HHS Spends $20.9M on OKTA Licenses via Carahsoft, Ending March 2027

Contract Overview

Contract Amount: $20,902,892 ($20.9M)

Contractor: Carahsoft Technology Corp

Awarding Agency: Department of Health and Human Services

Start Date: 2023-03-07

End Date: 2027-03-07

Contract Duration: 1,461 days

Daily Burn Rate: $14.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: OKTA LICENSE SUBSCRIPTIONS

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $20.9 million to CARAHSOFT TECHNOLOGY CORP for work described as: OKTA LICENSE SUBSCRIPTIONS Key points: 1. Significant expenditure on software licenses highlights reliance on identity management solutions. 2. Carahsoft Technology Corp. is the sole awardee, raising questions about competition. 3. The contract spans over four years, indicating a long-term need for OKTA services. 4. Potential for cost savings exists if alternative solutions or bulk discounts were explored.

Value Assessment

Rating: fair

The $20.9M contract for OKTA licenses appears to be at a fair price given the duration and the nature of enterprise software subscriptions. However, without specific per-unit data or comparison to other government agencies' pricing for similar OKTA tiers, a definitive assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition. However, the specific awardee is Carahsoft Technology Corp., which often acts as a reseller. The actual impact on price discovery depends on whether Carahsoft secured competitive pricing from OKTA or if the government could have negotiated directly.

Taxpayer Impact: Taxpayers are funding essential software licenses for a critical government function. The effectiveness of the competition method in securing the best possible price will determine the overall taxpayer impact.

Public Impact

Ensures continued access to identity and access management services for CMS. Supports federal cybersecurity initiatives by maintaining secure user authentication. Potential for vendor lock-in with a single software provider. Impacts budget allocation for IT infrastructure within CMS.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited visibility into the true competitive pricing secured by Carahsoft.
Long-term commitment may prevent adoption of potentially more cost-effective future solutions.
Reliance on a single vendor for critical identity management.

Positive Signals

Secures necessary software for operational continuity.
Awarded under full and open competition, theoretically allowing for best pricing.
Long-term contract provides budget predictability.

Sector Analysis

This contract falls within the Software Publishers sector, specifically for identity and access management solutions. Government spending on software licenses, particularly for cybersecurity and cloud-based services, has been steadily increasing. Benchmarks for similar enterprise software subscriptions vary widely based on features and user volume.

Small Business Impact

While the contract was awarded under full and open competition, Carahsoft Technology Corp. is a large reseller. Analysis is needed to determine if small businesses were involved in the supply chain or if opportunities were missed to engage smaller software providers directly.

Oversight & Accountability

The contract was awarded via a delivery order under a larger contract vehicle. Oversight should focus on ensuring the pricing within this order is competitive and that the services delivered meet the needs of CMS without overspending.

Related Government Programs

Software Publishers
Department of Health and Human Services Contracting
Centers for Medicare and Medicaid Services Programs

Risk Flags

Potential for inflated pricing due to reseller involvement.
Long-term commitment may limit future flexibility.
Lack of transparency on specific per-unit costs.
Reliance on a single software vendor for critical functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $20.9 million to CARAHSOFT TECHNOLOGY CORP. OKTA LICENSE SUBSCRIPTIONS

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 $20.9 million.

What is the period of performance?

Start: 2023-03-07. End: 2027-03-07.

What was the specific pricing structure and justification provided by Carahsoft to ensure the $20.9M represents a competitive value for OKTA licenses over four years?

The justification for the $20.9M price would typically involve a breakdown of per-user costs, license tiers, and any included support or maintenance. Agencies often rely on pre-negotiated contract vehicles or GSA schedules. A thorough review would compare these unit costs against market rates and other government contracts for similar OKTA deployments to confirm value.

Given Carahsoft's role as a reseller, what mechanisms were in place during the full and open competition to ensure genuine price discovery and prevent inflated costs passed down from the software manu

During full and open competition, the agency should have required detailed pricing proposals from Carahsoft, including justification for their markup. This might involve comparing quotes from multiple resellers or verifying that Carahsoft secured favorable terms from OKTA. The agency's procurement team plays a crucial role in scrutinizing these proposals to ensure taxpayer funds are used efficiently.

How does the long-term commitment to OKTA licenses impact CMS's ability to adapt to future technological advancements or potentially more cost-effective identity management solutions?

A four-year commitment can create vendor lock-in, making it difficult and potentially costly to switch providers even if better or cheaper alternatives emerge. CMS should have assessed the evolving landscape of identity management solutions and considered contract clauses that allow for flexibility or early termination if superior options become available, balancing current needs with future adaptability.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

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

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: $40,322,081

Exercised Options: $20,902,892

Current Obligation: $20,902,892

Actual Outlays: $14,829,325

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 47QSWA18D008F

IDV Type: FSS

Timeline