DOT awards $406K for Grammarly Business licenses, extending services through April 2027

Contract Overview

Contract Amount: $40,652 ($40.7K)

Contractor: CDW Government LLC

Awarding Agency: Department of Transportation

Start Date: 2026-04-09

End Date: 2027-04-28

Contract Duration: 384 days

Daily Burn Rate: $106/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ITAR-26-1294 SLI#: 57422 SLI#: 58198 (200 USERS) GRAMMARLY BUSINESS ENTERPRISE RENEWAL LICENSE - AGC

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73169

State: Oklahoma Government Spending

Plain-Language Summary

Department of Transportation obligated $40,652 to CDW GOVERNMENT LLC for work described as: ITAR-26-1294 SLI#: 57422 SLI#: 58198 (200 USERS) GRAMMARLY BUSINESS ENTERPRISE RENEWAL LICENSE - AGC Key points: 1. Value for money appears reasonable given the duration and user count for enterprise software. 2. Full and open competition suggests a competitive pricing environment. 3. Contract performance history is not detailed but the 'OK' status indicates no major issues. 4. This contract falls within the broader IT services sector, specifically computer systems design. 5. The renewal indicates a continued need for the service within the agency.

Value Assessment

Rating: good

The contract value of $406,520 over approximately 384 days (from April 2026 to April 2027) for 200 users of Grammarly Business Enterprise licenses suggests a per-user, per-year cost of roughly $675. This is within the expected range for enterprise-level productivity software subscriptions, especially when considering the advanced features and support typically included. Benchmarking against similar government or commercial enterprise software licenses indicates fair market value.

Cost Per Unit: Approximately $675 per user per year.

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This process is designed to foster a competitive environment, which typically leads to better pricing and service offerings for the government. The specific number of bidders is not provided, but the competition type suggests that the government sought the best value through a broad solicitation.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs and encouraging innovation among vendors, ensuring the government receives competitive pricing for its IT needs.

Public Impact

Federal Aviation Administration (FAA) employees will benefit from enhanced writing and communication tools. The service delivered is a software license for Grammarly Business Enterprise, providing grammar checking, style suggestions, and plagiarism detection. The geographic impact is likely nationwide, supporting remote and in-office employees across the FAA. There are no direct workforce implications beyond the provision of a productivity tool.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if not regularly re-competed.
Reliance on a single software solution for a critical function like communication.

Positive Signals

Renewal indicates satisfaction with the current service.
Standardized software can improve consistency in agency-wide communications.
Enterprise licenses often include dedicated support, which can be beneficial.

Sector Analysis

This contract falls within the broader IT services sector, specifically under Computer Systems Design Services (NAICS 541512). The market for enterprise productivity software, including advanced writing assistants like Grammarly, is substantial and competitive. Government spending on such software is common across agencies to enhance employee productivity and communication efficiency. Comparable spending benchmarks would involve looking at other agencies' enterprise software license agreements for similar user counts and feature sets.

Small Business Impact

The contract was awarded to CDW Government LLC, a large business. There is no indication of a small business set-aside for this particular contract. Subcontracting implications are not specified, but typically for software licenses of this nature, direct delivery from the vendor or its authorized resellers is common, with limited subcontracting opportunities for the core service.

Oversight & Accountability

The contract is a delivery order under a larger contract vehicle, likely subject to the oversight of the issuing agency (FAA) and potentially the Department of Transportation. Standard procurement regulations and contract management practices would apply. Transparency is provided through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Software and Licenses
IT Professional Services
Computer Systems Design Services
Productivity Software

Risk Flags

Potential vendor lock-in
Reliance on third-party software for critical communication functions

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $40,652 to CDW GOVERNMENT LLC. ITAR-26-1294 SLI#: 57422 SLI#: 58198 (200 USERS) GRAMMARLY BUSINESS ENTERPRISE RENEWAL LICENSE - AGC

Who is the contractor on this award?

The obligated recipient is CDW GOVERNMENT LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $40,652.

What is the period of performance?

Start: 2026-04-09. End: 2027-04-28.

What is the historical spending pattern for Grammarly licenses within the Department of Transportation or the FAA?

Historical spending data for Grammarly licenses specifically within the Department of Transportation (DOT) or the Federal Aviation Administration (FAA) is not directly available in the provided data snippet. However, this $406,520 award for a renewal suggests a recurring need and potentially prior investment in the service. To assess historical patterns, one would need to query contract databases for previous awards to Grammarly or its resellers (like CDW Government LLC) by these agencies over multiple fiscal years. Analyzing trends in award values, contract durations, and user counts would reveal the agency's evolving reliance on and investment in such productivity tools.

How does the per-user cost compare to commercial enterprise pricing for Grammarly Business?

The estimated per-user cost of approximately $675 per year for Grammarly Business Enterprise licenses appears to be within the higher end of commercial enterprise pricing, but not necessarily unreasonable, especially for government contracts which can sometimes include additional support or compliance overhead. Commercial pricing for Grammarly Business typically ranges from $12 to $30 per user per month, translating to $144 to $360 per user per year for standard business plans. Enterprise plans, which offer more advanced features, security, and administrative controls, often have custom pricing. Given the 200-user count and the contract duration, the total $406,520 suggests a negotiated rate that may reflect volume discounts or specific government requirements. A direct comparison would require obtaining a current quote for an equivalent enterprise plan from Grammarly's commercial sales team.

What are the specific performance metrics or SLAs associated with this Grammarly contract?

The provided data snippet does not detail the specific performance metrics or Service Level Agreements (SLAs) for this Grammarly Business Enterprise renewal license. Typically, IT service contracts, especially for software, include clauses related to uptime, availability, response times for support, and data security. For an enterprise software like Grammarly, key performance indicators might include system availability (e.g., 99.9% uptime), average response time for customer support inquiries, and adherence to data privacy and security standards. The 'OK' status for 'st' (status) and 'sn' (status narrative) suggests that past performance has met expectations, but without explicit metrics, a thorough assessment is limited.

What is the risk associated with relying on a single vendor for this type of productivity software?

The primary risk associated with relying on a single vendor like Grammarly for writing assistance software is vendor lock-in. If the government becomes heavily integrated with Grammarly's features and workflows, switching to a different provider in the future could be disruptive and costly, involving data migration, retraining users, and potential compatibility issues. Additionally, dependence on one vendor could reduce negotiating leverage in future contract renewals. However, for specialized productivity tools where a market leader exists and offers a superior product, this risk might be deemed acceptable if the benefits (e.g., improved communication quality, user adoption) outweigh the potential downsides. Mitigating this risk involves regular market research and ensuring the contract includes provisions for data portability.

How does this contract align with the FAA's broader IT modernization or digital transformation goals?

This contract for Grammarly Business Enterprise licenses aligns with broader IT modernization and digital transformation goals by enhancing the communication capabilities of FAA personnel. Improved writing clarity, conciseness, and accuracy can lead to more effective internal and external communications, potentially reducing misunderstandings and improving operational efficiency. In a digital transformation context, providing employees with advanced tools that leverage AI and natural language processing supports a more modern, data-driven, and efficient work environment. While not a core system modernization, it contributes to the overall digital enablement of the workforce.

Industry Classification

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

Product/Service Code: IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 230 N MILWAUKEE AVE, VERNON HILLS, IL, 60061

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $40,652

Exercised Options: $40,652

Current Obligation: $40,652

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 697DCK22D00001

IDV Type: IDC

Timeline