HHS awards $21.5M for Microsoft licenses and maintenance, with Dell Federal as the contractor

Contract Overview

Contract Amount: $21,507,334 ($21.5M)

Contractor: Dell Federal Systems L.P

Awarding Agency: Department of Health and Human Services

Start Date: 2025-05-08

End Date: 2027-04-30

Contract Duration: 722 days

Daily Burn Rate: $29.8K/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: ROCKVILLE, MONTGOMERY County, MARYLAND, 20852

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $21.5 million to DELL FEDERAL SYSTEMS L.P for work described as: MICROSOFT (MS) LICENSES AND MAINTENANCE SUPPORT Key points: 1. Value for money appears fair given the essential nature of the software and support. 2. Competition dynamics indicate a full and open process, which should promote competitive pricing. 3. Risk indicators are low due to the established nature of the software and vendor. 4. Performance context is tied to ongoing operational needs for critical FDA systems. 5. Sector positioning is within the IT services category, supporting government software infrastructure.

Value Assessment

Rating: fair

The contract value of $21.5 million for Microsoft licenses and maintenance over approximately two years is substantial. Benchmarking against similar government-wide agreements for Microsoft products suggests this pricing is within a reasonable range, though specific license types and support levels are critical for precise comparison. The firm-fixed-price structure provides cost certainty for the agency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit offers. The specific number of bidders is not provided, but the open competition suggests a healthy market engagement, which typically leads to better price discovery and potentially more favorable terms for the government compared to sole-source or limited competitions.

Taxpayer Impact: A full and open competition generally benefits taxpayers by ensuring that the government is not overpaying due to a lack of market alternatives. It promotes a level playing field for vendors and encourages competitive pricing.

Public Impact

The Food and Drug Administration (FDA) benefits from this contract by ensuring continued access to essential Microsoft software and maintenance. Services delivered include licensing for operating systems, productivity software, and critical security updates and technical support. The geographic impact is primarily within the FDA's operational centers, likely concentrated in Maryland. Workforce implications involve ensuring FDA employees have the necessary tools to perform their duties effectively.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future renewals if competition is not maintained.
Dependence on a single vendor for critical software licenses can create long-term lock-in.
Ensuring the specific license types and support levels procured are truly necessary and cost-effective.

Positive Signals

Awarded through full and open competition, suggesting competitive pricing was sought.
Firm-fixed-price contract provides budget certainty for the agency.
Supports essential operational functions for a critical government agency (FDA).

Sector Analysis

This contract falls within the broader Information Technology (IT) sector, specifically focusing on software licensing and maintenance. The market for enterprise software licenses, particularly from major vendors like Microsoft, is large and well-established within the federal government. This contract represents a portion of the government's ongoing investment in maintaining its IT infrastructure and ensuring end-user productivity.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). While there is no direct subcontracting information provided, large IT contracts often involve opportunities for small businesses to participate as subcontractors to the prime vendor, Dell Federal Systems L.P. The absence of a small business set-aside means the primary competition was open to all responsible sources, regardless of size.

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 measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified licenses and support. Transparency is facilitated through contract databases like FPDS, where this award is recorded.

Related Government Programs

Microsoft Enterprise Agreements
Software and Information Licensing
IT Infrastructure Support Services
General Purpose Computer Software

Risk Flags

Potential for price escalation in future renewals.
Vendor lock-in risk with proprietary software.
Need for ongoing monitoring of license utilization.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $21.5 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 $21.5 million.

What is the period of performance?

Start: 2025-05-08. End: 2027-04-30.

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

Analyzing historical spending requires access to detailed procurement data over multiple fiscal years. Without specific historical data for this contract vehicle or similar awards at the FDA, it's difficult to establish a precise spending pattern. However, government agencies typically maintain consistent spending on essential software like Microsoft products to ensure operational continuity. Fluctuations might occur based on technology refresh cycles, changes in user base, or the introduction of new software versions. The current award of approximately $21.5 million over two years suggests a significant, ongoing investment in these IT assets.

How does the pricing of this contract compare to other federal agencies procuring similar Microsoft products?

Direct comparison of pricing requires access to detailed pricing schedules for identical Microsoft products and support levels across different federal agencies. Government-wide acquisition contracts (GWACs) and NASA Solutions for Enterprise-Wide Procurement (SEWP) often provide benchmark pricing. Given this was awarded under a Best Practices Agreement (BPA Call) with Dell Federal Systems, it implies that Dell likely leveraged existing contract vehicles or negotiated terms. The firm-fixed-price nature provides cost certainty, but without specific license counts and support tiers, a precise per-unit cost comparison is challenging. However, the full and open competition suggests an effort to achieve market-competitive rates.

What are the specific risks associated with relying on a single vendor for essential software licenses?

The primary risks of relying on a single vendor like Microsoft for essential software licenses include potential vendor lock-in, where switching to alternative solutions becomes prohibitively expensive or complex. There's also a risk of price increases upon contract renewal, as the vendor may have significant leverage. Furthermore, dependence on one vendor can limit flexibility in adopting new technologies or integrating with diverse systems. To mitigate these risks, agencies often employ strategies such as negotiating long-term agreements with favorable terms, conducting regular market research to assess alternatives, and ensuring robust contract management to track license utilization and compliance.

What is the track record of Dell Federal Systems L.P. in delivering IT solutions to the federal government?

Dell Federal Systems L.P. has a long-standing and extensive track record of providing a wide range of IT hardware, software, and services to the U.S. federal government. They are a frequent awardee of large-scale contracts across various agencies, including the Department of Defense, civilian agencies, and intelligence community. Their experience encompasses everything from end-user devices and servers to complex networking solutions and software licensing. Their participation in numerous competitive procurements indicates a demonstrated ability to meet government requirements and pricing expectations. This specific contract for Microsoft licenses builds upon their established role as a key IT vendor within the federal ecosystem.

How does this contract contribute to the FDA's overall mission effectiveness?

This contract is crucial for the FDA's mission effectiveness by ensuring that its workforce has reliable access to the essential software tools needed for daily operations. Microsoft products, including operating systems and productivity suites, are fundamental to data analysis, report generation, regulatory review, communication, and administrative tasks. Continuous access to licensed software and timely maintenance support prevents disruptions, enhances cybersecurity by ensuring systems are up-to-date, and allows FDA personnel to focus on their core responsibilities of protecting public health. Without this foundational IT support, the agency's ability to perform its critical functions would be significantly hampered.

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: $21,507,334

Exercised Options: $21,507,334

Current Obligation: $21,507,334

Actual Outlays: $20,994,515

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 47QTCA22A0004

IDV Type: BPA

Timeline