HHS awards $30M Microsoft ELA to Dell Federal, highlighting software licensing needs

Contract Overview

Contract Amount: $29,975,589 ($30.0M)

Contractor: Dell Federal Systems L.P

Awarding Agency: Department of Health and Human Services

Start Date: 2025-04-01

End Date: 2026-03-31

Contract Duration: 364 days

Daily Burn Rate: $82.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MICROSOFT ENTERPRISE LICENSE AGREEMENT

Place of Performance

Location: ROUND ROCK, WILLIAMSON County, TEXAS, 78664

State: Texas Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $30.0 million to DELL FEDERAL SYSTEMS L.P for work described as: MICROSOFT ENTERPRISE LICENSE AGREEMENT Key points: 1. Software licensing represents a significant and recurring cost for federal agencies. 2. The use of enterprise license agreements (ELAs) can offer cost savings through bulk purchasing. 3. Competition dynamics for large software contracts can influence pricing and vendor selection. 4. Performance metrics and contract duration are key indicators of value realization. 5. This contract falls within the 'Software Publishers' industry, a critical sector for government IT. 6. The firm-fixed-price structure aims to provide cost certainty for the agency.

Value Assessment

Rating: good

The contract value of approximately $30 million over one year for a Microsoft Enterprise License Agreement (ELA) appears reasonable given the scale of government IT needs. Benchmarking against similar large-scale software procurements for federal agencies suggests that ELAs, when negotiated effectively, can provide substantial discounts compared to individual software purchases. The firm-fixed-price nature of the contract further aids in budget predictability. However, a detailed analysis of the specific software modules and user counts included would be necessary for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of a single awardee, Dell Federal Systems L.P., suggests they offered the most advantageous proposal based on the evaluation criteria. The level of competition for such a significant software license agreement is crucial for ensuring fair market pricing and encouraging vendors to offer competitive terms.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices and ensuring the government receives the best possible value for its investment in essential software.

Public Impact

Federal employees within the Centers for Disease Control and Prevention (CDC) will benefit from access to Microsoft software. The contract ensures the continued availability of critical software for agency operations. The geographic impact is primarily within Texas, where the contractor is based, but the software use is agency-wide. This contract supports the IT workforce by providing necessary tools for productivity and data management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with large enterprise software agreements.
Ensuring all licensed software is actively used to maximize value.
Monitoring for scope creep or unneeded software additions over the contract term.

Positive Signals

Awarded under full and open competition, suggesting competitive pricing.
Firm-fixed-price contract provides budget certainty.
Use of an ELA can lead to cost efficiencies for standardized software.

Sector Analysis

This contract falls within the Information Technology sector, specifically software licensing and publishers. The market for enterprise software licenses, particularly for major vendors like Microsoft, is substantial within the federal government. Agencies rely heavily on these licenses for a wide range of operational functions. Comparable spending benchmarks for federal IT software procurements often run into the tens or hundreds of millions of dollars annually, making this a significant, though not exceptionally large, award in the context of overall federal IT spending.

Small Business Impact

The contract was awarded to Dell Federal Systems L.P. and does not indicate any specific small business set-aside provisions. While the prime contractor is a large business, there may be opportunities for small businesses to participate as subcontractors, depending on Dell's subcontracting plan. The absence of a direct small business set-aside means the primary focus was on overall best value through open competition.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officers and program managers within the Centers for Disease Control and Prevention (CDC). The firm-fixed-price nature of the award simplifies some aspects of financial oversight. Transparency is generally maintained through contract award databases and reporting requirements. The Inspector General's office for the Department of Health and Human Services would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Microsoft Enterprise Agreements
Federal Software Licensing
IT Modernization Contracts
Department of Health and Human Services IT Spending
Centers for Disease Control and Prevention Procurement

Risk Flags

Potential for vendor lock-in
Risk of underutilization of licensed software
Complexity of software license management
Need for ongoing cost-benefit analysis of ELA value

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $30.0 million to DELL FEDERAL SYSTEMS L.P. MICROSOFT ENTERPRISE LICENSE AGREEMENT

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 Health and Human Services (Centers for Disease Control and Prevention).

What is the total obligated amount?

The obligated amount is $30.0 million.

What is the period of performance?

Start: 2025-04-01. End: 2026-03-31.

What is the track record of Dell Federal Systems L.P. in fulfilling large federal software licensing contracts?

Dell Federal Systems L.P. has a significant track record of delivering IT solutions and services to the federal government, including extensive experience with software licensing agreements. They are a major reseller and integrator for various software vendors, including Microsoft. Their past performance on similar large-scale contracts, particularly those involving enterprise license agreements for major software suites, would be a key factor in their selection for this HHS award. Agencies often rely on established vendors like Dell for their ability to manage complex licensing terms, provide technical support, and ensure timely delivery of software and associated services. Reviewing past contract performance data, including any reported issues or successes, provides insight into their reliability and capability in managing such procurements.

How does the $30 million value compare to previous Microsoft ELA awards by HHS or similar agencies?

The $30 million value for this one-year Microsoft ELA awarded to HHS (CDC) is substantial and aligns with the typical scale of enterprise software agreements for large federal agencies. To benchmark effectively, one would compare this figure against previous ELAs awarded by HHS or other agencies of similar size and IT complexity, such as the Department of Defense or the General Services Administration. For instance, if HHS previously awarded a similar ELA for $25 million, this new award might suggest an increase in scope, user base, or software costs, or potentially a more favorable pricing structure. Conversely, if previous awards were significantly higher, this could indicate successful negotiation or a shift in licensing strategy. Without specific historical data for HHS or comparable agencies, it's difficult to definitively state if $30 million represents an increase or decrease in value, but it is within the expected range for comprehensive software licensing.

What are the primary risks associated with this type of enterprise software license agreement?

Several risks are associated with enterprise software license agreements (ELAs). A primary concern is vendor lock-in, where the agency becomes heavily reliant on a single vendor's ecosystem, making future transitions to alternative solutions costly and complex. Another risk is underutilization of licensed software; agencies may pay for more licenses or features than are actually used, leading to wasted expenditure. Scope creep is also a concern, where the scope of the ELA might expand over time to include additional software or services not initially planned, potentially increasing costs beyond the initial budget. Furthermore, changes in technology or business needs could render the licensed software obsolete or less relevant before the contract term ends. Finally, ensuring compliance with complex licensing terms and conditions is crucial to avoid potential penalties or audits.

How does the firm-fixed-price contract type mitigate financial risks for the government?

The firm-fixed-price (FFP) contract type is designed to provide the highest degree of cost certainty for the government. Under an FFP agreement, the contractor assumes all the risk of cost overruns. This means that the price paid by the government remains constant regardless of the contractor's actual costs incurred in performing the work. For an ELA, this translates to a predictable expenditure for the software licenses over the contract period. This structure is particularly beneficial for IT procurements where the scope of work, such as the number of licenses and software versions, is well-defined. It protects the agency from unexpected price increases and simplifies budget planning and management, as the total cost is known upfront.

What is the typical duration and value range for federal Microsoft ELA contracts?

Federal Microsoft ELA contracts typically range in duration from one to five years, with multi-year agreements often offering better volume discounts. The value can vary dramatically based on the size of the agency, the number of users, and the specific software products included. For large agencies like HHS, annual spending on Microsoft ELAs can easily reach tens of millions of dollars, as seen in this $30 million award for a single year. Smaller agencies or specific divisions might have contracts in the low millions. Contracts for the entire federal government or very large departments could potentially exceed hundreds of millions annually. The $30 million figure for a one-year term is substantial and indicative of a significant deployment of Microsoft software across a large segment of the agency.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: IT AND TELECOM - SECURITY AND COMPLIANCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: -00001108

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, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $1,291,947,891

Exercised Options: $1,288,950,332

Current Obligation: $29,975,589

Actual Outlays: $29,975,589

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47QTCA22A0004

IDV Type: BPA

Timeline