GSA awards $50M for Cisco software licenses to Suh'dutsing Contracting Services, raising value-for-money questions

Contract Overview

Contract Amount: $50,009,576 ($50.0M)

Contractor: Suh'dutsing Contracting Services

Awarding Agency: General Services Administration

Start Date: 2020-06-01

End Date: 2024-05-31

Contract Duration: 1,460 days

Daily Burn Rate: $34.3K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: AFCENT CISCO ENTERPRISE AGREEMENT SOFTWARE LICENSES

Place of Performance

Location: SHAW AFB, SUMTER County, SOUTH CAROLINA, 29152

State: South Carolina Government Spending

Plain-Language Summary

General Services Administration obligated $50.0 million to SUH'DUTSING CONTRACTING SERVICES for work described as: AFCENT CISCO ENTERPRISE AGREEMENT SOFTWARE LICENSES Key points: 1. The contract's value, while substantial, requires further scrutiny against market benchmarks for enterprise software licensing. 2. Limited competition for this award suggests potential for higher pricing than a more open bidding process might yield. 3. The fixed-price contract type offers cost certainty but may not fully capture potential savings from volume discounts or competitive negotiation. 4. Performance context is limited due to the 'Not Available for Competition' award type, hindering direct comparison with similar procurements. 5. The IT sector, particularly enterprise software, is prone to rapid technological shifts, impacting the long-term value of this agreement. 6. The geographic location of the contractor in South Carolina does not appear to be a primary driver for this national IT services contract.

Value Assessment

Rating: questionable

Benchmarking the value of this $50 million Cisco enterprise software license agreement is challenging without detailed service descriptions and market comparisons. The General Services Administration (GSA) often leverages its purchasing power for favorable rates, but the 'Not Available for Competition' status raises concerns about whether the government secured the best possible pricing. Without knowing the specific software versions, user counts, and support levels, it's difficult to compare this to similar enterprise agreements. Further analysis of the per-unit cost or equivalent licensing metrics against industry standards is needed to definitively assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'Not Available for Competition' (NAF) justification, indicating that a full and open competition was not conducted. This typically occurs when a specific need can only be met by a particular source, or in cases of urgent and compelling requirements. The lack of multiple bidders means there was no direct price competition, which can limit the government's ability to negotiate the most favorable terms and pricing. The implications for price discovery are significant, as market forces driving down costs were not engaged.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without a competitive process, there is a reduced incentive for the contractor to offer the lowest possible price, potentially leading to less efficient use of federal funds.

Public Impact

Federal agencies utilizing Cisco enterprise software and services are the primary beneficiaries, ensuring continued access to necessary IT infrastructure. The contract supports the operational needs of various government departments reliant on Cisco networking and collaboration tools. Workforce implications are indirect, primarily supporting IT professionals who manage and maintain these Cisco systems within federal agencies. The geographic impact is national, as the software licenses and services are likely deployed across multiple federal facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing compared to market rates.
The 'Not Available for Competition' status warrants scrutiny to ensure no viable competitive alternatives were overlooked.
Long-term enterprise agreements can become locked-in, making future transitions to alternative vendors costly and complex.
The specific software and services covered are not detailed, making it difficult to assess if the full scope is necessary or optimal.

Positive Signals

The contract provides essential Cisco software licenses, ensuring continuity of operations for federal IT infrastructure.
A single, consolidated enterprise agreement can simplify procurement and management of software licenses across agencies.
The fixed-price contract offers budget predictability for the government.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on enterprise software licensing and related services. The market for enterprise software, particularly from major vendors like Cisco, is characterized by significant market share concentration and high switching costs for customers. Federal spending in this area is substantial, driven by the need for robust, secure, and scalable IT infrastructure across various agencies. Comparable spending benchmarks would involve analyzing other large-scale enterprise software agreements, particularly those for networking, collaboration, and security solutions, often procured through large system integrators or directly from manufacturers via government-wide acquisition contracts.

Small Business Impact

This contract does not appear to include a small business set-aside, as indicated by 'sb': false. Furthermore, the 'st': 'SC' (South Carolina) and 'sn': 'SOUTH CAROLINA' suggest the primary contractor is located there, but the contract type and scale do not inherently favor small business participation. Without specific subcontracting plans detailed in the award, the direct impact on the small business ecosystem is unclear. However, large enterprise agreements often involve prime contractors who may then subcontract portions of the work, potentially creating opportunities for small businesses if such plans are in place and actively managed.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA), specifically the Federal Acquisition Service (FAS), which manages many IT procurements. Accountability measures are inherent in the contract terms, including performance standards and delivery schedules, though these are not detailed in the provided data. Transparency is somewhat limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected related to the procurement or performance of this contract.

Related Government Programs

GSA IT Schedule 70
Enterprise Software Licensing
Network Infrastructure Procurement
Federal Information Technology Modernization

Risk Flags

Sole-source award raises concerns about price competitiveness.
Lack of detailed scope makes value assessment difficult.
Potential for vendor lock-in with enterprise software agreements.
Limited public information on contractor's specific experience in this domain.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $50.0 million to SUH'DUTSING CONTRACTING SERVICES. AFCENT CISCO ENTERPRISE AGREEMENT SOFTWARE LICENSES

Who is the contractor on this award?

The obligated recipient is SUH'DUTSING CONTRACTING SERVICES.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $50.0 million.

What is the period of performance?

Start: 2020-06-01. End: 2024-05-31.

What specific Cisco software products and services are included in this $50 million agreement, and what is the justification for a sole-source award?

The provided data does not specify the exact Cisco software products or services covered under this $50 million agreement. The justification for the 'Not Available for Competition' (NAF) award is also not detailed. Typically, NAF awards are made when only one responsible source can provide the required supplies or services, often due to unique capabilities, compatibility requirements, or urgent and compelling needs. Without this information, it is impossible to fully assess the necessity and value of the procurement. Further investigation into the contract file or agency justifications would be required to understand the specific rationale and scope.

How does the per-unit cost or equivalent metric for these Cisco licenses compare to commercial market rates or other government enterprise agreements?

The provided data does not include specific per-unit cost metrics (e.g., cost per user, cost per device license) for the Cisco software licenses. Therefore, a direct comparison to commercial market rates or other government enterprise agreements is not feasible with the available information. To perform such a benchmark, one would need details on the quantity and type of licenses, associated support and maintenance costs, and the duration of the agreement. GSA often negotiates enterprise-wide agreements that aim for favorable pricing, but the absence of competitive bidding in this instance makes it difficult to ascertain if the government achieved optimal value without further analysis of the contract's pricing structure.

What is the track record of Suh'dutsing Contracting Services in delivering large-scale IT enterprise agreements, particularly for software licensing?

Information regarding Suh'dutsing Contracting Services' track record in delivering large-scale IT enterprise agreements, especially for software licensing, is not provided in the summary data. The award details indicate they are the contractor for this $50 million agreement with GSA. To assess their capabilities and past performance, one would need to consult contract performance databases, past performance reviews, or agency procurement records. Given the 'Not Available for Competition' status, it's possible this award is based on a specific, perhaps unique, qualification or relationship, but without further data, their broader experience in this specific domain remains unclear.

What are the potential risks associated with a sole-source award for enterprise software, and how are they mitigated in this contract?

The primary risks associated with a sole-source award for enterprise software include potentially higher costs due to lack of competition, vendor lock-in making future transitions difficult and expensive, and a reduced incentive for the vendor to provide optimal service or innovation. Mitigation strategies typically involve rigorous negotiation of terms and pricing, clear performance metrics, defined exit strategies, and potentially periodic reviews to ensure continued necessity and value. However, the provided data does not detail the specific mitigation measures employed for this contract, beyond the fixed-price nature which offers some cost certainty.

How does this $50 million spending on Cisco software licenses compare to historical federal spending patterns for similar IT enterprise agreements?

Historical federal spending patterns for similar IT enterprise agreements, particularly those involving major software vendors like Cisco, are substantial and varied. This $50 million award represents a significant investment, but its context within the broader federal IT budget requires comparative data. Agencies frequently procure enterprise licenses for networking, collaboration, and security software. Analyzing historical spending trends from GSA or individual agency IT budgets for comparable Cisco agreements or other large enterprise software procurements would provide insight into whether this contract's value is in line with historical norms, considering factors like scope, duration, and vendor.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 47QFSA20K0033

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 600 N 100 E STE B, CEDAR CITY, UT, 84721

Business Categories: Category Business, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $63,062,767

Exercised Options: $50,009,576

Current Obligation: $50,009,576

Actual Outlays: $26,106,380

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline