FAA renews Dell software bundle for $16.8M, impacting 59,075 users with security and DLP features

Contract Overview

Contract Amount: $43,259,355 ($43.3M)

Contractor: Dell Federal Systems L.P

Awarding Agency: Department of Transportation

Start Date: 2024-06-20

End Date: 2024-07-01

Contract Duration: 11 days

Daily Burn Rate: $3.9M/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ITAR-24-2828 DELL CONTRACT# 692M15-23-A-00001 FAA BUNDLE YEAR 2 RENEWAL SLI BREAKOUT: LINE 1 SLI 50298 - DIR - MS FULL G5 SUITE STEP UP ON 59,075 G5/PA SUBSCRIPTIONS (INCLUDES SECURITY COMPLIANCE, DLP CAPABILITIES ) $16,793,767.98 LINE 2 SLI

Place of Performance

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

State: Utah Government Spending

Plain-Language Summary

Department of Transportation obligated $43.3 million to DELL FEDERAL SYSTEMS L.P for work described as: ITAR-24-2828 DELL CONTRACT# 692M15-23-A-00001 FAA BUNDLE YEAR 2 RENEWAL SLI BREAKOUT: LINE 1 SLI 50298 - DIR - MS FULL G5 SUITE STEP UP ON 59,075 G5/PA SUBSCRIPTIONS (INCLUDES SECURITY COMPLIANCE, DLP CAPABILITIES ) $16,793,767.98 LINE 2 SLI Key points: 1. Value for money assessed through comparison with similar enterprise software renewals. 2. Competition dynamics indicate a competed contract, potentially leading to better pricing. 3. Risk indicators include reliance on a single vendor for critical software. 4. Performance context is a renewal, suggesting satisfaction with previous service. 5. Sector positioning within IT services, specifically software licensing and support.

Value Assessment

Rating: good

The renewal price of $16.8 million for 59,075 Microsoft G5/PA subscriptions appears reasonable when benchmarked against enterprise software licensing agreements. The inclusion of security compliance and Data Loss Prevention (DLP) capabilities adds significant value. While specific per-unit cost comparisons are not provided, the bundled nature and renewal status suggest a negotiated rate that likely offers better value than procuring individual components separately. Further analysis would require access to the original contract and pricing history.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

This contract was competed under the Simplified Acquisition Procedures (SAP), suggesting a streamlined procurement process for a contract valued below certain thresholds. While the specific competition details are not fully elaborated, the 'competed' status implies that multiple vendors had an opportunity to bid. The presence of two bids (no: 2) indicates some level of competition, which is generally favorable for price discovery and achieving a fair market price.

Taxpayer Impact: The competed nature of this contract suggests that taxpayers likely benefited from a more competitive pricing environment compared to a sole-source award, potentially saving funds through the bidding process.

Public Impact

Federal Aviation Administration (FAA) employees and systems benefit from enhanced security and data protection. Essential software services are delivered to over 59,000 users, ensuring operational continuity. Geographic impact is nationwide, supporting FAA operations across all locations. Workforce implications include providing necessary tools for productivity and compliance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with a large, multi-year software suite renewal.
Dependence on a single vendor for critical security and productivity tools.
Risk of price increases in future renewal periods if competition diminishes.

Positive Signals

Renewal indicates satisfaction with current service levels and product performance.
Inclusion of advanced security and DLP features enhances the agency's protective posture.
Bundled solution likely offers cost efficiencies compared to individual software purchases.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on enterprise software licensing and support. The market for such software is dominated by a few large providers, with significant spending by federal agencies on productivity suites, security tools, and cloud-based solutions. Comparable spending benchmarks would involve analyzing other large federal software renewals for similar user counts and feature sets.

Small Business Impact

The provided data does not indicate if this contract involved small business set-asides or subcontracting opportunities. As a renewal of a software bundle, it is likely that the primary contractor, Dell Federal Systems L.P., is a large business. Further investigation would be needed to determine if any portion of the work was subcontracted to small businesses.

Oversight & Accountability

Oversight for this contract would typically fall under the Federal Aviation Administration's contracting and program management offices. Transparency is facilitated through contract databases like FPDS. Inspector General oversight may be involved if specific concerns regarding waste, fraud, or abuse arise. The renewal process itself implies a level of ongoing performance review.

Related Government Programs

FAA IT Modernization Programs
Federal Enterprise Software Licensing Agreements
Cybersecurity Enhancements for Federal Agencies
Microsoft 365 Government Licensing

Risk Flags

Potential for vendor lock-in
Reliance on a single software provider
Need for ongoing performance monitoring

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $43.3 million to DELL FEDERAL SYSTEMS L.P. ITAR-24-2828 DELL CONTRACT# 692M15-23-A-00001 FAA BUNDLE YEAR 2 RENEWAL SLI BREAKOUT: LINE 1 SLI 50298 - DIR - MS FULL G5 SUITE STEP UP ON 59,075 G5/PA SUBSCRIPTIONS (INCLUDES SECURITY COMPLIANCE, DLP CAPABILITIES ) $16,793,767.98 LINE 2 SLI

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 $43.3 million.

What is the period of performance?

Start: 2024-06-20. End: 2024-07-01.

What is the historical spending trend for this specific Dell software bundle renewal at the FAA?

Analyzing historical spending requires access to previous contract awards for this specific bundle. Without prior data, it's difficult to establish a trend. However, the current award of $16.8 million for Year 2 renewal suggests a significant investment. If this is a multi-year contract, subsequent years might see price escalations or de-escalations based on negotiated terms, user count changes, or market shifts. Understanding the initial contract value and any prior renewal amounts would provide crucial context for assessing value over time and identifying potential cost-saving opportunities or inflationary pressures.

How does the per-user cost of this Microsoft G5/PA suite compare to other federal agencies or commercial entities?

The provided data does not explicitly state the per-user cost, but with 59,075 subscriptions at $16,793,767.98 for Line 1, the approximate per-user cost is around $284. This figure needs to be contextualized by the specific features included (security, DLP) and the licensing model (step-up). Benchmarking against other federal agencies requires access to their contract data, which can vary based on negotiated enterprise agreements and volume discounts. Commercially, similar Microsoft 365 E5 or equivalent government plans can range significantly, but this per-user rate appears competitive for a comprehensive enterprise suite with advanced security features, especially considering the government's purchasing power and potential for negotiated discounts.

What are the specific security compliance and DLP capabilities included in this renewal, and how do they align with FAA's cybersecurity requirements?

The renewal specifies 'SECURITY COMPLIANCE, DLP CAPABILITIES' as part of the Microsoft G5/PA suite step-up. This typically includes advanced threat protection, identity and access management, information protection, and data loss prevention policies designed to prevent sensitive data from leaving the agency's control. For the FAA, which handles critical aviation data and operates within a stringent regulatory environment, these capabilities are vital for meeting cybersecurity mandates (like those from CISA) and protecting national security interests. The exact alignment would depend on the FAA's specific risk assessments and documented requirements, but the inclusion of these features suggests a proactive approach to bolstering their security posture.

What is Dell Federal Systems L.P.'s track record with the FAA and other federal agencies for similar large-scale software contracts?

Dell Federal Systems L.P. is a significant government contractor with a substantial history of providing IT hardware, software, and services to various federal agencies, including the Department of Transportation (which oversees the FAA). Their track record typically involves large-scale deployments and support for enterprise solutions. For the FAA specifically, this renewal indicates a continued relationship and likely satisfactory performance in the previous term. Assessing their broader track record would involve reviewing past performance evaluations, contract completion history, and any reported issues or successes on similar large software licensing and support contracts across the federal government.

Are there any identified risks associated with relying on Dell and Microsoft for such a critical and extensive software suite?

Key risks include vendor lock-in, where switching providers becomes prohibitively expensive and complex due to deep integration and data migration challenges. Dependence on a single vendor for core productivity and security tools also poses a risk if that vendor experiences service disruptions, security breaches, or significant price increases. Furthermore, the rapid evolution of technology means the current suite might become outdated, requiring continuous investment and potential renegotiation. For the FAA, ensuring business continuity and data integrity necessitates robust contingency plans and continuous monitoring of the vendor's performance and product roadmap.

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: Francisco Partners Management, L.P.

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: $43,259,355

Exercised Options: $43,259,355

Current Obligation: $43,259,355

Actual Outlays: $43,259,355

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 692M1523A00001

IDV Type: BPA

Timeline