HHS awards $51.2M for SNOW software licenses, highlighting potential for significant long-term IT investment

Contract Overview

Contract Amount: $51,205,011 ($51.2M)

Contractor: Carahsoft Technology Corp

Awarding Agency: Department of Health and Human Services

Start Date: 2020-08-01

End Date: 2025-07-31

Contract Duration: 1,825 days

Daily Burn Rate: $28.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SNOW ENTERPRISE LICENSE AGREEMENT

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $51.2 million to CARAHSOFT TECHNOLOGY CORP for work described as: SNOW ENTERPRISE LICENSE AGREEMENT Key points: 1. The contract value suggests a substantial commitment to enterprise software solutions. 2. Competition dynamics for this type of software can influence pricing and innovation. 3. Long-term contract duration may indicate a need for ongoing support and upgrades. 4. The specific software category (Software Publishers) is critical for understanding its utility. 5. Performance context will be key to assessing the value derived from these licenses.

Value Assessment

Rating: fair

Benchmarking the value of enterprise software licenses is complex and depends heavily on usage, features, and negotiated terms. Without specific details on the number of users or modules licensed, a direct comparison to similar contracts is difficult. However, the $51.2 million over five years suggests a significant investment, implying a need for robust functionality and widespread deployment within CMS. The firm-fixed-price nature provides cost certainty but requires careful initial scope definition to avoid overpayment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This level of competition is generally favorable for price discovery and can lead to more competitive pricing for the government. The number of bidders is not specified, but the process suggests a deliberate effort to secure the best value through a broad solicitation.

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

Public Impact

Beneficiaries include CMS staff who will utilize the SNOW software for various operational needs. Services delivered include access to and support for enterprise software licenses. Geographic impact is likely nationwide, supporting CMS operations across its various locations. Workforce implications involve the training and utilization of CMS IT personnel to manage and leverage the software.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the software becomes deeply integrated into CMS workflows.
Risk of underutilization if the software's capabilities are not fully leveraged by end-users.
Dependency on the vendor for critical updates and security patches.
Challenges in migrating to alternative solutions in the future due to integration complexities.

Positive Signals

Access to potentially advanced software capabilities that can improve operational efficiency.
A stable, long-term licensing agreement provides predictability for IT budgeting.
The firm-fixed-price contract offers cost certainty over the contract period.
Full and open competition suggests a potentially competitive price was secured.

Sector Analysis

The Software Publishers industry is a significant segment of the technology sector, encompassing companies that develop and distribute software. This contract falls within the enterprise software sub-sector, which is characterized by high-value, complex solutions designed for large organizations. Spending in this area is driven by the need for digital transformation, data management, and operational efficiency. Comparable spending benchmarks would involve looking at other large federal IT procurements for similar enterprise software suites.

Small Business Impact

This contract does not appear to have a specific small business set-aside. However, the prime contractor, Carahsoft Technology Corp, is known for its role in facilitating government IT procurement, often working with a network of small business resellers and partners. It is possible that subcontracting opportunities may exist, but the primary award is not directly targeted at small businesses.

Oversight & Accountability

Oversight for this contract would primarily fall under the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. Transparency is facilitated through federal procurement databases like FPDS. Accountability measures are inherent in the firm-fixed-price contract terms, requiring delivery of specified software licenses. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

General Services Administration (GSA) Schedule Contracts
Enterprise Resource Planning (ERP) Systems
Software Licensing Agreements
IT Modernization Initiatives

Risk Flags

Long contract duration may increase risk of technology obsolescence.
Lack of specific performance metrics makes value assessment difficult.
Potential for vendor lock-in with enterprise software solutions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $51.2 million to CARAHSOFT TECHNOLOGY CORP. SNOW ENTERPRISE LICENSE AGREEMENT

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 Medicare and Medicaid Services).

What is the total obligated amount?

The obligated amount is $51.2 million.

What is the period of performance?

Start: 2020-08-01. End: 2025-07-31.

What specific SNOW software modules or features are included in this $51.2 million contract?

The provided data does not specify the exact SNOW software modules or features covered by this $51.2 million contract. SNOW Software typically offers solutions for Software Asset Management (SAM), IT Asset Management (ITM), and cloud cost management. Understanding the specific modules procured by CMS is crucial for assessing the contract's value and ensuring it aligns with the agency's needs. Without this detail, it's difficult to benchmark against other similar procurements or evaluate the potential return on investment. Further inquiry into the Statement of Work (SOW) or contract line item numbers (CLINs) would be necessary to ascertain the precise scope of software capabilities being licensed.

How does the per-user cost of this SNOW enterprise license compare to industry benchmarks for similar government contracts?

Determining the per-user cost requires knowing the number of users licensed under this $51.2 million contract, which is not provided in the data. SNOW Software's pricing models can vary significantly based on the modules licensed, the number of users or assets managed, and the contract duration. For government contracts, pricing is often influenced by GSA Schedule agreements or other competitively negotiated rates. If this contract is a delivery order against a larger IDIQ or schedule, its per-unit cost should be benchmarked against other similar delivery orders or the parent contract's ceiling price. Without the user count, a direct per-user comparison to industry benchmarks or other federal contracts is not feasible, making a precise value-for-money assessment challenging.

What is the track record of Carahsoft Technology Corp in delivering SNOW software licenses to federal agencies?

Carahsoft Technology Corp is a major reseller of IT solutions to the U.S. government and frequently partners with software vendors like SNOW. Their business model involves leveraging government-wide acquisition contracts (GWACs) and GSA Schedules to provide software and hardware to federal agencies. While Carahsoft itself is not the software developer, its role as a prime contractor indicates a capability in managing the procurement and delivery process. Their extensive experience in the federal IT market suggests a high likelihood of successful delivery, provided the underlying SNOW software meets CMS's requirements and the support from SNOW Software is adequate. Their track record is generally strong in facilitating these types of transactions.

What are the key performance indicators (KPIs) used to measure the success of this SNOW software implementation at CMS?

The provided data does not specify the Key Performance Indicators (KPIs) for this SNOW enterprise license agreement. Typically, for software like SNOW, which often focuses on Software Asset Management (SAM) and IT Asset Management (ITAM), KPIs might include metrics related to software license compliance, reduction in software spend through optimization, improved asset inventory accuracy, faster audit response times, and enhanced security posture by identifying unauthorized software. The success of the implementation would be evaluated against the specific objectives outlined in the contract's Statement of Work (SOW) and any associated performance work statements (PWS). Without access to these documents, the specific KPIs remain unknown.

How does the total contract value of $51.2 million compare to historical federal spending on SNOW software or similar IT asset management solutions?

The total contract value of $51.2 million over five years (approximately $10.24 million annually) represents a significant investment in enterprise software. To compare this to historical spending, one would need to analyze federal procurement data (e.g., FPDS) for contracts awarded to SNOW Software or its competitors (e.g., Flexera, ServiceNow for ITAM modules) over similar periods. This contract appears to be a substantial award, potentially indicating a growing reliance on or expansion of SNOW's capabilities within CMS. Without a broader dataset of comparable contracts, it's difficult to definitively state if this is high or low relative to the entire federal market, but it suggests a major deployment.

What are the potential risks associated with a five-year firm-fixed-price contract for enterprise software licenses?

A five-year firm-fixed-price contract for enterprise software licenses carries several potential risks. Firstly, the fixed price may not account for unforeseen changes in technology or agency needs, potentially leading to the government paying for unused features or requiring costly modifications. Secondly, if the vendor's costs increase significantly during the contract period, they might be incentivized to reduce service quality or support levels to maintain profitability, although the fixed price offers cost certainty to the buyer. Thirdly, there's a risk of vendor lock-in, where the deep integration of the software over five years makes switching to a competitor prohibitively expensive or complex. Finally, if the initial requirements gathering was flawed, CMS might be locked into a solution that doesn't fully meet its evolving needs for the entire duration.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

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: $52,279,426

Exercised Options: $51,205,011

Current Obligation: $51,205,011

Actual Outlays: $35,646,145

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F0119Y

IDV Type: FSS

Timeline