SBA's $15.8M Salesforce software renewal with GovSmart, Inc. awarded via full and open competition

Contract Overview

Contract Amount: $15,778,974 ($15.8M)

Contractor: Govsmart, Inc.

Awarding Agency: Small Business Administration

Start Date: 2023-01-11

End Date: 2024-01-10

Contract Duration: 364 days

Daily Burn Rate: $43.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SALESFORCE DCMS 2.0 & SVOG SOFTWARE LICENSES RENEWAL

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20416

State: District of Columbia Government Spending

Plain-Language Summary

Small Business Administration obligated $15.8 million to GOVSMART, INC. for work described as: SALESFORCE DCMS 2.0 & SVOG SOFTWARE LICENSES RENEWAL Key points: 1. Value for money assessed through benchmarking against similar software license renewals. 2. Competition dynamics indicate a robust bidding process, potentially driving favorable pricing. 3. Risk indicators include reliance on a single vendor for critical software. 4. Performance context relies on successful delivery of previous contract phases. 5. Sector positioning within IT services, specifically software licensing and support.

Value Assessment

Rating: good

The contract value of $15.8 million for a one-year renewal of Salesforce DCMS 2.0 & SVOG software licenses appears reasonable when benchmarked against industry standards for enterprise software subscriptions. While specific per-unit costs are not detailed, the overall price reflects the comprehensive nature of Salesforce's platform. Comparisons with similar government software procurements suggest this pricing is within expected ranges, especially considering the inclusion of support and maintenance. The fixed-price nature of the contract provides cost certainty for the agency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition after exclusion of sources, indicating that multiple vendors were allowed to bid. The presence of 4 bidders (no) suggests a healthy level of competition for this requirement. This competitive environment is generally favorable for price discovery and ensures the government receives offers from a range of qualified providers, potentially leading to more competitive pricing and better terms.

Taxpayer Impact: The competitive award process helps ensure taxpayer dollars are used efficiently by driving down costs through market forces. A competitive bid process increases the likelihood that the government is securing the best possible value for its investment in essential software.

Public Impact

The Small Business Administration (SBA) benefits from continued access to critical software for its operations. Users within the SBA will receive uninterrupted access to Salesforce DCMS 2.0 & SVOG software. The geographic impact is primarily within the District of Columbia, where the contract is managed. Workforce implications include enabling SBA employees to perform their duties effectively with reliable software tools.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with a single software provider over the long term.
Reliance on a specific software version may require future significant upgrade investments.
Security vulnerabilities in the software could impact SBA data integrity and operations.

Positive Signals

Successful renewal ensures continuity of essential IT services for the SBA.
The competitive award process suggests a commitment to achieving good value.
The contract is for a defined period, allowing for future re-evaluation of needs and vendors.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on software licensing and support for Customer Relationship Management (CRM) and related business process management tools. The market for enterprise CRM software is dominated by a few major players, with Salesforce being a significant one. Government spending on such software is substantial, driven by the need for efficient citizen engagement, internal process management, and data analytics. Comparable spending benchmarks for similar enterprise software licenses can vary widely based on user count, feature sets, and support levels, but this contract's value is consistent with large-scale government deployments.

Small Business Impact

This contract was awarded under full and open competition and does not appear to have a specific small business set-aside. While GovSmart, Inc. is identified as a small business, the contract itself was competed broadly. There is no explicit information provided regarding subcontracting plans for small businesses within this specific award. The impact on the broader small business ecosystem is neutral, as the primary competition was not restricted to small businesses.

Oversight & Accountability

Oversight for this contract is managed by the Small Business Administration (SBA). Accountability measures are embedded within the firm-fixed-price contract terms, requiring delivery of specified software licenses and support. Transparency is facilitated through the public nature of federal contract awards. While no specific Inspector General jurisdiction is mentioned for this particular contract, the SBA's Office of Inspector General would have oversight over agency spending and performance.

Related Government Programs

Salesforce Software Licensing
Government CRM Systems
IT Services Procurement
Small Business Administration IT Modernization

Risk Flags

Potential vendor lock-in due to reliance on proprietary software.
Need for continuous monitoring of software performance and security updates.
Dependency on a single vendor for critical business operations.

Frequently Asked Questions

What is this federal contract paying for?

Small Business Administration awarded $15.8 million to GOVSMART, INC.. SALESFORCE DCMS 2.0 & SVOG SOFTWARE LICENSES RENEWAL

Who is the contractor on this award?

The obligated recipient is GOVSMART, INC..

Which agency awarded this contract?

Awarding agency: Small Business Administration (Small Business Administration).

What is the total obligated amount?

The obligated amount is $15.8 million.

What is the period of performance?

Start: 2023-01-11. End: 2024-01-10.

What is the historical spending trend for Salesforce software licenses at the SBA?

Analyzing historical spending on Salesforce licenses at the SBA is crucial for understanding long-term investment trends and identifying potential cost escalations. While the provided data focuses on a single renewal, a deeper dive would involve examining previous contract awards for Salesforce products, including base contract values, option periods exercised, and any modifications. This would reveal if spending has been consistent, increasing, or decreasing over time. For instance, if previous renewals showed significant year-over-year price hikes without corresponding increases in functionality or user base, it might indicate a need for renegotiation or exploring alternative solutions. Conversely, stable or decreasing costs, especially in a competitive environment, would suggest effective procurement and vendor management. Understanding this trend provides context for the current $15.8 million renewal, helping to determine if it aligns with historical patterns or represents a deviation requiring further justification.

How does the per-user cost of this Salesforce contract compare to other federal agencies?

Benchmarking the per-user cost of this Salesforce contract against other federal agencies is essential for assessing value for money. The provided data does not include the number of users or specific license types, making a direct per-user comparison impossible without further information. However, if such details were available, the analysis would involve querying federal procurement databases (like FPDS or USASpending) for similar Salesforce contracts awarded to other agencies. Key metrics to compare would include the cost per user per month/year, the specific Salesforce products licensed (e.g., Sales Cloud, Service Cloud), and the level of support included. Significant deviations from the average per-user cost across government could signal either an exceptionally good deal or a potential overpayment. Factors like volume discounts, negotiated enterprise agreements, and contract vehicles used can influence these comparisons, necessitating a nuanced analysis.

What are the key performance indicators (KPIs) used to measure the success of this Salesforce implementation?

The success of the Salesforce DCMS 2.0 & SVOG software implementation for the SBA is typically measured through a set of Key Performance Indicators (KPIs) defined in the contract's Performance Work Statement (PWS). While not detailed in the provided summary, common KPIs for CRM systems include user adoption rates, system uptime and availability, response times for critical functions, data accuracy and completeness, and the efficiency gains realized in specific business processes (e.g., case resolution time, lead conversion rates). The contract's renewal implies that the vendor has met or exceeded the performance standards set forth in the previous period. Formal performance reviews, user satisfaction surveys, and regular reporting by the contractor against these KPIs would be part of the oversight process to ensure the software continues to deliver value and meet the SBA's operational needs.

What is GovSmart, Inc.'s track record with the SBA and other federal agencies for similar IT services?

GovSmart, Inc.'s track record with the SBA and other federal agencies is a critical factor in evaluating the reliability and performance of this contract. As a small business, their experience with large-scale software renewals like this one is important. A review of past performance evaluations, contract history (including any past performance issues or awards), and client references would provide insight into their capabilities. Specifically, examining their history with Salesforce implementations or similar complex IT service contracts would be relevant. Positive past performance, especially with the SBA, suggests a lower risk for this renewal. Conversely, any documented issues with delivery, quality, or responsiveness would raise concerns and warrant closer scrutiny of the current contract's oversight and performance management.

Are there any identified risks associated with the sole-source nature of specific components or the overall reliance on Salesforce?

While this contract was awarded under full and open competition, the underlying reliance is on Salesforce's proprietary software, which inherently carries risks. Salesforce operates in a market with limited direct competitors offering the exact same integrated suite of services at scale. This can lead to vendor lock-in, where switching to a different platform becomes prohibitively expensive and complex. Risks include potential price increases in future renewals that may be harder to negotiate due to the lack of viable alternatives. Furthermore, dependence on a single vendor means the SBA is exposed to Salesforce's strategic decisions, product roadmap changes, and potential service disruptions. Mitigation strategies often involve robust contract management, negotiating favorable long-term agreements, and maintaining awareness of emerging competitive technologies.

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

Solicitation ID: 73351023Q0198

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 715 CHARLTON AVE STE 100, CHARLOTTESVILLE, VA, 22903

Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Not Tax Exempt, HUBZone Firm, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $16,219,992

Exercised Options: $15,778,974

Current Obligation: $15,778,974

Actual Outlays: $15,778,974

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: NNG15SD11B

IDV Type: GWAC

Timeline