DHS Coast Guard awards $2.55M for enterprise application support to Microsoft Corporation

Contract Overview

Contract Amount: $2,552,782 ($2.6M)

Contractor: Microsoft Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2025-03-30

End Date: 2025-05-15

Contract Duration: 46 days

Daily Burn Rate: $55.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SUPPORT ENTERPRISE APPLICATIONS AND INFORMATION SYSTEMS TO ASSIST IN THE SUSTAINMENT AND IMPLEMENTATION OF SYSTEMS UTILIZING OUTCOME-DRIVEN SERVICE DELIVERY MANAGEMENT, INCLUDING PROACTIVE SERVICES, REACTIVE SERVICES, AND SPECIALIZED ENGINEER SUPPORT

Place of Performance

Location: ALEXANDRIA, LOUDOUN County, DISTRICT OF COLUMBIA, 20598

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $2.6 million to MICROSOFT CORPORATION for work described as: SUPPORT ENTERPRISE APPLICATIONS AND INFORMATION SYSTEMS TO ASSIST IN THE SUSTAINMENT AND IMPLEMENTATION OF SYSTEMS UTILIZING OUTCOME-DRIVEN SERVICE DELIVERY MANAGEMENT, INCLUDING PROACTIVE SERVICES, REACTIVE SERVICES, AND SPECIALIZED ENGINEER SUPPORT Key points: 1. Contract focuses on sustaining and implementing systems through outcome-driven service delivery. 2. Services include proactive, reactive, and specialized engineering support. 3. The contract is a firm-fixed-price definitive contract. 4. Awarded to a single, large incumbent contractor. 5. Duration is relatively short at 46 days. 6. Geographic location is Washington D.C.

Value Assessment

Rating: questionable

The contract value of $2.55M for a 46-day period appears high for 'Other Computer Related Services'. Benchmarking against similar enterprise application support contracts is difficult without more detailed service descriptions. The firm-fixed-price structure aims to control costs, but the overall value proposition is unclear given the short duration and lack of competitive bidding.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This raises concerns about whether the government obtained the best possible price and service. Without a competitive process, it's difficult to assess if the selected vendor's pricing is aligned with market rates or if alternative solutions were considered.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the potential for competitive pressure to drive down prices is absent.

Public Impact

Benefits the U.S. Coast Guard by ensuring the sustainment and implementation of critical enterprise applications and information systems. Services delivered will support the operational readiness and efficiency of Coast Guard missions. Geographic impact is primarily within Washington D.C., where the services are likely to be performed. Workforce implications are minimal given the short duration and likely focus on specialized support rather than large-scale project teams.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in suboptimal pricing.
Short contract duration could indicate a stop-gap measure or a narrowly defined need.
Sole-source award limits visibility into alternative solutions and market competitiveness.

Positive Signals

Award to a known entity (Microsoft) may ensure continuity of essential services.
Firm-fixed-price contract provides cost certainty for the government.
Focus on outcome-driven service delivery suggests a performance-oriented approach.

Sector Analysis

This contract falls under the 'Other Computer Related Services' category, which is a broad area within the IT services sector. The IT services market is highly competitive, with numerous providers offering enterprise application support. However, specific niche services or support for proprietary systems can sometimes lead to limited competition. The value of this contract is relatively small compared to major IT system development or sustainment programs.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. Given the award to Microsoft Corporation, a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless Microsoft engages small businesses for specific support tasks not detailed in this award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's contracting and program management offices. As a definitive contract, it is subject to standard federal procurement regulations. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any issues of fraud, waste, or abuse arise.

Related Government Programs

Enterprise Application Support Services
IT Professional Services
Software and Application Development
Information Technology Infrastructure Services

Risk Flags

Sole-source award
High daily rate potential
Lack of detailed scope

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $2.6 million to MICROSOFT CORPORATION. SUPPORT ENTERPRISE APPLICATIONS AND INFORMATION SYSTEMS TO ASSIST IN THE SUSTAINMENT AND IMPLEMENTATION OF SYSTEMS UTILIZING OUTCOME-DRIVEN SERVICE DELIVERY MANAGEMENT, INCLUDING PROACTIVE SERVICES, REACTIVE SERVICES, AND SPECIALIZED ENGINEER SUPPORT

Who is the contractor on this award?

The obligated recipient is MICROSOFT CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Coast Guard).

What is the total obligated amount?

The obligated amount is $2.6 million.

What is the period of performance?

Start: 2025-03-30. End: 2025-05-15.

What specific enterprise applications and information systems are being supported under this contract?

The provided data does not specify the exact enterprise applications or information systems that Microsoft Corporation will be supporting. The description is general, referring to 'enterprise applications and information systems' that require sustainment and implementation. To provide a more detailed answer, access to the contract's statement of work (SOW) or detailed task orders would be necessary. This information is crucial for understanding the scope of work, the criticality of the systems, and for performing a more accurate value assessment.

Why was this contract awarded on a sole-source basis instead of being competed?

The justification for a sole-source award is not provided in the data. Typically, sole-source awards are made when only one responsible source can provide the required supplies or services, or when there is a compelling urgency. For IT services, this could be due to proprietary software knowledge, unique integration requirements with existing systems, or a need for continuity with a previous provider. Without the official justification (e.g., a Justification and Approval document), it is impossible to definitively state the reason for the sole-source award. This lack of competition is a key area for scrutiny.

How does the $2.55M value for a 46-day contract compare to similar enterprise application support contracts?

The value of $2.55 million for a 46-day contract translates to a daily rate of approximately $55,435. This daily rate appears high for general 'Other Computer Related Services.' However, without knowing the specific systems supported, the complexity of the required tasks (e.g., critical system sustainment, complex implementation, specialized engineering), and the personnel involved (e.g., senior engineers, architects), a direct comparison is challenging. Typical IT support contracts vary widely in cost based on scope, duration, and the level of expertise required. A more precise benchmark would require comparing against contracts with similar service descriptions and criticality levels.

What is Microsoft Corporation's track record with the U.S. Coast Guard for similar services?

Microsoft Corporation is a major technology provider, and it is highly probable they have a significant track record with various government agencies, including the Department of Homeland Security and its components like the U.S. Coast Guard. This contract's sole-source nature might suggest a continuation of services or support for Microsoft's own products (e.g., Azure, Office 365, Dynamics). A deeper dive into historical contract data for the Coast Guard and DHS would reveal the extent and nature of their previous engagements, including performance history and any past issues or successes related to enterprise application support.

What are the potential risks associated with a sole-source award to Microsoft for this service?

The primary risk associated with a sole-source award is the potential for overpayment due to the lack of competitive pricing. Taxpayers may not be receiving the best value for their money. Another risk is vendor lock-in, where the agency becomes overly reliant on a single provider, making it difficult or costly to switch to alternatives in the future. Furthermore, without competition, there's less incentive for the contractor to innovate or provide exceptional service beyond the contract's minimum requirements. The short duration might mitigate some long-term risks, but the immediate cost and lack of market validation remain concerns.

What is the expected outcome or performance metric for this contract?

The contract emphasizes 'outcome-driven service delivery management.' While specific metrics are not detailed in the provided summary, this suggests that performance will be evaluated based on the achievement of defined outcomes rather than just the completion of tasks. These outcomes likely relate to the successful sustainment and implementation of the specified enterprise applications and information systems, ensuring their availability, reliability, and functionality to support Coast Guard operations. The firm-fixed-price nature implies that Microsoft is responsible for delivering these outcomes within the agreed-upon price.

Industry Classification

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

Product/Service Code: OFFICE SUPPLIES AND DEVICES

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: 12012 SUNSET HILLS RD, RESTON, VA, 20190

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $2,552,782

Exercised Options: $2,552,782

Current Obligation: $2,552,782

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline