DHS awarded $87.3M for Microsoft licenses, with a significant portion going to Dell Federal

Contract Overview

Contract Amount: $87,259,783 ($87.3M)

Contractor: Dell Federal Systems L.P

Awarding Agency: Department of Homeland Security

Start Date: 2021-03-27

End Date: 2024-03-27

Contract Duration: 1,096 days

Daily Burn Rate: $79.6K/day

Competition Type: COMPETED UNDER SAP

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MICROSOFT LICENSES

Place of Performance

Location: SPRINGFIELD, ACCOMACK County, VIRGINIA, 20598

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $87.3 million to DELL FEDERAL SYSTEMS L.P for work described as: MICROSOFT LICENSES Key points: 1. Value for money appears fair given the duration and fixed-price nature of the contract. 2. Competition dynamics indicate a BPA call under a larger agreement, suggesting some pre-negotiated terms. 3. Risk indicators are moderate, with a long duration and reliance on a single vendor for licenses. 4. Performance context is tied to software licensing needs for a large federal agency. 5. Sector positioning is within the IT services and software procurement domain.

Value Assessment

Rating: fair

The total award of $87.3 million over three years for Microsoft licenses suggests a substantial investment. Benchmarking this against similar large-scale software license procurements is challenging without more granular data on specific Microsoft products and user counts. However, the firm fixed-price nature provides cost certainty for the government. The per-unit cost, if calculable, would be the key metric for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

The contract was competed under SAP (Small Acquisition Procedures), which typically implies a streamlined process for smaller procurements. However, the substantial award value raises questions about whether this was a competitive bid under SAP or a call against a pre-existing Blanket Purchase Agreement (BPA). If it was a true SAP competition, the number of bidders and the specific SAP category would determine the level of competition. If it's a BPA call, the competition occurred at the BPA level.

Taxpayer Impact: The level of competition directly impacts taxpayer value. More robust competition generally leads to lower prices and better terms. If this was a limited competition or a sole-source BPA call, taxpayers may not have received the best possible pricing.

Public Impact

Federal employees within U.S. Customs and Border Protection will benefit from access to necessary Microsoft software. The services delivered are the provision of software licenses, enabling critical IT operations. The geographic impact is primarily within the operational areas of CBP, likely nationwide. Workforce implications include ensuring IT infrastructure stability and productivity for federal employees.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (3 years) could lead to price increases or outdated software if not managed proactively.
Reliance on a single vendor for a large volume of licenses may limit flexibility and negotiation power.
The specific Microsoft products and versions are not detailed, making it hard to assess if the most cost-effective options were chosen.

Positive Signals

Firm Fixed Price contract provides cost certainty for the duration of the award.
Procurement under SAP suggests an effort to streamline the acquisition process.
The award is to Dell Federal Systems, a known entity in government IT contracting.

Sector Analysis

This contract falls within the broader Information Technology sector, specifically software licensing and procurement. The market for enterprise software licenses is dominated by a few major vendors, with significant reseller and integrator channels. Government spending on software licenses is substantial, often managed through large IDIQs, GWACs, or BPAs to achieve economies of scale and streamline purchasing. This contract represents a portion of that overall IT spending.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (sb: false). While Dell Federal Systems is a large business, there is no information provided on subcontracting plans or performance related to small businesses. The impact on the small business ecosystem is likely minimal unless Dell is required to subcontract a portion of this work to small businesses as part of a larger agreement or policy.

Oversight & Accountability

Oversight for this contract would typically fall under the U.S. Customs and Border Protection's contracting officers and program managers. Transparency is facilitated by public contract databases like FPDS. Accountability measures are inherent in the firm fixed-price contract type, requiring delivery of specified licenses. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Microsoft Enterprise Agreements
Software Licensing Procurements
IT Services for Federal Agencies
Department of Homeland Security IT Spending
Customs and Border Protection Technology

Risk Flags

Potential for price increases over the contract duration.
Lack of detailed product information hinders value assessment.
Unclear competition level impacts taxpayer value analysis.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $87.3 million to DELL FEDERAL SYSTEMS L.P. MICROSOFT LICENSES

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 Homeland Security (U.S. Customs and Border Protection).

What is the total obligated amount?

The obligated amount is $87.3 million.

What is the period of performance?

Start: 2021-03-27. End: 2024-03-27.

What specific Microsoft products and license types were procured under this contract?

The provided data does not specify the exact Microsoft products (e.g., Windows, Office 365, server licenses) or the license types (e.g., perpetual, subscription, user-based, device-based) procured. This level of detail is crucial for a thorough value assessment, as different products and licensing models have vastly different cost structures and implications for long-term IT strategy. Without this information, it's difficult to benchmark the $87.3 million against industry standards or determine if the most cost-effective licensing solution was acquired for the agency's needs.

How many bids were received, and what was the nature of the competition under SAP?

The data indicates the contract was 'COMPETED UNDER SAP' (Small Acquisition Procedures). However, it does not specify the number of bids received or the exact nature of the competition. SAP can encompass various methods, including simplified acquisitions and potentially limited competition for certain thresholds. If this was a call against a pre-existing Blanket Purchase Agreement (BPA), the competition would have occurred at the BPA establishment level, not necessarily for this specific call order. Understanding the number of bidders and the specific SAP procedure used is vital to assess if fair market prices were obtained.

What is the historical spending trend for Microsoft licenses by U.S. Customs and Border Protection?

Analyzing historical spending trends for Microsoft licenses by U.S. Customs and Border Protection (CBP) would provide valuable context for the $87.3 million award. Without access to historical data, it's difficult to determine if this award represents an increase, decrease, or stable level of spending compared to previous years. Understanding past procurement strategies, such as whether CBP has historically used similar contract vehicles or negotiated enterprise agreements, could also shed light on the current contract's value and efficiency. Consistent high spending might indicate a growing need or potentially inefficient procurement practices.

What is Dell Federal Systems' track record with similar large-scale Microsoft license procurements for federal agencies?

Dell Federal Systems' track record with large-scale Microsoft license procurements is a key factor in assessing this contract's risk and value. As a major IT reseller and integrator, Dell likely has experience fulfilling such orders. However, the specifics of their performance on comparable contracts—including on-time delivery, adherence to pricing, customer satisfaction, and any past performance issues—are not detailed in the provided data. A review of their past performance ratings and any relevant contract awards would offer insight into their reliability and capability in managing this significant software license acquisition for CBP.

How does the $87.3 million award compare to the total IT budget or software spending of U.S. Customs and Border Protection?

Placing the $87.3 million award for Microsoft licenses within the context of U.S. Customs and Border Protection's (CBP) overall IT budget or software spending is essential for understanding its relative significance. If CBP's total IT budget is in the billions, this award might represent a moderate portion. Conversely, if their budget is smaller, this could be a substantial investment. Without knowing the total figures, it's challenging to assess if this spending aligns with agency priorities or if it represents an outsized allocation towards software licensing compared to other critical IT needs like hardware, cybersecurity, or network infrastructure.

Are there any specific performance metrics or service level agreements (SLAs) associated with this Microsoft license award?

The provided data does not specify any performance metrics or Service Level Agreements (SLAs) tied to this $87.3 million award for Microsoft licenses. While the core deliverable is the provision of licenses, SLAs are typically associated with ongoing services, support, or uptime guarantees. For software licenses, SLAs might relate to the availability of download portals, timely delivery of keys, or support response times for licensing issues. The absence of explicit SLAs makes it harder to quantitatively measure the contractor's performance beyond simply delivering the licenses.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: IT AND TELECOM - END USER

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

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, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $87,534,855

Exercised Options: $87,259,783

Current Obligation: $87,259,783

Actual Outlays: $34,896,793

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 70RTAC21A00000001

IDV Type: BPA

Timeline