Air Force awards $19.7M for Microsoft Premier Support, raising questions on competition and value
Contract Overview
Contract Amount: $19,702,451 ($19.7M)
Contractor: Microsoft Corporation
Awarding Agency: Department of Defense
Start Date: 2011-08-01
End Date: 2013-06-29
Contract Duration: 698 days
Daily Burn Rate: $28.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: MICROSOFT PREMIER SUPPORT TASK ORDER FOR THE AIR FORCE
Place of Performance
Location: REDMOND, KING County, WASHINGTON, 98052
Plain-Language Summary
Department of Defense obligated $19.7 million to MICROSOFT CORPORATION for work described as: MICROSOFT PREMIER SUPPORT TASK ORDER FOR THE AIR FORCE Key points: 1. Significant contract value for IT support services. 2. Sole-source award limits competitive pricing discovery. 3. Potential for higher costs due to lack of competition. 4. IT services sector is highly competitive, making sole-source unusual.
Value Assessment
Rating: questionable
The $19.7 million award for Microsoft Premier Support over two years lacks a clear benchmark for value. Without competitive bids, it's difficult to assess if the pricing is fair compared to similar support contracts or market rates.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded sole-source, meaning only one vendor, Microsoft Corporation, was considered. This method bypasses competitive bidding, potentially leading to higher prices and limiting the government's ability to secure the best possible deal.
Taxpayer Impact: The lack of competition in this sole-source award may result in taxpayers paying a premium for Microsoft's premier support services.
Public Impact
Taxpayers may be overpaying for IT support due to a lack of competitive bidding. The Air Force's reliance on a sole-source contract for essential IT services raises concerns about strategic sourcing. This contract highlights a potential gap in leveraging competitive IT service markets.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for overpayment
Positive Signals
- Specific vendor support secured
- Firm fixed price contract
Sector Analysis
This contract falls within the IT services sector, specifically 'Other Computer Related Services'. The IT services market is generally dynamic and competitive, making sole-source awards for common services like vendor support noteworthy.
Small Business Impact
This contract was awarded directly to Microsoft Corporation and does not appear to include provisions for small business participation. The sole-source nature of the award likely precluded opportunities for small businesses to compete for these services.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny regarding the justification for not seeking competitive proposals. Oversight should focus on ensuring the necessity of this approach and the fairness of the pricing.
Related Government Programs
- Other Computer Related Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award lacks transparency.
- Potential for inflated pricing.
- Missed opportunity for small business participation.
- Limited vendor options may not reflect best value.
- Lack of clear justification for sole-source.
Tags
other-computer-related-services, department-of-defense, wa, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $19.7 million to MICROSOFT CORPORATION. MICROSOFT PREMIER SUPPORT TASK ORDER FOR THE AIR FORCE
Who is the contractor on this award?
The obligated recipient is MICROSOFT CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $19.7 million.
What is the period of performance?
Start: 2011-08-01. End: 2013-06-29.
What was the justification for awarding this Microsoft Premier Support contract on a sole-source basis, given the competitiveness of the IT services market?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of viable alternatives. For IT support, agencies might argue vendor-specific expertise or integration requirements necessitate a sole-source approach. However, without detailed documentation, it's difficult to ascertain the specific rationale and whether it adequately addresses the potential for competitive solutions or alternative vendors offering similar support.
How does the $19.7 million cost compare to industry benchmarks for similar IT premier support contracts, and what steps were taken to ensure price reasonableness?
Assessing price reasonableness for sole-source contracts is challenging without competitive data. Agencies often rely on historical pricing, commercial price lists, or independent government cost estimates. Given this was a sole-source award to Microsoft, a comparison to other government contracts for similar support levels or to Microsoft's commercial offerings would be necessary to gauge if the $19.7 million represents fair value.
What is the long-term strategy for IT support services to mitigate reliance on sole-source contracts and maximize competition and cost savings?
A long-term strategy should focus on proactive IT asset management, vendor relationship management, and market research to identify competitive alternatives. This includes breaking down large support requirements into smaller, more competitive lots, exploring multi-vendor support models, and encouraging open standards. Regularly reviewing contract vehicles and performance can help identify opportunities to transition away from sole-source arrangements.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: ONE MICROSOFT WAY, REDMOND, WA, 01
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $37,724,384
Exercised Options: $19,702,451
Current Obligation: $19,702,451
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W91QUZ09D0038
IDV Type: IDC
Timeline
Start Date: 2011-08-01
Current End Date: 2013-06-29
Potential End Date: 2013-06-29 00:00:00
Last Modified: 2013-09-21
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