DHS awards $15.6M for Salesforce licenses, raising questions on value and competition

Contract Overview

Contract Amount: $15,611,331 ($15.6M)

Contractor: Blue Tech Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2025-09-19

End Date: 2026-08-11

Contract Duration: 326 days

Daily Burn Rate: $47.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SALESFORCE SOFTWARE AS A SERVICE LICENSES (11 MO POP)

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92110

State: California Government Spending

Plain-Language Summary

Department of Homeland Security obligated $15.6 million to BLUE TECH INC. for work described as: SALESFORCE SOFTWARE AS A SERVICE LICENSES (11 MO POP) Key points: 1. The contract's value appears reasonable given the duration and scope of Salesforce services. 2. Limited competition may have impacted the final price, warranting further scrutiny. 3. The fixed-price contract structure offers some cost certainty, but performance monitoring is key. 4. This contract supports critical IT infrastructure for the TSA's operational needs. 5. The use of a large, established software provider like Salesforce is common in government. 6. The duration of the contract (326 days) is relatively short, suggesting potential for re-competition or modification.

Value Assessment

Rating: fair

The total award of $15.6 million over approximately 11 months for Salesforce Software as a Service licenses appears within a reasonable range for enterprise-level software deployments. However, without specific details on the number of users, modules licensed, and service levels, a precise value-for-money assessment is challenging. Benchmarking against similar government or commercial Salesforce contracts would be necessary to confirm if the pricing is competitive. The fixed-price nature of the contract provides cost predictability, but the agency must ensure it is receiving the full value of the licensed services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while competition was sought, certain sources were excluded. With 6 bidders, the competition level is moderate, but the exclusion of specific sources raises questions about the breadth of the competitive landscape. A more robust competition might have yielded better pricing. The agency should provide justification for the exclusion of any potential bidders to ensure fair market access and optimal price discovery.

Taxpayer Impact: The moderate competition, coupled with source exclusions, suggests that taxpayers may not have benefited from the most aggressive pricing achievable through a fully open and unrestricted bidding process.

Public Impact

The Transportation Security Administration (TSA) benefits directly through enhanced IT capabilities. Essential software licenses for Salesforce are delivered, supporting various operational functions. The primary geographic impact is within the TSA's operational footprint, likely nationwide. The contract supports IT professionals and potentially impacts the efficiency of TSA personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for higher costs due to limited competition and source exclusions.
Risk of vendor lock-in with a major software provider.
Need for robust performance monitoring to ensure service delivery meets expectations.

Positive Signals

Fixed-price contract provides cost certainty for the awarded period.
Use of a widely adopted and supported software platform (Salesforce).
Moderate number of bidders suggests some level of market interest.

Sector Analysis

This contract falls within the broader Information Technology (IT) sector, specifically focusing on Software as a Service (SaaS) solutions. The market for enterprise CRM and business process management software, like Salesforce, is highly competitive among major vendors. Government spending in this area is substantial, driven by the need for modern, scalable IT infrastructure. Comparable spending benchmarks would involve analyzing other federal contracts for similar Salesforce deployments or competing SaaS solutions across various agencies.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract, nor does it mention subcontracting goals. The award to 'BLUE TECH INC.' (assuming this is the prime contractor) and the nature of enterprise software licensing suggest that small businesses may not be directly involved as prime contractors in this specific award. Further investigation into subcontracting plans would be needed to assess any potential impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically reside within the Department of Homeland Security (DHS) and the Transportation Security Administration (TSA). Contract performance monitoring, adherence to terms, and financial accountability are managed by the contracting officer and the program office. Transparency is generally maintained through contract databases like FPDS. Inspector General oversight may be invoked if performance issues or potential fraud are identified.

Related Government Programs

Salesforce Software Licenses
IT Services
Cloud Computing Services
Enterprise Resource Planning Software
Department of Homeland Security IT Contracts

Risk Flags

Limited competition may impact price.
Justification for source exclusion needs review.
Performance monitoring is critical for SaaS value.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $15.6 million to BLUE TECH INC.. SALESFORCE SOFTWARE AS A SERVICE LICENSES (11 MO POP)

Who is the contractor on this award?

The obligated recipient is BLUE TECH INC..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Transportation Security Administration).

What is the total obligated amount?

The obligated amount is $15.6 million.

What is the period of performance?

Start: 2025-09-19. End: 2026-08-11.

What specific Salesforce modules and user licenses are included in this $15.6 million award?

The provided data summary does not specify the exact Salesforce modules (e.g., Sales Cloud, Service Cloud, Marketing Cloud) or the number of user licenses covered under this $15.6 million contract. This level of detail is crucial for a thorough value-for-money assessment. Understanding the specific functionalities and user base allows for a more accurate comparison against market rates and similar government procurements. Without this information, it's difficult to determine if the pricing is competitive or if the agency is acquiring the necessary capabilities efficiently. Further analysis of the contract's statement of work (SOW) or detailed pricing breakdown would be required.

How does the per-user cost of these Salesforce licenses compare to government-wide enterprise agreements or commercial benchmarks?

A direct per-user cost comparison is not possible with the current data, as the number of users and specific licenses are not detailed. However, government-wide agreements, such as those facilitated by the General Services Administration (GSA) or Enterprise License Agreements (ELAs) negotiated by large agencies, often secure volume discounts that can significantly lower per-user costs compared to individual contract awards. Commercial benchmarks for Salesforce licenses vary widely based on the edition (e.g., Essentials, Professional, Enterprise, Unlimited) and add-on features. If this contract's pricing, once broken down by user and module, exceeds typical ELA rates or established commercial benchmarks for comparable editions, it could indicate a potential overpayment or a missed opportunity for better value.

What is the justification for excluding certain sources in this 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award?

The designation 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' implies that while the solicitation was publicly available, specific potential bidders were intentionally excluded from consideration. The justification for such exclusions typically relates to factors like the specific technical requirements of the solicitation, the need for compatibility with existing systems, past performance issues with certain vendors, or specific socioeconomic program requirements. Without the agency's formal justification document, it is impossible to ascertain the precise reasons. However, such exclusions can limit the competitive pool, potentially leading to higher prices and reduced innovation, and warrant scrutiny to ensure they are well-founded and in the government's best interest.

What is the track record of 'BLUE TECH INC.' in delivering similar Salesforce software and IT services to federal agencies?

Information regarding 'BLUE TECH INC.'s' specific track record with federal Salesforce implementations is not provided in the summary data. A comprehensive analysis would require examining the company's past performance records, including contract history, past performance evaluations (e.g., CPARS reports), and any prior awards for similar IT services or software licensing. Assessing their experience with large-scale federal IT projects, particularly those involving complex SaaS platforms like Salesforce, is crucial for understanding the risk associated with this award. A history of successful, on-time, and within-budget delivery would be a positive indicator, while past issues could signal potential performance risks for the TSA.

How does this $15.6 million award compare to historical TSA or DHS spending on Salesforce or similar CRM/IT solutions?

To compare this $15.6 million award to historical spending, one would need access to historical contract data for the TSA and DHS. This would involve querying databases like FPDS or USASpending to identify previous awards for Salesforce licenses, related professional services, or comparable IT solutions. Key metrics for comparison would include the total dollar value of similar contracts, their duration, the number of bidders, and the specific services or software modules procured. Understanding historical spending patterns can reveal trends, identify potential cost increases over time, and highlight whether this award represents a significant deviation from established spending levels for similar capabilities.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4025 HANCOCK ST. STE. 100, SAN DIEGO, CA, 92110

Business Categories: Category Business, Corporate Entity Not Tax Exempt, HUBZone Firm, Manufacturer of Goods, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $15,611,331

Exercised Options: $15,611,331

Current Obligation: $15,611,331

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SD00B

IDV Type: GWAC

Timeline