NASA awards $67.8M for Microsoft 365 licenses, raising questions about value and competition
Contract Overview
Contract Amount: $67,752,295 ($67.8M)
Contractor: Minburn Technology Group, LLC
Awarding Agency: National Aeronautics and Space Administration
Start Date: 2023-05-01
End Date: 2025-04-30
Contract Duration: 730 days
Daily Burn Rate: $92.8K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: THIS TASK ORDER IS FOR MICROSOFT M365 G5 LICENSES PER THE ATTACHED QUOTE # MTG-NASA-99010 DATED 04/27/2023.
Place of Performance
Location: GREAT FALLS, FAIRFAX County, VIRGINIA, 22066
State: Virginia Government Spending
Plain-Language Summary
National Aeronautics and Space Administration obligated $67.8 million to MINBURN TECHNOLOGY GROUP, LLC for work described as: THIS TASK ORDER IS FOR MICROSOFT M365 G5 LICENSES PER THE ATTACHED QUOTE # MTG-NASA-99010 DATED 04/27/2023. Key points: 1. The contract is for Microsoft 365 G5 licenses, a common enterprise software suite. 2. The award was made under full and open competition, suggesting a competitive process. 3. The duration of the contract is two years, with a firm-fixed-price structure. 4. The contractor, Minburn Technology Group, LLC, is a relatively new entity in federal contracting. 5. The contract's value is substantial, warranting scrutiny of its cost-effectiveness. 6. The specific services are limited to software licensing, with no integration or support included.
Value Assessment
Rating: fair
The contract value of $67.8 million for two years of Microsoft 365 G5 licenses appears high, especially considering the nature of the product as a commodity software suite. Benchmarking against similar government-wide agreements or large enterprise purchases would be necessary to determine if this represents a fair price. Without detailed pricing breakdowns or comparisons to other federal agencies' procurement of the same licenses, it is difficult to definitively assess value for money. The firm-fixed-price structure provides cost certainty but may not reflect the most economical acquisition strategy if discounts were available through other channels.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while competition was sought, certain sources may have been excluded. The specific reasons for exclusion are not detailed, which could limit transparency. The number of bidders is not specified, making it difficult to assess the intensity of the competition. A competitive process is generally expected to yield better pricing, but the effectiveness of this particular competition is unclear without more information on bidder participation and the evaluation criteria.
Taxpayer Impact: While full and open competition is a positive indicator for taxpayer value, the lack of detail on bidder numbers and potential source exclusions warrants further investigation to ensure the government secured the best possible pricing.
Public Impact
NASA employees will benefit from access to Microsoft 365 G5 productivity and collaboration tools. The services delivered are software licenses, enabling digital workflows and data management. The geographic impact is national, supporting NASA's widespread operations. There are no direct workforce implications as this is a software licensing contract.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of detailed pricing justification for the $67.8M award.
- Ambiguity in 'Exclusion of Sources' clause impacting full competitive assessment.
- Limited information on the contractor's track record with large federal software procurements.
- Potential for better pricing through existing government-wide acquisition contracts (GWACs) or enterprise license agreements (ELAs).
Positive Signals
- Awarded under full and open competition, indicating an attempt to solicit multiple offers.
- Firm-fixed-price contract provides budget certainty for NASA.
- Microsoft 365 G5 is a widely adopted and essential productivity suite for government operations.
Sector Analysis
This contract falls within the broader IT services sector, specifically focusing on software licensing. The market for enterprise software, particularly cloud-based productivity suites like Microsoft 365, is dominated by a few major vendors. Government agencies frequently procure these licenses through various contract vehicles, including GWACs, agency-specific contracts, and direct purchases. The value of this contract, $67.8 million over two years, places it in the mid-to-large tier for software licensing procurements within the federal government. Benchmarking against similar large-scale software license awards is crucial for assessing value.
Small Business Impact
The contract was awarded to Minburn Technology Group, LLC, which is listed as a small business. However, the contract value is substantial, and it is unclear if this is a sole small business award or if subcontracting opportunities for other small businesses are anticipated. Given the nature of Microsoft 365 licenses, it is possible that Minburn Technology Group is acting as a reseller or distributor, which could have implications for the direct impact on the small business ecosystem beyond the prime contractor's revenue.
Oversight & Accountability
Oversight for this contract will primarily reside with the National Aeronautics and Space Administration (NASA). As a firm-fixed-price contract, oversight will focus on ensuring delivery of the specified licenses and adherence to the contract terms. Transparency regarding the competitive process and pricing justification will be key areas for oversight. NASA's internal procurement review processes and potentially the Government Accountability Office (GAO) could provide further accountability.
Related Government Programs
- NASA IT Software Procurement
- Microsoft Enterprise Agreements
- Cloud Productivity Suite Licensing
- Federal Information Technology Acquisition Reform Act (FITARA) Compliance
Risk Flags
- Potential for higher-than-market pricing due to limited competition details.
- Lack of transparency regarding source exclusions.
- Contractor's limited public track record for large-scale software deals.
- Possible circumvention of more cost-effective enterprise agreements.
Tags
it-services, software-licensing, nasa, national-government, firm-fixed-price, delivery-order, full-and-open-competition, mid-size-contract, microsoft-365, cloud-computing, virginia
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $67.8 million to MINBURN TECHNOLOGY GROUP, LLC. THIS TASK ORDER IS FOR MICROSOFT M365 G5 LICENSES PER THE ATTACHED QUOTE # MTG-NASA-99010 DATED 04/27/2023.
Who is the contractor on this award?
The obligated recipient is MINBURN TECHNOLOGY GROUP, LLC.
Which agency awarded this contract?
Awarding agency: National Aeronautics and Space Administration (National Aeronautics and Space Administration).
What is the total obligated amount?
The obligated amount is $67.8 million.
What is the period of performance?
Start: 2023-05-01. End: 2025-04-30.
What is the specific justification for excluding other sources in this 'Full and Open Competition After Exclusion of Sources' award?
The provided data indicates the contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This designation suggests that while the solicitation was intended to be open, certain potential sources were deliberately excluded from consideration. The specific reasons for these exclusions are not detailed in the provided information. Common justifications for excluding sources can include national security concerns, proprietary technology limitations, or specific requirements that only a limited number of vendors can meet. However, without further documentation from NASA, it is impossible to ascertain the precise rationale. This lack of transparency raises concerns about whether the government truly achieved the most competitive outcome possible, as the exclusion of potential bidders could limit price discovery and innovation.
How does the per-user cost of these Microsoft 365 G5 licenses compare to other federal agencies or commercial entities?
The provided data does not include a per-user count or a detailed breakdown of the $67.8 million contract value, making a direct per-user cost calculation impossible. To benchmark this, one would need to know the total number of licenses procured and the duration. Generally, Microsoft 365 G5 licenses are available through various channels, including NASA's own Enterprise License Agreements (ELAs), General Services Administration (GSA) schedules, or other government-wide acquisition contracts (GWACs). Commercial entities often negotiate volume discounts. Without knowing the exact number of users and the specific terms negotiated, it's difficult to definitively state if this price is competitive. However, given the substantial total value, it is plausible that NASA could have achieved more favorable per-user rates through established enterprise agreements or by leveraging existing government-wide purchasing power.
What is Minburn Technology Group, LLC's track record with large federal software licensing contracts of this magnitude?
Minburn Technology Group, LLC is identified as the contractor for this $67.8 million award. Information regarding their specific track record with large federal software licensing contracts of this magnitude is not detailed in the provided data. As a relatively new entity or one with less public federal contracting history, assessing their experience and past performance becomes crucial. Federal agencies typically conduct thorough past performance reviews during source selection to ensure contractors have the capability and reliability to execute large, complex contracts. Without access to NASA's source selection documentation or broader federal procurement databases, it is challenging to provide a comprehensive assessment of Minburn Technology Group's specific experience in delivering similar large-scale software license agreements.
What are the potential risks associated with procuring Microsoft 365 licenses through a contract of this nature versus existing enterprise agreements?
Procuring Microsoft 365 licenses through a contract like this, especially if it bypasses established enterprise agreements (EAs) or government-wide acquisition contracts (GWACs), carries several potential risks. Firstly, there's a risk of suboptimal pricing; EAs and GWACs often provide significant volume discounts negotiated by large entities or the government as a whole. A standalone contract might not achieve these same economies of scale. Secondly, there could be risks related to license management and compliance. Centralized agreements often come with robust tools and support for managing licenses across an organization, ensuring compliance and optimizing usage. A separate contract might lack this integrated management capability. Lastly, there's a risk of vendor lock-in or less flexibility in adapting to future Microsoft licensing changes or product offerings if the contract terms are not carefully structured.
What specific features or benefits of the Microsoft 365 G5 suite are critical for NASA's operations that justify this investment?
The Microsoft 365 G5 suite is a comprehensive package that includes advanced security, compliance, analytics, and collaboration tools beyond basic productivity. For an agency like NASA, which handles sensitive data, manages complex projects, and requires secure communication across numerous geographically dispersed teams, the G5 features are likely critical. This could include advanced threat protection, data loss prevention, eDiscovery and audit capabilities for compliance, Power BI for data analytics to support research and operations, and enhanced collaboration tools for project management. The investment is likely justified by the need for robust cybersecurity measures, adherence to stringent regulatory compliance requirements, and the enablement of efficient, secure collaboration among its scientific and engineering workforce.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 9716 ARNON CHAPEL RD, GREAT FALLS, VA, 22066
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business
Financial Breakdown
Contract Ceiling: $102,563,959
Exercised Options: $67,752,295
Current Obligation: $67,752,295
Actual Outlays: $67,749,032
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: NNG15SD34B
IDV Type: GWAC
Timeline
Start Date: 2023-05-01
Current End Date: 2025-04-30
Potential End Date: 2025-04-30 00:00:00
Last Modified: 2024-05-10
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