HHS awards $22.5M for Microsoft licenses and maintenance, with Dell Federal Systems as the contractor

Contract Overview

Contract Amount: $22,498,225 ($22.5M)

Contractor: Dell Federal Systems L.P

Awarding Agency: Department of Health and Human Services

Start Date: 2024-04-30

End Date: 2027-04-30

Contract Duration: 1,095 days

Daily Burn Rate: $20.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MICROSOFT (MS) LICENSES AND MAINTENANCE SUPPORT

Place of Performance

Location: SILVER SPRING, MONTGOMERY County, MARYLAND, 20993

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $22.5 million to DELL FEDERAL SYSTEMS L.P for work described as: MICROSOFT (MS) LICENSES AND MAINTENANCE SUPPORT Key points: 1. Value for money is assessed through benchmarking against similar software license agreements. 2. Competition dynamics indicate a full and open competition, suggesting potential for competitive pricing. 3. Risk indicators are monitored through contract performance and vendor responsiveness. 4. Performance context is tied to the ongoing need for essential Microsoft software and support. 5. Sector positioning places this contract within the broader IT software and services market.

Value Assessment

Rating: good

The contract value of $22.5 million for Microsoft licenses and maintenance appears reasonable given the duration and the essential nature of the software. Benchmarking against similar government-wide agreements for Microsoft products would provide a more precise value-for-money assessment. The firm-fixed-price structure helps control costs, but the total expenditure over nearly three years warrants careful monitoring of usage and renewal terms.

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 specific number of bidders is not provided, but the competitive nature of the award process suggests that the government sought the best value through a transparent procurement. This approach generally leads to more favorable pricing and terms for the government.

Taxpayer Impact: A full and open competition helps ensure that taxpayer dollars are used efficiently by fostering a competitive environment that drives down prices and improves service quality.

Public Impact

The Food and Drug Administration (FDA) benefits from continuous access to critical Microsoft software and support. Essential services include software licenses and maintenance, ensuring operational continuity for agency functions. The geographic impact is primarily within Maryland, where the FDA's operations are centered. Workforce implications involve enabling FDA employees to utilize standard productivity and specialized software.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases upon renewal if market conditions shift.
Dependence on a single vendor's ecosystem for critical software.

Positive Signals

Awarded through full and open competition, suggesting competitive pricing.
Firm-fixed-price contract type provides cost certainty.
Long-term support ensures operational stability for essential software.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on software licensing and maintenance. The market for enterprise software licenses, particularly for major vendors like Microsoft, is substantial and characterized by established players and ongoing support contracts. Government spending on such licenses is a significant portion of overall IT expenditures, driven by the need for standardized productivity tools and specialized applications across agencies.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, the direct impact on small businesses through set-asides is minimal. However, the prime contractor, Dell Federal Systems L.P., may engage small businesses as subcontractors, though this information is not detailed here. The focus appears to be on securing necessary software and support through a competitive process.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the FDA's program officials responsible for IT procurement and management. Accountability is ensured through the firm-fixed-price terms, requiring delivery of specified licenses and support. Transparency is facilitated by the contract award process, which was conducted under full and open competition. The Inspector General's office may review IT spending for efficiency and compliance.

Related Government Programs

General Services Administration (GSA) Schedules
Enterprise Software Agreements
IT Commodity Contracts
Software Licensing and Maintenance

Risk Flags

Potential for vendor lock-in
Future price escalation risk
Dependence on specific software versions

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $22.5 million to DELL FEDERAL SYSTEMS L.P. MICROSOFT (MS) LICENSES AND MAINTENANCE SUPPORT

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 (Food and Drug Administration).

What is the total obligated amount?

The obligated amount is $22.5 million.

What is the period of performance?

Start: 2024-04-30. End: 2027-04-30.

What is the historical spending pattern for Microsoft licenses and support at the FDA?

Analyzing historical spending data for Microsoft licenses and support at the FDA is crucial for understanding trends and identifying potential cost efficiencies. Without specific historical data for this agency, we can infer general patterns. Government agencies often engage in multi-year contracts for software to ensure continuity and leverage volume discounts. Spending typically fluctuates based on agency-wide software refresh cycles, new user onboarding, and the introduction of new software versions or features. A consistent, significant expenditure on Microsoft products is common across federal agencies due to their widespread use for productivity and operational tasks. Benchmarking current spending against previous periods can reveal cost increases or decreases, highlighting the effectiveness of procurement strategies and negotiation.

How does the per-unit cost of these Microsoft licenses compare to other federal agencies or the commercial market?

A direct comparison of per-unit costs for these Microsoft licenses against other federal agencies or the commercial market is challenging without specific details on the exact licenses (e.g., Office 365 E3 vs. E5, Windows Server versions) and user counts. However, government agencies often benefit from negotiated enterprise agreements through entities like the General Services Administration (GSA), which can secure lower prices than individual commercial purchases. Dell Federal Systems, as the contractor, likely leveraged existing government-wide purchasing vehicles or negotiated competitive pricing. If this contract was indeed competed fully and openly, the pricing should be competitive within the federal landscape. A detailed analysis would require comparing the specific license types, quantities, and support levels against publicly available GSA schedules or commercial price lists, adjusting for any volume discounts or specific contract terms.

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

Key Performance Indicators (KPIs) for a contract involving Microsoft licenses and maintenance support typically focus on ensuring uninterrupted access to software and reliable technical assistance. Essential KPIs would include software availability and uptime, ensuring that the licensed products are accessible to end-users as needed. Response times and resolution rates for technical support requests are critical for maintaining user productivity. Contract compliance, ensuring that the delivered licenses and support align with the contract specifications, is also paramount. Furthermore, metrics related to user satisfaction surveys can provide qualitative feedback on the effectiveness of the support and the usability of the software. Adherence to delivery schedules for any new licenses or updates would also be tracked.

What is the track record of Dell Federal Systems L.P. in delivering similar IT support and software contracts to the government?

Dell Federal Systems L.P. has a significant track record of delivering a wide range of IT hardware, software, and support services to the U.S. federal government. As a major IT solutions provider, they are experienced in managing large-scale contracts, including software licensing and maintenance agreements. Their past performance often includes supporting various agencies with their IT infrastructure needs, demonstrating capability in procurement, deployment, and ongoing support. Government contract databases and past performance reviews would provide specific details on their success rates, any challenges encountered, and client satisfaction levels for similar contracts. Generally, established vendors like Dell Federal Systems are expected to meet stringent government requirements for reliability, security, and service delivery.

Are there any potential risks associated with vendor lock-in or future price escalations with this contract?

Vendor lock-in is a potential risk with any software licensing agreement, particularly with major vendors like Microsoft, whose ecosystem is deeply integrated into many organizations' workflows. This contract, covering licenses and maintenance, inherently creates a degree of dependence. Future price escalations are also a concern, as software vendors periodically adjust their pricing. While the current contract is firm-fixed-price, renewal terms could be subject to market rate adjustments. To mitigate these risks, the FDA should actively monitor usage, explore alternative solutions periodically, and leverage any negotiation leverage gained through competitive re-procurement processes. Understanding the contract's renewal clauses and any price protection provisions is crucial.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

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: $22,498,225

Exercised Options: $22,498,225

Current Obligation: $22,498,225

Actual Outlays: $22,498,225

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 47QTCA22A0004

IDV Type: BPA

Timeline