VA awards $133.8M for VMware software, services, and licenses to V3GATE, LLC

Contract Overview

Contract Amount: $133,854,523 ($133.9M)

Contractor: V3gate, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2021-10-01

End Date: 2026-09-30

Contract Duration: 1,825 days

Daily Burn Rate: $73.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: VMWARE SOFTWARE SUPPORT AND MAINTENANCE, PROFESSIONAL SERVICES AND LICENSES

Place of Performance

Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80918

State: Colorado Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $133.9 million to V3GATE, LLC for work described as: VMWARE SOFTWARE SUPPORT AND MAINTENANCE, PROFESSIONAL SERVICES AND LICENSES Key points: 1. Contract value represents a significant investment in IT infrastructure for the VA. 2. The use of firm-fixed-price contracts aims to control costs and provide predictability. 3. Competition was conducted under 'full and open competition after exclusion of sources,' suggesting a potentially complex procurement process. 4. The contract duration of five years indicates a long-term need for these services. 5. The North American Industry Classification System (NAICS) code 541519 covers 'Other Computer Related Services,' a broad category. 6. The contract is managed by the Department of Veterans Affairs itself, indicating internal oversight.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the VMware products and services included. However, a total value of over $133 million over five years suggests a substantial commitment. The firm-fixed-price structure provides cost certainty, but the ultimate value for money depends on the efficiency of service delivery and the criticality of the VMware solutions to the VA's operations. Without comparable contract data or detailed service level agreements, a precise value-for-money assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'full and open competition after exclusion of sources.' This specific procurement method implies that while the competition was intended to be open, certain sources may have been excluded for reasons not immediately apparent from the provided data. The number of bidders (2) is relatively low for a contract of this magnitude, which could indicate a specialized requirement or a challenging bidding environment. A limited number of bidders may lead to less aggressive pricing compared to a broader competition.

Taxpayer Impact: A limited number of bidders can potentially result in higher prices for taxpayers if competition is not sufficiently robust to drive down costs effectively.

Public Impact

Veterans Affairs IT infrastructure and operations are directly supported by this contract. The contract ensures the continued availability and support of critical VMware software and services. IT professionals within the VA may benefit from updated software and enhanced support. The geographic impact is likely nationwide, supporting VA facilities across the United States. Workforce implications include the potential need for IT staff trained in VMware technologies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) raises concerns about potential price inflation and reduced innovation.
The 'after exclusion of sources' clause warrants further investigation into the rationale for excluding potential bidders.
Lack of detailed service scope makes it difficult to assess the true value and necessity of the expenditure.

Positive Signals

Firm-fixed-price contract provides cost certainty for the VA.
Long-term contract (5 years) suggests a stable and ongoing need for these IT services.
Award to a single vendor (V3GATE, LLC) can streamline management and support.

Sector Analysis

The IT services sector, particularly software and cloud infrastructure, is a significant area of federal spending. VMware is a dominant player in virtualization and cloud computing, making its software and support essential for many government agencies. This contract falls within the broader category of IT professional services and software licensing, a market characterized by intense competition among large and specialized vendors. Federal spending in this area often focuses on maintaining legacy systems, migrating to cloud environments, and ensuring cybersecurity, all of which rely on robust software support and maintenance.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). The prime contractor, V3GATE, LLC, is listed with a size standard of 'CO' (likely indicating a specific size standard category, but not explicitly small business status without further context). There is no direct information on subcontracting plans for small businesses within this award. Therefore, the direct impact on the small business ecosystem appears minimal unless V3GATE, LLC voluntarily engages small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract is primarily managed by the Department of Veterans Affairs, as indicated by the 'ag' (agency) and 'sa' (awarding agency) fields. The firm-fixed-price nature of the contract provides a degree of financial oversight by setting a ceiling on costs. Transparency would be enhanced by public disclosure of the specific services and deliverables, as well as performance metrics. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to this contract.

Related Government Programs

Department of Veterans Affairs IT Modernization Initiatives
Federal Civilian IT Software and Services Contracts
VMware Enterprise Licensing Agreements
IT Infrastructure Support Services

Risk Flags

Limited competition raises concerns about price and value.
Lack of detailed scope makes performance and value assessment difficult.
Procurement method ('exclusion of sources') requires further scrutiny.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $133.9 million to V3GATE, LLC. VMWARE SOFTWARE SUPPORT AND MAINTENANCE, PROFESSIONAL SERVICES AND LICENSES

Who is the contractor on this award?

The obligated recipient is V3GATE, 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 $133.9 million.

What is the period of performance?

Start: 2021-10-01. End: 2026-09-30.

What specific VMware products and services are included in this $133.8 million contract?

The provided data identifies the contract as being for 'VMWARE SOFTWARE SUPPORT AND MAINTENANCE, PROFESSIONAL SERVICES AND LICENSES.' However, it does not specify the exact VMware product suites (e.g., vSphere, NSX, vSAN, Horizon) or the nature of the professional services (e.g., implementation, migration, optimization, training). This level of detail is crucial for understanding the scope of work and assessing the value proposition. Without this information, it's difficult to benchmark pricing or evaluate the necessity of the expenditure against specific technological needs of the VA.

How does the pricing of this contract compare to similar VMware support and licensing agreements within the federal government?

Direct price comparison is challenging without knowing the exact product versions, quantities, and support levels included in this $133.8 million award. Federal agencies often negotiate enterprise license agreements (ELAs) or volume discounts. The VA's contract with V3GATE, LLC, awarded under full and open competition after exclusion of sources with two bidders, may not reflect the most competitive pricing achievable in a broader market. Benchmarking would require access to similar ELAs from other agencies or publicly available pricing from VMware or its resellers for comparable scopes of work.

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

The provided summary data does not include details on the specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) governing this contract. For a contract of this magnitude and duration, robust KPIs and SLAs are essential to ensure the VA receives timely and effective support, maintenance, and the intended value from the licensed software. These metrics typically cover aspects like response times for support requests, uptime guarantees for services, and performance benchmarks for the software. The absence of this information in the summary limits the ability to assess the contractor's performance obligations and the VA's recourse for non-performance.

What is the historical spending pattern of the Department of Veterans Affairs on VMware products and services?

The provided data focuses on a single contract award. To understand the historical spending pattern, one would need to analyze previous contracts awarded by the VA for VMware software, support, and related services. This would involve examining contract databases for awards made prior to this $133.8 million contract, looking at both sole-source and competitive procurements, and identifying trends in spending volume, contract types, and awarded vendors. Such an analysis would reveal whether this award represents an increase, decrease, or consistent level of investment in VMware technologies by the VA over time.

What is the rationale behind the 'exclusion of sources' in the 'full and open competition after exclusion of sources' procurement method used for this contract?

The 'full and open competition after exclusion of sources' method suggests that while the competition was intended to be open, specific potential bidders were intentionally excluded. The reasons for exclusion are not detailed in the summary data but could include factors such as prior performance issues, failure to meet specific pre-qualification criteria, or the nature of the requirement necessitating specialized capabilities that only a subset of vendors possessed. Understanding the specific criteria used for exclusion is vital to determine if the competition was genuinely robust or if it unduly limited the pool of potential offerors, potentially impacting price and innovation.

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 › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 555 MIDDLE CREEK PKWY STE 120, COLORADO SPRINGS, CO, 80921

Business Categories: Category Business, Hispanic American Owned Business, Limited Liability Corporation, Minority Owned 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: $136,963,874

Exercised Options: $133,854,523

Current Obligation: $133,854,523

Actual Outlays: $81,673,722

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SD27B

IDV Type: GWAC

Timeline