DHS awards $27.9M for Microsoft licenses, a significant investment in IT infrastructure

Contract Overview

Contract Amount: $27,914,102 ($27.9M)

Contractor: Dell Federal Systems L.P

Awarding Agency: Department of Homeland Security

Start Date: 2023-03-27

End Date: 2024-03-26

Contract Duration: 365 days

Daily Burn Rate: $76.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MICROSOFT SUBSCRIPTION LICENSES AND SOFTWARE ASSURANCE BPA CALL ORDER

Place of Performance

Location: SPRINGFIELD, FAIRFAX County, VIRGINIA, 22150

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $27.9 million to DELL FEDERAL SYSTEMS L.P for work described as: MICROSOFT SUBSCRIPTION LICENSES AND SOFTWARE ASSURANCE BPA CALL ORDER Key points: 1. Value for money assessed through benchmarking against similar software licensing agreements. 2. Competition dynamics indicate a full and open process, potentially driving competitive pricing. 3. Risk indicators are low given the nature of software licensing and established vendor. 4. Performance context relies on vendor's ability to deliver timely and accurate license fulfillment. 5. Sector positioning places this within the broader IT services and software procurement landscape.

Value Assessment

Rating: good

The contract value of $27.9 million for Microsoft licenses appears reasonable when benchmarked against typical enterprise software agreements. While specific per-unit costs are not detailed here, the firm-fixed-price structure suggests that the government has a clear understanding of its costs. Comparisons to similar large-scale software procurements by other federal agencies would provide further context on value, but the scale of this award is substantial and aligns with significant IT modernization efforts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but a full and open competition generally fosters a competitive environment, which can lead to better pricing and terms for the government. This approach maximizes the opportunity for diverse vendors to participate and offer their best solutions.

Taxpayer Impact: A full and open competition ensures that taxpayer dollars are used efficiently by leveraging market forces to achieve the best possible price for essential Microsoft software licenses.

Public Impact

Federal employees within the Department of Homeland Security will benefit from access to necessary Microsoft software. Essential IT services and productivity tools are delivered through this licensing agreement. The geographic impact is nationwide, supporting DHS operations across various locations. Workforce implications include enabling seamless collaboration and operational efficiency for DHS personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with Microsoft products over the long term.
Reliance on a single software vendor may limit flexibility in future IT strategy.
Ensuring continuous availability and support for the licensed software is critical.

Positive Signals

Standardization of software across DHS can improve interoperability and reduce support costs.
Access to up-to-date software ensures employees have modern tools for their tasks.
Firm-fixed-price contract provides cost certainty for the duration of the award.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on software licensing and maintenance. The market for enterprise software licenses, particularly for major vendors like Microsoft, is substantial and highly competitive among resellers and integrators. This award represents a significant portion of the government's spending on essential productivity software, enabling critical operations for a major federal agency.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside requirement for this particular award. However, the prime contractor, Dell Federal Systems L.P., may engage small businesses as subcontractors for support services or hardware integration related to the software deployment. Further analysis would be needed to determine the extent of small business subcontracting.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Homeland Security's contracting officers and program managers. Accountability measures are embedded in the firm-fixed-price terms, requiring delivery of specified licenses. Transparency is generally maintained through federal procurement databases, though detailed usage reports may be internal to the agency. Inspector General jurisdiction would apply in cases of fraud or mismanagement.

Related Government Programs

Microsoft Enterprise Agreements
Software Licensing and Maintenance Services
Department of Homeland Security IT Procurement
General Services Administration (GSA) Schedules

Risk Flags

Potential for vendor lock-in
Reliance on single software provider
Need for robust license management

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $27.9 million to DELL FEDERAL SYSTEMS L.P. MICROSOFT SUBSCRIPTION LICENSES AND SOFTWARE ASSURANCE BPA CALL ORDER

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 (Office of Procurement Operations).

What is the total obligated amount?

The obligated amount is $27.9 million.

What is the period of performance?

Start: 2023-03-27. End: 2024-03-26.

What is the historical spending pattern for Microsoft software licenses within the Department of Homeland Security?

Analyzing historical spending on Microsoft software licenses within DHS is crucial for understanding trends and identifying potential cost efficiencies. While this specific award is for $27.9 million, a broader review of past contracts would reveal the agency's overall investment in Microsoft products over several fiscal years. This includes examining spending across different DHS components and for various Microsoft product suites (e.g., Office 365, Windows Server, Azure services). Understanding these patterns can help identify periods of increased investment, potential consolidation opportunities, or areas where spending may have fluctuated due to technology shifts or budget cycles. Benchmarking this award against previous DHS expenditures on similar licenses would provide context on whether this represents an increase, decrease, or stable level of spending.

How does the pricing of these Microsoft licenses compare to commercial market rates or other federal agency agreements?

Benchmarking the pricing of these Microsoft licenses against commercial market rates and other federal agency agreements is essential for ensuring value for money. Federal agencies often benefit from negotiated enterprise agreements and volume discounts that can lead to lower per-unit costs compared to commercial entities. However, the specific terms of the Business and Administrative Program (BPA) Call Order, including the exact license types and support levels, must be considered. Comparing the effective per-user or per-device cost to publicly available pricing from Microsoft or major resellers, as well as to data from similar large-scale federal software procurements, would provide a robust assessment. Deviations from expected pricing could indicate unique service requirements, specialized support, or potential areas for negotiation in future awards.

What are the specific Microsoft products and services covered under this $27.9 million BPA Call Order?

The provided data indicates the award is for 'MICROSOFT SUBSCRIPTION LICENSES AND SOFTWARE ASSURANCE BPA CALL ORDER,' suggesting a broad scope of Microsoft software. However, the precise products and services are not itemized. Typically, such agreements cover core productivity suites like Microsoft 365 (including Office applications, Teams, OneDrive), operating system licenses (Windows), server software (Windows Server, SQL Server), and potentially cloud services. Software Assurance is a critical component, providing rights to new versions, technical support, and training benefits. A detailed breakdown of the specific SKUs, quantities, and subscription terms would be necessary to fully assess the scope and value of this contract and to compare it accurately with other procurements.

What is the track record of Dell Federal Systems L.P. in delivering similar large-scale Microsoft software contracts to federal agencies?

Dell Federal Systems L.P. has a significant track record as a major IT hardware and software reseller for the federal government. Their experience in delivering large-scale Microsoft software licenses and associated support services is generally well-established. Assessing their performance on this specific contract would involve reviewing past performance evaluations, on-time delivery rates, and responsiveness to any issues that may have arisen. Given their size and established presence, it is likely they have successfully executed numerous similar agreements. However, a deeper dive into contract performance databases and agency feedback would provide a more granular understanding of their specific capabilities and reliability in fulfilling complex software licensing requirements for agencies like DHS.

What are the potential risks associated with relying on a single vendor like Microsoft for such a substantial portion of IT infrastructure?

Relying heavily on a single vendor like Microsoft for a significant portion of IT infrastructure, as implied by this large licensing award, presents several potential risks. Vendor lock-in is a primary concern, making it difficult and costly to switch to alternative solutions or embrace open-source technologies in the future. This dependence can also limit negotiation leverage in subsequent contract renewals, potentially leading to price increases. Furthermore, changes in Microsoft's product roadmap, licensing policies, or business strategy could directly impact DHS operations. Security vulnerabilities discovered in Microsoft products could also pose a widespread risk across the agency. Diversifying the technology stack and maintaining strong vendor management practices are key mitigation strategies.

Industry Classification

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

Product/Service Code: IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

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

Financial Breakdown

Contract Ceiling: $27,914,102

Exercised Options: $27,914,102

Current Obligation: $27,914,102

Actual Outlays: $27,920,823

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 70RTAC21A00000001

IDV Type: BPA

Timeline