VA awards $36.8M Splunk Enterprise license to V3Gate, LLC for IT services

Contract Overview

Contract Amount: $36,773,925 ($36.8M)

Contractor: V3gate, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-08-24

End Date: 2027-02-19

Contract Duration: 909 days

Daily Burn Rate: $40.5K/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: ENTERPRISE SPLUNK LICENSE AGREEMENT

Place of Performance

Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80921

State: Colorado Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $36.8 million to V3GATE, LLC for work described as: ENTERPRISE SPLUNK LICENSE AGREEMENT Key points: 1. Contract value represents a significant investment in enterprise software licensing. 2. Competition was full and open, suggesting potential for competitive pricing. 3. The contract duration of over two years indicates a need for sustained IT support. 4. Fixed-price contract type helps mitigate cost overrun risks for the government. 5. The award falls within the 'Other Computer Related Services' NAICS code, a broad category.

Value Assessment

Rating: good

The contract value of $36.8 million for a Splunk Enterprise license over approximately 2.5 years appears reasonable given the enterprise-level nature of the software and its typical deployment costs. Benchmarking against similar large-scale software license agreements for enterprise solutions suggests this price point is within expected ranges. The firm fixed-price structure also provides cost certainty for the Department of Veterans Affairs, which is a positive indicator of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that multiple vendors were likely solicited and allowed to bid. The presence of full and open competition generally fosters a more competitive environment, which can lead to better pricing and terms for the government. The specific number of bidders is not provided, but the competition type suggests a healthy market for these services.

Taxpayer Impact: The full and open competition process is beneficial for taxpayers as it increases the likelihood of securing the best possible price for the required software licenses and support, preventing potential overpayment.

Public Impact

The Department of Veterans Affairs (VA) is the primary beneficiary, gaining access to critical data analytics and security monitoring capabilities. The contract supports the delivery of enterprise-level software licenses essential for IT operations and data management. The contract's performance is likely nationwide, supporting VA facilities across the country. This contract supports IT professionals and potentially data analysts within the VA workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with enterprise software licenses.
Dependence on a single vendor for critical software updates and support.
Ensuring adequate training and adoption of Splunk across the VA workforce.

Positive Signals

Firm fixed-price contract provides budget certainty.
Full and open competition suggests a competitive market.
Long-term contract allows for sustained access to essential IT tools.

Sector Analysis

The contract falls under the Information Technology sector, specifically focusing on software licensing and related services. The market for enterprise data management and security platforms like Splunk is substantial, with significant government spending allocated to such solutions. Comparable spending benchmarks for enterprise software licenses often run into millions of dollars annually, depending on the scope and user base. This contract represents a significant, but not unusual, investment for a large federal agency like the VA.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. As a large enterprise software license agreement, it is less likely to be directly set aside for small businesses. However, the prime contractor, V3GATE, LLC, may engage small businesses for subcontracting opportunities related to implementation, training, or support services, though this is not explicitly detailed in the award information.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program/technical points of contact within the Department of Veterans Affairs. Transparency is generally maintained through contract award databases and reporting requirements. The VA's Office of Inspector General (OIG) would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Enterprise Software Licensing
Data Analytics Platforms
IT Infrastructure Support
Cybersecurity Software
Cloud-Based Services (if applicable)

Risk Flags

Potential for vendor lock-in
Dependence on specific software platform
Ensuring adequate user adoption and training

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $36.8 million to V3GATE, LLC. ENTERPRISE SPLUNK LICENSE AGREEMENT

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 $36.8 million.

What is the period of performance?

Start: 2024-08-24. End: 2027-02-19.

What is V3Gate, LLC's track record with federal contracts, particularly for software licensing?

V3Gate, LLC has a history of federal contracting, primarily focused on IT solutions and services. While specific details on their Splunk Enterprise contract history require deeper database analysis, their presence as a prime contractor suggests they have met federal procurement requirements. Their ability to win this significant award from the Department of Veterans Affairs indicates a level of established performance and capability in delivering IT solutions to government agencies. Further investigation into past performance reviews and contract vehicles utilized by V3Gate would provide a more comprehensive understanding of their track record.

How does the $36.8 million contract value compare to previous VA spending on Splunk or similar solutions?

Without direct historical spending data for Splunk at the VA, a precise comparison is difficult. However, $36.8 million over approximately 2.5 years ($14.7M annually) for an enterprise-wide license of a robust platform like Splunk is within the expected range for a large federal agency. Agencies often consolidate software licenses to achieve better volume discounts. Previous spending might have been fragmented across different offices or on older versions, making this consolidated award potentially more cost-effective in the long run, assuming competitive pricing was achieved through the full and open competition.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks include potential vendor lock-in, where the VA becomes heavily reliant on Splunk and V3Gate, making future transitions costly. Another risk is ensuring effective adoption and utilization of the software across the vast VA network to realize its full value. Mitigation strategies include the firm fixed-price contract type, which caps financial exposure. Furthermore, the full and open competition process aims to secure favorable terms. The VA's internal IT governance and project management will be crucial for managing adoption and ensuring the software meets evolving operational needs.

How effective is Splunk Enterprise in meeting the VA's data management and security needs?

Splunk Enterprise is widely recognized as a leading platform for machine data analysis, enabling organizations to monitor, investigate, and act on their data in real-time. For the VA, this translates to enhanced capabilities in IT operations management, cybersecurity threat detection, compliance monitoring, and business intelligence. Its effectiveness hinges on proper implementation, configuration, and ongoing management tailored to the VA's specific requirements. The success of this contract will be measured by the VA's ability to leverage Splunk to improve operational efficiency, bolster security posture, and support data-driven decision-making across its complex healthcare and administrative systems.

What is the historical spending trend for 'Other Computer Related Services' (NAICS 541519) by the Department of Veterans Affairs?

The Department of Veterans Affairs consistently spends significant amounts on services categorized under NAICS code 541519, 'Other Computer Related Services.' This broad category encompasses a wide array of IT services beyond software development or hardware maintenance, including IT consulting, system integration, data analytics support, and specialized IT services like enterprise software licensing management. Historical data indicates a steady or increasing trend in this spending area as the VA modernizes its IT infrastructure and adopts new technologies to support its mission. This specific Splunk contract is a notable example within this broader spending category.

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: 36C10B24Q0622

Offers Received: 4

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: $114,605,885

Exercised Options: $36,773,925

Current Obligation: $36,773,925

Actual Outlays: $36,308,365

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SD27B

IDV Type: GWAC

Timeline