HHS Spends $33.1M on Microsoft Software via GSA Contract, Raising Value Concerns
Contract Overview
Contract Amount: $33,140,427 ($33.1M)
Contractor: Dell Marketing L.P.
Awarding Agency: Department of Health and Human Services
Start Date: 2021-02-18
End Date: 2022-05-31
Contract Duration: 467 days
Daily Burn Rate: $71.0K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: GSA CONTRACT#: GS-35F-059DA MICROSOFT ENTERPRISE AGREEMENT - 2021 SOFTWARE SOFTWARE TRUE UP COMMERCIAL OFF-THE-SHELF (COTS) IT COMMODITIES
Place of Performance
Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20852
State: Maryland Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $33.1 million to DELL MARKETING L.P. for work described as: GSA CONTRACT#: GS-35F-059DA MICROSOFT ENTERPRISE AGREEMENT - 2021 SOFTWARE SOFTWARE TRUE UP COMMERCIAL OFF-THE-SHELF (COTS) IT COMMODITIES Key points: 1. Significant spending on COTS IT commodities highlights reliance on major vendors. 2. Limited visibility into per-unit cost benchmarks makes value assessment challenging. 3. Potential for overspending exists without granular cost data and competitive benchmarking. 4. The IT sector's rapid evolution necessitates continuous software license management.
Value Assessment
Rating: questionable
The $33.1M spent on Microsoft software is substantial. Without detailed breakdowns of licenses and per-unit costs, it's difficult to assess if this represents a fair market price compared to similar enterprise agreements or direct purchases.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
While awarded under full and open competition, the specific nature of enterprise software agreements can limit true price discovery. The government may not always achieve the best possible pricing without aggressive negotiation or alternative sourcing.
Taxpayer Impact: Taxpayer funds are utilized for this significant software expenditure. Ensuring cost-effectiveness and value for money is crucial to responsible fiscal management.
Public Impact
Federal agencies rely heavily on large software vendors, impacting budget allocation. The 'true up' model suggests potential for unplanned or escalating costs. Lack of transparency in software licensing can obscure true costs to taxpayers. Cybersecurity risks are inherent with widespread use of COTS software.
Waste & Efficiency Indicators
Waste Risk Score: 70 / 10
Warning Flags
- Lack of granular cost data
- Potential for vendor lock-in
- Limited insight into actual usage vs. licenses purchased
Positive Signals
- Utilizes GSA contract for procurement efficiency
- Awarded under full and open competition
Sector Analysis
The IT sector, particularly software procurement, is characterized by rapid technological change and complex licensing models. Benchmarks for enterprise software agreements vary widely based on negotiation, volume, and specific product suites.
Small Business Impact
This contract does not appear to directly benefit small businesses, as it involves a large enterprise agreement with a major vendor. Opportunities for small businesses may lie in providing complementary services or competing for smaller, specialized IT needs.
Oversight & Accountability
Oversight is primarily managed through the GSA contract vehicle and the agency's internal procurement processes. Enhanced oversight could involve regular audits of software usage and cost-effectiveness analyses.
Related Government Programs
- Software Publishers
- Department of Health and Human Services Contracting
- National Institutes of Health Programs
Risk Flags
- Lack of detailed cost breakdown
- Potential for overspending due to 'true up' model
- Limited transparency in software licensing
- Difficulty in benchmarking against market rates
- Risk of vendor lock-in
Tags
software-publishers, department-of-health-and-human-services, md, bpa-call, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $33.1 million to DELL MARKETING L.P.. GSA CONTRACT#: GS-35F-059DA MICROSOFT ENTERPRISE AGREEMENT - 2021 SOFTWARE SOFTWARE TRUE UP COMMERCIAL OFF-THE-SHELF (COTS) IT COMMODITIES
Who is the contractor on this award?
The obligated recipient is DELL MARKETING L.P..
Which agency awarded this contract?
Awarding agency: Department of Health and Human Services (National Institutes of Health).
What is the total obligated amount?
The obligated amount is $33.1 million.
What is the period of performance?
Start: 2021-02-18. End: 2022-05-31.
What is the breakdown of software licenses and per-unit costs within this $33.1M agreement?
The provided data lacks a granular breakdown of specific Microsoft software licenses and their associated per-unit costs. This information is critical for a thorough value assessment, as enterprise agreements often bundle various products and services, making it difficult to ascertain the true cost of individual components and compare them against market rates or alternative solutions.
How does the 'true up' mechanism impact the predictability and control of federal software spending?
The 'true up' mechanism allows agencies to add licenses during the contract period, often based on increased usage. While providing flexibility, it can lead to unpredictable spending increases and potentially higher costs if not carefully managed and monitored. Without strict controls, agencies might over-license or pay for unused software, impacting overall budget efficiency.
What steps are being taken to ensure this Microsoft Enterprise Agreement provides long-term value and avoids vendor lock-in?
Ensuring long-term value and avoiding vendor lock-in requires proactive strategies such as regular reviews of software utilization, exploring alternative software solutions during renewal periods, and negotiating favorable terms that allow for flexibility. Agencies should also leverage GSA resources and industry best practices for software asset management to maximize cost-effectiveness and minimize reliance on a single vendor.
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
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Dell Technologies Inc.
Address: ONE DELL WAY, ROUND ROCK, TX, 78682
Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $33,140,427
Exercised Options: $33,140,427
Current Obligation: $33,140,427
Actual Outlays: $4,702,215
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Parent Contract
Parent Award PIID: 75N98019A00012
IDV Type: BPA
Timeline
Start Date: 2021-02-18
Current End Date: 2022-05-31
Potential End Date: 2022-09-23 00:00:00
Last Modified: 2024-09-11
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