FAA Renews Microsoft ELA for $42.8M, Raising Software Assurance and Subscription Costs

Contract Overview

Contract Amount: $42,778,545 ($42.8M)

Contractor: Dell Federal Systems L.P

Awarding Agency: Department of Transportation

Start Date: 2023-06-28

End Date: 2023-07-01

Contract Duration: 3 days

Daily Burn Rate: $14.3M/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ITAR-23-2541 SLI#'S: 47134, 47743, 47087, 46473, 49009, 48819, 48562, 48563, 48564, 47133, 51900, 51901 MICROSOFT ELA YEAR 1 ANNUAL RENEWAL MICROSOFT ELA YEAR 5 ANNUAL RENEWAL MUST BE PURCHASED TO RENEW SOFTWARE ASSURANCE AND SUBSCRIPTIONS FO

Place of Performance

Location: SALT LAKE CITY, SALT LAKE County, UTAH, 84116

State: Utah Government Spending

Plain-Language Summary

Department of Transportation obligated $42.8 million to DELL FEDERAL SYSTEMS L.P for work described as: ITAR-23-2541 SLI#'S: 47134, 47743, 47087, 46473, 49009, 48819, 48562, 48563, 48564, 47133, 51900, 51901 MICROSOFT ELA YEAR 1 ANNUAL RENEWAL MICROSOFT ELA YEAR 5 ANNUAL RENEWAL MUST BE PURCHASED TO RENEW SOFTWARE ASSURANCE AND SUBSCRIPTIONS FO Key points: 1. Annual renewal of a Microsoft Enterprise License Agreement (ELA) for the Federal Aviation Administration (FAA). 2. The contract covers software assurance and subscriptions, crucial for maintaining up-to-date software and support. 3. The renewal represents a significant investment in essential software for agency operations. 4. Competition under SAP suggests a structured procurement process, but the specific impact on price discovery is unclear. 5. The FAA is the primary agency utilizing this software, indicating a focused deployment.

Value Assessment

Rating: fair

The annual renewal cost of $42.8 million for a Microsoft ELA is substantial. Benchmarking against similar large-scale government ELA renewals is necessary to assess if this price is competitive, especially considering the duration and scope of software covered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

The contract was competed under SAP, which typically allows for a range of competition types. However, the specific method and whether it was a full and open competition or a more limited approach are not detailed. This impacts the ability to determine if the best possible price was achieved.

Taxpayer Impact: Taxpayers are funding this significant annual software renewal. The value proposition needs to be clear to ensure efficient use of public funds for essential software licensing.

Public Impact

Ensures continued access to critical Microsoft software for FAA operations, supporting air traffic control and administrative functions. Potential for cost savings through volume licensing and software assurance benefits, if negotiated effectively. Risk of vendor lock-in and escalating costs in future renewals if competitive alternatives are not explored. Impacts agency-wide productivity and efficiency through access to updated software and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High annual cost for software renewal.
Potential for price increases in subsequent years.
Reliance on a single software vendor.
Lack of clarity on competition details.

Positive Signals

Ensures continuity of essential software.
Software assurance provides access to updates and support.
Procured under a structured process (SAP).

Sector Analysis

The IT sector, particularly software licensing, represents a significant portion of government spending. Large enterprise agreements like this are common for agencies requiring widespread software access. Benchmarks for similar ELAs would typically focus on per-user costs and the breadth of software included.

Small Business Impact

This contract is with Dell Federal Systems L.P., a large business. There is no indication of small business participation in this specific renewal, which is common for large enterprise software agreements where specialized vendor relationships are key.

Oversight & Accountability

The Department of Transportation's Federal Aviation Administration is responsible for this procurement. Oversight would involve ensuring the terms of the ELA are met, the software is utilized effectively, and future renewals are managed strategically to obtain best value.

Related Government Programs

Software Publishers
Department of Transportation Contracting
Federal Aviation Administration Programs

Risk Flags

High annual expenditure.
Potential for price increases in future renewals.
Lack of detailed competition information.
Vendor lock-in risk.
Dependence on a single software provider.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $42.8 million to DELL FEDERAL SYSTEMS L.P. ITAR-23-2541 SLI#'S: 47134, 47743, 47087, 46473, 49009, 48819, 48562, 48563, 48564, 47133, 51900, 51901 MICROSOFT ELA YEAR 1 ANNUAL RENEWAL MICROSOFT ELA YEAR 5 ANNUAL RENEWAL MUST BE PURCHASED TO RENEW SOFTWARE ASSURANCE AND SUBSCRIPTIONS FO

Who is the contractor on this award?

The obligated recipient is DELL FEDERAL SYSTEMS L.P.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $42.8 million.

What is the period of performance?

Start: 2023-06-28. End: 2023-07-01.

What is the total number of users or devices covered by this Microsoft ELA, and how does the annual cost per user/device compare to industry benchmarks for similar government contracts?

The provided data does not specify the number of users or devices covered by the Microsoft ELA. To assess value, this information is critical. Comparing the annual cost per user/device against government IT procurement data and industry standards for similar enterprise agreements would reveal if the FAA is achieving competitive pricing for its software licensing needs.

What specific software assurance benefits are included in this renewal, and how do they mitigate risks associated with software obsolescence or security vulnerabilities for the FAA?

Software assurance typically includes access to new versions, upgrades, and technical support, which directly mitigates risks of obsolescence and security vulnerabilities by ensuring the FAA has the latest, patched software. The specific benefits detailed in the ELA contract would confirm the extent of this risk mitigation and the value derived from the annual renewal.

Beyond this annual renewal, what is the FAA's long-term strategy for managing its Microsoft software licensing to ensure cost-effectiveness and avoid vendor lock-in?

The FAA's long-term strategy is not detailed here. Proactive management could involve regular market research for alternative solutions, negotiating multi-year agreements with favorable terms, or exploring open-source alternatives where feasible. Without a clear strategy, the agency risks continued price escalations and limited flexibility in future software acquisition.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Dell Technologies Inc.

Address: 1 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: $42,778,545

Exercised Options: $42,778,545

Current Obligation: $42,778,545

Actual Outlays: $42,778,543

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 692M1523A00001

IDV Type: BPA

Timeline