USAF awards $261.6M for O365 E3 licenses to Dell Marketing L.P. under GSA BPA Call
Contract Overview
Contract Amount: $261,608,400 ($261.6M)
Contractor: Dell Marketing L.P.
Awarding Agency: General Services Administration
Start Date: 2021-06-22
End Date: 2022-12-21
Contract Duration: 547 days
Daily Burn Rate: $478.3K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: DEFENSE ENTERPRISE OFFICE SOLUTION (DEOS) USAF O365 E3 BUSINESS SUBSCRIPTION LICENSES
Place of Performance
Location: ROUND ROCK, WILLIAMSON County, TEXAS, 78682
State: Texas Government Spending
Plain-Language Summary
General Services Administration obligated $261.6 million to DELL MARKETING L.P. for work described as: DEFENSE ENTERPRISE OFFICE SOLUTION (DEOS) USAF O365 E3 BUSINESS SUBSCRIPTION LICENSES Key points: 1. Significant contract value for enterprise software licenses. 2. Competition method was full and open, indicating potential for competitive pricing. 3. Risk is moderate, tied to software vendor lock-in and subscription model sustainability. 4. Sector is IT, specifically software licensing for enterprise productivity.
Value Assessment
Rating: good
The contract value of $261.6M for 547 days suggests a per-user cost that needs comparison against similar enterprise agreements. The firm fixed price structure provides cost certainty.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded via a BPA Call under a full and open competition, suggesting a robust price discovery process. This method aims to secure competitive pricing by allowing multiple vendors to bid.
Taxpayer Impact: The firm fixed price and competitive award method are positive for taxpayers, ensuring predictable costs and value for money in enterprise software acquisition.
Public Impact
Ensures essential productivity tools for Air Force personnel. Supports digital transformation initiatives within the Department of Defense. Potential for cost savings through enterprise-wide licensing agreements.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Subscription model dependency
- Potential for vendor lock-in
- Scalability challenges with evolving needs
Positive Signals
- Leverages existing GSA schedule
- Firm fixed price contract
- Full and open competition awarded
Sector Analysis
This contract falls within the IT sector, specifically enterprise software licensing. Spending benchmarks for similar large-scale government software procurements are typically in the hundreds of millions, making this award substantial but not unprecedented.
Small Business Impact
While the awardee is Dell Marketing L.P., a large business, the use of a GSA schedule and BPA Call could potentially allow for subcontracting opportunities for small businesses in related IT services or support, though not explicitly stated.
Oversight & Accountability
The contract is managed under the General Services Administration's Federal Acquisition Service, which provides a framework for oversight. The BPA Call mechanism allows for task-order level oversight and performance monitoring.
Related Government Programs
- Software Publishers
- General Services Administration Contracting
- Federal Acquisition Service Programs
Risk Flags
- Potential for vendor lock-in
- Subscription cost escalations over time
- Dependency on a single software provider
- Need for robust cybersecurity measures for cloud-based services
Tags
software-publishers, general-services-administration, tx, bpa-call, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
General Services Administration awarded $261.6 million to DELL MARKETING L.P.. DEFENSE ENTERPRISE OFFICE SOLUTION (DEOS) USAF O365 E3 BUSINESS SUBSCRIPTION LICENSES
Who is the contractor on this award?
The obligated recipient is DELL MARKETING L.P..
Which agency awarded this contract?
Awarding agency: General Services Administration (Federal Acquisition Service).
What is the total obligated amount?
The obligated amount is $261.6 million.
What is the period of performance?
Start: 2021-06-22. End: 2022-12-21.
What is the projected per-user cost and how does it compare to industry benchmarks for similar O365 E3 licenses?
The total award is $261.6M over 547 days. To determine the per-user cost, the number of users is required. Without the user count, a precise per-unit cost benchmark is impossible. However, comparing the total value against the duration and assuming a typical enterprise user base would be necessary to assess if the pricing is competitive against other government or commercial O365 E3 agreements.
What are the long-term risks associated with a multi-year subscription for O365 E3 licenses, particularly regarding vendor lock-in and future cost escalations?
The primary long-term risk is vendor lock-in, as migrating away from a deeply integrated suite like Microsoft 365 can be complex and costly. Future cost escalations are also a concern, as Microsoft periodically increases subscription prices. The firm fixed price for the current term mitigates immediate escalation risk, but future renewals will be subject to market conditions and vendor pricing strategies.
How effectively does this O365 E3 subscription support the USAF's mission objectives and digital transformation goals?
O365 E3 licenses provide a standardized suite of productivity and collaboration tools essential for modern military operations, supporting communication, document management, and data analysis. This standardization can enhance interoperability and streamline workflows across the USAF. Its effectiveness in achieving digital transformation hinges on successful adoption, integration with existing systems, and the ability to leverage advanced features for mission-critical tasks.
Industry Classification
NAICS: Information › Software Publishers › Software Publishers
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: 47QFSA21Q0131
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Francisco Partners Management, L.P.
Address: ONE DELL WAY, ROUND ROCK, TX, 78682
Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $261,878,400
Exercised Options: $261,878,400
Current Obligation: $261,608,400
Actual Outlays: $-270,000
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: 47QTCA21A0002
IDV Type: BPA
Timeline
Start Date: 2021-06-22
Current End Date: 2022-12-21
Potential End Date: 2022-12-21 00:00:00
Last Modified: 2025-09-11
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