VA Renews Red Hat Enterprise Linux Support for $62.5M, Awarded via Full and Open Competition
Contract Overview
Contract Amount: $62,487,530 ($62.5M)
Contractor: V3gate, LLC
Awarding Agency: Department of Veterans Affairs
Start Date: 2022-09-29
End Date: 2025-09-28
Contract Duration: 1,095 days
Daily Burn Rate: $57.1K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: RED HAT ENTERPRISE LINUX SOFTWARE SUBSCRIPTION RENEWAL AND TECHNICAL SUPPORT
Place of Performance
Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80921
State: Colorado Government Spending
Plain-Language Summary
Department of Veterans Affairs obligated $62.5 million to V3GATE, LLC for work described as: RED HAT ENTERPRISE LINUX SOFTWARE SUBSCRIPTION RENEWAL AND TECHNICAL SUPPORT Key points: 1. Significant expenditure on essential operating system support. 2. Competition was sought after excluding other sources, indicating potential for better pricing. 3. Risk of vendor lock-in for critical infrastructure software. 4. IT sector spending on enterprise software subscriptions is common.
Value Assessment
Rating: good
The contract value of $62.5M over three years for software subscriptions and support appears reasonable given the critical nature of enterprise operating systems. Benchmarking against similar long-term support contracts for major software vendors would provide a more precise assessment.
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,' suggesting that while competition was sought, specific circumstances led to the exclusion of some potential bidders. This method aims for competitive pricing but requires careful justification for source exclusions.
Taxpayer Impact: Taxpayers benefit from competitive bidding, which should drive down costs compared to sole-source awards, though the exclusion of sources warrants scrutiny.
Public Impact
Ensures continuity of critical IT infrastructure for the Department of Veterans Affairs. Supports the operational stability of systems used by veterans and VA staff. Potential for cost savings through competitive procurement processes.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for increased costs if excluded sources were more competitive.
- Reliance on a single vendor for critical software support.
Positive Signals
- Competitive award process.
- Long-term contract provides budget certainty.
Sector Analysis
This contract falls within the IT sector, specifically for enterprise software subscriptions and technical support. Spending on operating systems like Red Hat Enterprise Linux is a standard and necessary component of government IT infrastructure, often representing a significant portion of IT budgets.
Small Business Impact
The data does not indicate whether small businesses were involved in this procurement. Further analysis would be needed to determine the extent of small business participation.
Oversight & Accountability
The Department of Veterans Affairs is responsible for overseeing this contract. Standard oversight mechanisms should be in place to ensure performance and adherence to contract terms, especially given the long duration and significant value.
Related Government Programs
- Other Computer Related Services
- Department of Veterans Affairs Contracting
- Department of Veterans Affairs Programs
Risk Flags
- Potential for price increases in future renewals.
- Vendor lock-in risk.
- Justification for source exclusion requires review.
- Lack of transparency on specific subscription details for benchmarking.
Tags
other-computer-related-services, department-of-veterans-affairs, co, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Veterans Affairs awarded $62.5 million to V3GATE, LLC. RED HAT ENTERPRISE LINUX SOFTWARE SUBSCRIPTION RENEWAL AND TECHNICAL SUPPORT
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 $62.5 million.
What is the period of performance?
Start: 2022-09-29. End: 2025-09-28.
What was the specific reason for excluding other sources in this 'Full and Open Competition After Exclusion of Sources' award?
The exclusion of sources typically occurs when only one or a limited number of responsible sources can provide the required supplies or services. This could be due to proprietary technology, unique capabilities, or urgent requirements. A thorough justification should be documented by the agency to ensure fair competition was still achieved to the maximum extent practicable.
How does the per-unit cost of this subscription renewal compare to industry benchmarks for similar Red Hat Enterprise Linux support contracts?
Without specific details on the number and type of subscriptions, a direct per-unit cost comparison is difficult. However, the total contract value of $62.5M over three years suggests a substantial deployment. Benchmarking against publicly available pricing or similar government contracts would reveal if the VA is receiving a competitive rate for its enterprise Linux support.
What is the risk associated with the long-term renewal of this software subscription, particularly regarding potential future price increases or the availability of alternative solutions?
The primary risk is potential price escalation in future renewals, as the vendor may increase subscription costs over time. Additionally, relying on a single vendor for critical OS support can lead to vendor lock-in, making it difficult and costly to switch to alternative solutions if they become available or more cost-effective. Continuous market research is advised.
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
Solicitation ID: 36C10B22Q0572
Offers Received: 3
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: $71,415,670
Exercised Options: $62,487,776
Current Obligation: $62,487,530
Actual Outlays: $43,822,536
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: NNG15SD27B
IDV Type: GWAC
Timeline
Start Date: 2022-09-29
Current End Date: 2025-09-28
Potential End Date: 2025-09-28 00:00:00
Last Modified: 2025-07-08
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