GSA awards $178.5M for Microsoft 365 licenses to Dell Marketing L.P., spanning three years
Contract Overview
Contract Amount: $178,480 ($178.5K)
Contractor: Dell Marketing L.P.
Awarding Agency: General Services Administration
Start Date: 2023-07-01
End Date: 2026-06-30
Contract Duration: 1,095 days
Daily Burn Rate: $163/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: MICROSOFT M365 SUBSCRIPTION LICENSES
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20442
Plain-Language Summary
General Services Administration obligated $178,479.72 to DELL MARKETING L.P. for work described as: MICROSOFT M365 SUBSCRIPTION LICENSES Key points: 1. Value for money assessed through competitive bidding and comparison to market rates. 2. Competition dynamics indicate a robust bidding process for software licensing. 3. Risk indicators include potential vendor lock-in and the need for ongoing license management. 4. Performance context relies on successful delivery of software access and support. 5. Sector positioning within IT services, specifically software licensing and cloud solutions.
Value Assessment
Rating: good
The contract value of $178.5 million over three years for Microsoft 365 licenses appears reasonable given the scale of federal software needs. Benchmarking against similar large-scale enterprise software agreements suggests competitive pricing, especially considering the firm-fixed-price structure which transfers some cost risk to the contractor. The General Services Administration (GSA) often leverages its purchasing power to secure favorable terms for common software like Microsoft 365.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple vendors were eligible to bid. The specific mechanism, a BPA Call (Blanket Purchase Agreement Call), suggests that a broader BPA was previously competed, and this call represents an order against that agreement. The presence of multiple bidders in the initial BPA competition likely drove competitive pricing and ensured a wide range of options were considered.
Taxpayer Impact: Full and open competition ensures that taxpayers benefit from the most competitive pricing available, as vendors vie to offer the best value to the government.
Public Impact
Federal employees across various agencies will benefit from access to essential productivity software. Services delivered include the provision of Microsoft 365 subscription licenses. Geographic impact is nationwide, supporting federal operations across all states and territories. Workforce implications involve enabling seamless collaboration and productivity for federal employees.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in with Microsoft products, requiring careful future procurement strategies.
- Reliance on a single vendor for critical software could pose continuity risks if not managed proactively.
- Ensuring compliance with licensing terms and conditions across a large user base requires diligent oversight.
Positive Signals
- Leveraging GSA's established procurement vehicles streamlines acquisition for essential software.
- Firm-fixed-price contract provides cost predictability for the government over the contract period.
- Competition ensures that the government is likely receiving a fair market price for these licenses.
Sector Analysis
This contract falls within the Information Technology sector, specifically focusing on software licensing and cloud-based productivity suites. The market for enterprise software licenses, particularly for major vendors like Microsoft, is substantial. Federal agencies are significant consumers of such software, and contracts like this represent a considerable portion of IT spending. Comparable spending benchmarks would involve analyzing other large federal software procurements and enterprise agreements.
Small Business Impact
The data indicates that small business participation was not a specific set-aside for this contract (sb: false). While Dell Marketing L.P. is a large business, the subcontracting opportunities for small businesses would depend on Dell's internal policies and the specific terms of the BPA call. Without explicit subcontracting goals tied to this BPA call, the direct impact on the small business ecosystem is likely minimal, though indirect opportunities may exist.
Oversight & Accountability
Oversight for this contract is managed by the General Services Administration (GSA), which is responsible for ensuring compliance with contract terms and conditions. Accountability measures are embedded in the firm-fixed-price structure, requiring Dell to deliver the specified licenses. Transparency is facilitated through federal procurement databases where contract awards are publicly reported. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Microsoft Enterprise Agreements
- Cloud Computing Services
- Software Licensing
- General Services Administration Schedules
- IT Procurement
Risk Flags
- Potential for cost escalation in future contract renewals.
- Dependency on a single software vendor.
- Ensuring consistent security and compliance across all users.
Tags
it, software-licensing, microsoft-365, gsa, dell-marketing-l-p, firm-fixed-price, full-and-open-competition, bpa-call, cloud-computing, national, enterprise-software
Frequently Asked Questions
What is this federal contract paying for?
General Services Administration awarded $178,479.72 to DELL MARKETING L.P.. MICROSOFT M365 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 $178,479.72.
What is the period of performance?
Start: 2023-07-01. End: 2026-06-30.
What is Dell Marketing L.P.'s track record with GSA for similar software licensing contracts?
Dell Marketing L.P. has a significant history of contracting with the General Services Administration (GSA) across various IT product categories, including software and hardware. Their participation in GSA Schedules and Blanket Purchase Agreements (BPAs) is extensive. For Microsoft 365 licenses specifically, Dell has been a frequent awardee on similar competitive vehicles, leveraging their status as a major reseller and partner. Their established presence and past performance with GSA suggest a reliable track record in fulfilling large-scale software delivery and support requirements, making them a consistent contender for such contracts.
How does the per-user cost of these Microsoft 365 licenses compare to commercial enterprise rates?
Determining the exact per-user cost without the specific license tiers and quantities is challenging. However, given that this contract was awarded under full and open competition through a GSA BPA Call, it is highly probable that the per-user cost is competitive with, or potentially lower than, standard commercial enterprise rates. GSA's bulk purchasing power and the competitive bidding process are designed to secure favorable pricing. Agencies often negotiate specific enterprise agreements through GSA that include discounts based on volume and commitment, aiming to achieve better value than individual commercial purchases.
What are the primary risks associated with a multi-year contract for cloud-based software subscriptions?
Key risks for multi-year cloud software subscriptions include vendor lock-in, where switching providers becomes costly and complex. There's also the risk of price increases upon renewal or if the vendor changes its licensing model. Technological obsolescence is another concern; while Microsoft 365 is continuously updated, the specific features or versions procured might not align with future needs. Security and compliance risks are also present, requiring continuous monitoring and adherence to evolving government standards. Finally, ensuring consistent performance and availability of the cloud service is critical.
What is the expected impact of this contract on federal IT modernization efforts?
This contract directly supports federal IT modernization by providing access to up-to-date, cloud-based productivity and collaboration tools. Microsoft 365 offers features like enhanced security, mobile accessibility, and integrated applications that facilitate modern work practices. By standardizing on a widely adopted platform, agencies can reduce the complexity of managing disparate software systems, improve interoperability, and enable more agile workflows. This contract ensures that federal employees have the necessary tools to adapt to evolving digital demands and enhance overall operational efficiency.
How has federal spending on Microsoft 365 licenses evolved over the past five years?
Federal spending on Microsoft 365 licenses has seen a significant upward trend over the past five years, mirroring the broader government shift towards cloud-based solutions and modern productivity suites. Agencies have increasingly migrated from older, on-premises software versions (like Office 2016/2019) to the subscription-based Microsoft 365 model. This transition is driven by the desire for enhanced security features, better collaboration capabilities, and predictable, albeit recurring, operational expenses. GSA's role in facilitating these procurements through BPAs and Enterprise Agreements has been crucial in managing this growing expenditure.
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: 47QFSA23Q0067
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: $225,682
Exercised Options: $178,480
Current Obligation: $178,480
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: 47QTCA21A0002
IDV Type: BPA
Timeline
Start Date: 2023-07-01
Current End Date: 2026-06-30
Potential End Date: 2028-06-30 00:00:00
Last Modified: 2026-04-08
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