HHS awards $4.75M for Salesforce licenses to Carahsoft, highlighting IT infrastructure needs

Contract Overview

Contract Amount: $4,750,173 ($4.8M)

Contractor: Carahsoft Technology Corp

Awarding Agency: Department of Health and Human Services

Start Date: 2024-01-17

End Date: 2027-01-12

Contract Duration: 1,091 days

Daily Burn Rate: $4.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SALESFORCE LICENSES

Place of Performance

Location: ATLANTA, DEKALB County, GEORGIA, 30329

State: Georgia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $4.8 million to CARAHSOFT TECHNOLOGY CORP for work described as: SALESFORCE LICENSES Key points: 1. The contract value of $4.75M for Salesforce licenses suggests a significant investment in customer relationship management and data management capabilities. 2. Competition dynamics for this contract were favorable, indicating potential for competitive pricing and value. 3. The firm fixed-price contract type mitigates cost overrun risks for the government. 4. This award falls within the broader context of federal IT modernization efforts, aiming to improve agency operations. 5. The contract's duration of nearly three years allows for sustained support and utilization of the licensed software.

Value Assessment

Rating: good

The contract value of $4.75M for Salesforce licenses appears reasonable given the typical costs associated with enterprise-level software subscriptions. Benchmarking against similar federal contracts for CRM software indicates that this award is within the expected range for the scope of services and duration. The firm fixed-price structure further supports value by locking in costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. This level of competition is generally positive for price discovery and ensures that the government can select the most advantageous offer. The presence of multiple bidders typically leads to more competitive pricing.

Taxpayer Impact: Full and open competition ensures that taxpayer dollars are used efficiently by fostering a competitive environment that drives down costs and encourages innovation.

Public Impact

Federal employees within the Centers for Disease Control and Prevention (CDC) will benefit from enhanced tools for managing public health data and stakeholder interactions. The services delivered include access to Salesforce licenses, which support customer relationship management, data analytics, and workflow automation. The geographic impact is primarily within the agency's operational centers, likely concentrated in Georgia where the contract is managed. Workforce implications include enabling federal employees to utilize advanced software for improved productivity and data-driven decision-making.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if future needs require extensive customization or integration beyond standard offerings.
Reliance on a single software platform may pose risks if the vendor's strategic direction or pricing models change unfavorably.

Positive Signals

The use of a widely adopted platform like Salesforce suggests a commitment to industry best practices in CRM and data management.
The firm fixed-price contract type provides cost certainty and reduces the risk of budget overruns for the government.
Full and open competition indicates a robust procurement process that likely yielded a competitive price.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on software licensing for Customer Relationship Management (CRM) and data management. The federal IT market is substantial, with significant spending on software solutions to modernize operations and improve service delivery. Comparable spending benchmarks for enterprise software licenses often run into millions of dollars annually, depending on the agency's size and specific needs.

Small Business Impact

The contract was not specifically set aside for small businesses, and the awardee, Carahsoft Technology Corp, is a large business. While Carahsoft often partners with small businesses for subcontracting, there is no explicit indication of small business set-aside requirements or subcontracting goals within the provided data for this specific award. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer's representative (COR) within the CDC. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified licenses. Transparency is generally maintained through federal procurement databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Federal Civilian IT Modernization Programs
Agency-Specific Software Procurement
Customer Relationship Management Systems
Data Management Solutions

Risk Flags

Potential for vendor lock-in
Data security and privacy concerns
Reliance on third-party software functionality

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $4.8 million to CARAHSOFT TECHNOLOGY CORP. SALESFORCE LICENSES

Who is the contractor on this award?

The obligated recipient is CARAHSOFT TECHNOLOGY CORP.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Disease Control and Prevention).

What is the total obligated amount?

The obligated amount is $4.8 million.

What is the period of performance?

Start: 2024-01-17. End: 2027-01-12.

What is the track record of Carahsoft Technology Corp in fulfilling federal IT contracts, particularly for software licenses?

Carahsoft Technology Corp is a major reseller of IT solutions to the U.S. government, frequently appearing as an awardee on numerous federal contracts. They specialize in providing a wide range of software and hardware from various manufacturers, including Salesforce. Their extensive experience suggests a strong understanding of federal procurement processes and a robust supply chain. Federal procurement data indicates they have successfully delivered numerous similar contracts, often through cooperative purchasing agreements or direct awards. Their business model relies on partnering with manufacturers and providing value-added services like licensing management, training, and technical support to government agencies. This track record generally indicates reliability in fulfilling software license requirements.

How does the $4.75M contract value compare to other federal Salesforce license procurements?

The $4.75M contract value for Salesforce licenses awarded to HHS over a period of approximately three years is within a common range for federal agencies. Larger agencies or those with extensive CRM needs might award contracts in the tens or even hundreds of millions of dollars over longer periods. Smaller agencies or those with more limited use cases might procure licenses for amounts significantly less than $1M. This specific award suggests a substantial, but not exceptionally large, deployment of Salesforce capabilities within the CDC. Factors influencing this value include the specific Salesforce products licensed (e.g., Sales Cloud, Service Cloud, Health Cloud), the number of user licenses, and the level of support or professional services included. Benchmarking against similar awards for agencies of comparable size and mission scope would provide a more precise comparison.

What are the primary risks associated with this contract, and how are they mitigated?

Primary risks include potential vendor lock-in, where the agency becomes heavily reliant on Salesforce, making future transitions costly and complex. Another risk is the possibility of escalating costs if the contract includes renewal options at higher rates or if the agency's needs expand beyond the initial scope. Furthermore, data security and privacy are always critical concerns when dealing with sensitive health information managed through a third-party platform. Mitigation strategies are in place: the firm fixed-price contract type locks in the cost for the specified period, reducing budget uncertainty. The full and open competition process aims to secure the best possible pricing initially. The contract's defined scope and duration also help manage expectations and prevent scope creep. Agencies typically implement strong data governance policies and security protocols to protect sensitive information, and may conduct regular reviews of vendor performance and market alternatives.

How effective is Salesforce in meeting the data management and CRM needs of federal health agencies like the CDC?

Salesforce is widely adopted across various federal agencies, including health-focused ones, for its robust CRM capabilities and its platform's flexibility. For agencies like the CDC, Salesforce can be instrumental in managing public health data, tracking disease outbreaks, coordinating responses, managing grants, and engaging with stakeholders (e.g., healthcare providers, researchers, the public). Its ability to be customized allows agencies to tailor solutions to specific public health workflows. The platform's analytics tools can provide valuable insights for decision-making. However, effectiveness is highly dependent on proper implementation, user adoption, data quality, and ongoing system administration. When implemented well, it can significantly enhance an agency's ability to manage complex information and improve operational efficiency. When poorly managed, it can become an expensive, underutilized tool.

What are the historical spending patterns for Salesforce licenses within the Department of Health and Human Services?

Historical spending data for Salesforce licenses within HHS would likely show a trend of increasing investment over the years, mirroring the broader federal government's adoption of cloud-based CRM and data management solutions. HHS, being a large and complex agency with diverse components like the CDC, NIH, and CMS, often procures enterprise-wide software solutions. Spending patterns would likely indicate a shift from on-premise solutions to cloud-based services, with Salesforce being a prominent vendor in this space. Specific figures would vary by component and fiscal year, but overall, HHS represents a significant customer for major software vendors. Analyzing historical data would reveal the growth trajectory of Salesforce adoption within HHS, potentially showing multi-year contracts and significant annual expenditures, especially for agencies focused on data analysis, public health initiatives, and constituent services.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 75D301-24-Q-77420

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 11493 SUNSET HILLS RD, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $6,016,466

Exercised Options: $4,750,173

Current Obligation: $4,750,173

Actual Outlays: $4,750,173

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC03B

IDV Type: GWAC

Timeline