justification and Approval for Other Than Full and Open Competition - J&A), the precise rationale remains unknown. However, for large software vendors like Oracle, arguments often revolve around maintaining compatibility, leveraging existing investments, and the complexity of migrating away from established platforms.

How does the $24.7 million cost compare to market rates for similar Oracle ULAs?

Directly comparing the $24.7 million cost to market rates for similar Oracle ULAs is difficult without detailed information on the specific Oracle products included, the number of users or installations covered, and the negotiated discount levels. Oracle's ULA pricing is often complex and can vary significantly based on the scope of the agreement and the customer's negotiation leverage. Generally, ULAs aim to provide cost predictability and simplify license management for a broad range of software. However, if not carefully negotiated or if actual usage is low, they can be more expensive than purchasing licenses individually. Benchmarking would require access to anonymized data from comparable government or commercial ULA agreements.

What are the primary risks associated with a sole-source software contract of this magnitude?

The primary risks associated with a sole-source software contract of this magnitude include: 1. **Price:** The government may pay a higher price than if the contract were competed, as there is no competitive pressure to drive down costs. 2. **Vendor Lock-in:** The agency becomes heavily reliant on the sole provider, making it difficult and costly to switch to alternative solutions in the future. 3. **Limited Innovation:** The lack of competition can reduce the incentive for the vendor to innovate or offer the most cost-effective solutions. 4. **Scope Creep/Unnecessary Features:** Without competitive pressure to optimize for specific needs, the contract might include features or products that are not fully utilized, leading to wasted expenditure. 5. **Reduced Bargaining Power:** The government's leverage in future negotiations is diminished.

What specific Oracle software products are covered under this ULA?

The provided data does not specify the exact Oracle software products included within this Unlimited License Agreement (ULA). Oracle offers a vast portfolio of software, including database management systems, middleware, enterprise resource planning (ERP) software, customer relationship management (CRM) tools, and various applications. A typical ULA aims to cover a broad range of products within defined categories or the entire Oracle software catalog, depending on the agreement's terms. To understand the specific coverage, one would need to consult the contract documentation itself, which would detail the licensed products and any exclusions.

What was the historical spending pattern for Oracle software within the Department of Defense prior to this ULA?

The provided data does not include historical spending patterns for Oracle software within the Department of Defense (DoD) prior to this specific $24.7 million ULA. Understanding historical spending would require analyzing previous contracts for Oracle software, including individual license purchases, support agreements, and potentially earlier enterprise agreements. Such analysis would reveal trends in software acquisition, cost fluctuations, and the evolution of the DoD's reliance on Oracle products. Without access to broader contract databases or historical procurement records, it's impossible to detail these patterns.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Nana Regional Corporation Inc (UEI: 079253761)

Address: 13873 PARK CENTER RD STE 127, HERNDON, VA, 20171

Business Categories: Alaskan Native Corporation Owned Firm, Category Business, DoT Certified Disadvantaged Business Enterprise, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Not Designated a Small Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations

Financial Breakdown

Contract Ceiling: $24,754,471

Exercised Options: $24,754,471

Current Obligation: $24,754,471

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91QUZ09A0001

IDV Type: IDC

Timeline