VA awards $75.3M for VMware product support, management, and operational services

Contract Overview

Contract Amount: $75,313,937 ($75.3M)

Contractor: Alvarez LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2018-10-01

End Date: 2021-09-30

Contract Duration: 1,095 days

Daily Burn Rate: $68.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THE CONTRACTOR SHALL PROVIDE THE EXPERTISE AND SKILL SETS REQUIRED TO MANAGE AND DELIVER SOFTWARE, SOFTWARE MAINTENANCE AND PRODUCT SUPPORT FOR ALL VMWARE PRODUCTS LISTED IN ATTACHMENT A. THIS EFFORT SHALL ALSO REQUIRE PROVIDING SUPPORT SERVICES TO VA IN THE OVERALL OPERATION, MANAGEMENT, IMPLEMENTATION AND USE OF VMWARE PRODUCTS IN AN EFFECTIVE AND COST-CONSCIOUS MANNER REQUIRED BY SUCH A WIDELY DISTRIBUTED ENTERPRISE THE SIZE OF VA.

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $75.3 million to ALVAREZ LLC for work described as: THE CONTRACTOR SHALL PROVIDE THE EXPERTISE AND SKILL SETS REQUIRED TO MANAGE AND DELIVER SOFTWARE, SOFTWARE MAINTENANCE AND PRODUCT SUPPORT FOR ALL VMWARE PRODUCTS LISTED IN ATTACHMENT A. THIS EFFORT SHALL ALSO REQUIRE PROVIDING SUPPORT SERVICES TO VA IN THE OVERALL OPERATION, M… Key points: 1. Contract focuses on comprehensive management and support for VMware products across the VA. 2. Emphasis on cost-conscious operations for a widely distributed enterprise. 3. Contract type is Firm Fixed Price, indicating defined costs for services. 4. Duration of the contract is three years, aligning with operational needs. 5. The award was made under full and open competition after exclusion of sources. 6. This contract supports critical IT infrastructure for the Department of Veterans Affairs.

Value Assessment

Rating: good

The contract value of $75.3 million over three years for comprehensive VMware product support appears reasonable given the scale and complexity of the VA's IT infrastructure. Benchmarking against similar large-scale enterprise software support contracts suggests this pricing is within expected ranges. The firm-fixed-price structure provides cost certainty for the government, although it places the risk of cost overruns on the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition after exclusion of sources,' indicating that while the initial solicitation may have had some exclusions, the final award was based on a competitive process. The presence of multiple bidders (4 were noted) suggests a healthy level of competition, which typically drives better pricing and service quality for the government.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers, as it likely resulted in a more favorable price and a wider array of potential solutions compared to a sole-source or limited competition scenario.

Public Impact

Veterans Affairs (VA) personnel benefit from reliable and well-supported VMware products, enabling efficient operations. Services delivered include software management, maintenance, and product support for critical VMware infrastructure. The geographic impact is nationwide, supporting the VA's distributed enterprise across numerous facilities. Workforce implications include ensuring IT staff have the necessary tools and support to manage the VMware environment effectively.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specific VMware expertise is not widely available in the market.
Reliance on a single vendor's ecosystem could pose long-term strategic risks.
Ensuring continuous knowledge transfer and avoiding key personnel dependency.

Positive Signals

Contract awarded through full and open competition, indicating a competitive market.
Firm Fixed Price contract provides cost predictability for the government.
Long-term support contract ensures stability for critical IT infrastructure.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on software, maintenance, and product support for enterprise virtualization solutions. The market for such services is substantial, driven by the increasing adoption of cloud computing and virtualized environments by large organizations. Comparable spending benchmarks for enterprise software support contracts of this magnitude can range from tens to hundreds of millions of dollars annually, depending on the vendor and scope.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. Given the nature of enterprise-level VMware support, it is likely that the prime contractor is a larger entity. However, there may be opportunities for small businesses to participate as subcontractors, depending on the prime contractor's subcontracting plan and the specific technical requirements.

Oversight & Accountability

The contract is managed by the Department of Veterans Affairs, which has its own internal oversight mechanisms for IT procurements and service delivery. The firm-fixed-price nature of the contract provides a degree of financial oversight. Transparency is generally maintained through federal procurement databases like FPDS. The VA Office of Inspector General would have jurisdiction over any potential fraud, waste, or abuse related to this contract.

Related Government Programs

IT Infrastructure Support Services
Software Maintenance Contracts
Enterprise Software Licensing and Support
Virtualization Technology Services
Cloud Computing Support

Risk Flags

Potential for vendor lock-in
Reliance on specific technology stack
Complexity of managing a distributed enterprise environment

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $75.3 million to ALVAREZ LLC. THE CONTRACTOR SHALL PROVIDE THE EXPERTISE AND SKILL SETS REQUIRED TO MANAGE AND DELIVER SOFTWARE, SOFTWARE MAINTENANCE AND PRODUCT SUPPORT FOR ALL VMWARE PRODUCTS LISTED IN ATTACHMENT A. THIS EFFORT SHALL ALSO REQUIRE PROVIDING SUPPORT SERVICES TO VA IN THE OVERALL OPERATION, MANAGEMENT, IMPLEMENTATION AND USE OF VMWARE PRODUCTS IN AN EFFECTIVE AND COST-CONSCIOUS MANNER REQUIRED BY SUCH A WIDELY DISTRIBUTED ENTERPRISE THE SIZE OF VA.

Who is the contractor on this award?

The obligated recipient is ALVAREZ LLC.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $75.3 million.

What is the period of performance?

Start: 2018-10-01. End: 2021-09-30.

What is the contractor's track record with similar large-scale IT support contracts, particularly within the federal government?

Alvarez LLC's track record with large-scale IT support contracts, especially within the federal government, would need to be thoroughly reviewed. While this specific contract for VMware support is substantial, understanding their past performance on similar engagements is crucial. This includes examining their ability to manage complex software environments, meet service level agreements, and maintain cost controls. A review of their contract history, including any past performance evaluations or awards, would provide insight into their capabilities and reliability. For instance, have they successfully managed similar multi-year, firm-fixed-price contracts for enterprise software support, and what was the feedback on their performance from agencies like the VA or other federal entities?

How does the awarded amount compare to the estimated value or the bids from other competitors?

The awarded amount of $75.3 million represents the final negotiated price for the services. To assess value, this figure should be compared against the initial independent government cost estimate (IGCE) and the bids submitted by other competitors. If the awarded amount is significantly lower than the IGCE and other bids, it suggests strong price competition and potentially good value. Conversely, if it is close to or exceeds the IGCE and other bids, further scrutiny might be warranted. The number of bidders (4) indicates some level of competition, but understanding the range of bids received would provide a clearer picture of the price discovery achieved through the procurement process.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract, and how is performance monitored?

The contract likely includes specific Key Performance Indicators (KPIs) and Service Level Agreements (SLAs) designed to measure the contractor's performance in managing and supporting VMware products. These could include metrics related to system uptime, response times for issue resolution, patch management timeliness, and the effectiveness of operational support. The VA would have a contract officer representative (COR) or contracting officer (CO) responsible for monitoring these KPIs and SLAs. Regular performance reviews, reporting requirements from the contractor, and potentially independent government assessments would be used to ensure compliance and satisfactory service delivery throughout the contract's duration.

What is the potential impact of this contract on the VA's overall IT modernization efforts?

This contract for VMware product support is integral to the VA's IT infrastructure, which underpins many of its modernization efforts. Reliable and efficient management of virtualization technologies like VMware is foundational for deploying new applications, migrating services to cloud environments, and enhancing data center operations. By ensuring the stability and performance of the VMware environment, this contract enables the VA to pursue broader IT modernization goals without being hindered by underlying infrastructure issues. It supports agility by providing a robust platform for innovation and service delivery improvements.

Are there any identified risks associated with the contractor's ability to deliver on the scope of work, and what mitigation strategies are in place?

Potential risks could include the contractor's ability to keep pace with evolving VMware technologies, manage the complexity of the VA's distributed environment, and maintain cost-effectiveness over the contract's duration. Mitigation strategies would typically involve clearly defined SLAs, performance monitoring, and contingency plans. The firm-fixed-price nature shifts some financial risk to the contractor. Furthermore, the competitive award process suggests a baseline level of confidence in the selected contractor's capability. The VA would also likely have clauses for contract termination for default or convenience if performance issues arise.

How has VA's spending on VMware products and related support services evolved over the past five years?

Analyzing VA's spending on VMware products and related support services over the past five years would provide crucial context for this $75.3 million award. This trend analysis could reveal whether spending has been increasing, decreasing, or remaining stable, and whether this contract represents a continuation of previous support arrangements or a shift in strategy. Understanding historical spending patterns helps in assessing the long-term investment in VMware technology and evaluating the cost-effectiveness of current support models against past expenditures. It can also highlight any significant changes in the VA's IT infrastructure or virtualization strategy.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 161 FORT EVANS RD NE STE 335, LEESBURG, VA, 20176

Business Categories: Category Business, Partnership or Limited Liability Partnership, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $111,785,110

Exercised Options: $75,313,937

Current Obligation: $75,313,937

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: NNG15SD19B

IDV Type: GWAC

Timeline