DOE awards $70.5M for Splunk licensing, with 7 bidders in a full and open competition
Contract Overview
Contract Amount: $70,473,875 ($70.5M)
Contractor: Carahsoft Technology Corp
Awarding Agency: Department of Energy
Start Date: 2022-10-01
End Date: 2025-09-30
Contract Duration: 1,095 days
Daily Burn Rate: $64.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 7
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: SPLUNK LICENSING
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20585
Plain-Language Summary
Department of Energy obligated $70.5 million to CARAHSOFT TECHNOLOGY CORP for work described as: SPLUNK LICENSING Key points: 1. The contract's value appears reasonable given the duration and the nature of software licensing. 2. Full and open competition suggests a healthy market for Splunk solutions. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. Performance is tied to delivery orders, allowing for phased implementation and oversight. 5. This contract supports IT infrastructure and data management within the Department of Energy. 6. The duration of the contract (3 years) aligns with typical software renewal cycles.
Value Assessment
Rating: good
The total award of $70.5 million over three years for Splunk licensing suggests a significant investment in data analytics capabilities. While a direct per-year comparison is difficult without knowing the exact usage, the price appears to be within a reasonable range for enterprise-level software licensing, especially considering the potential breadth of its application across the Department of Energy. Benchmarking against similar large-scale government software procurements would provide further context, but the fixed-price nature offers cost certainty.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, with seven bidders vying for the opportunity. This indicates a robust competitive landscape for Splunk software and related services within the federal market. The presence of multiple bidders generally fosters better price discovery and encourages vendors to offer competitive terms and pricing to secure the award.
Taxpayer Impact: A competitive process like this is beneficial for taxpayers as it helps ensure the government is not overpaying for essential software and services, driving down costs through market forces.
Public Impact
The Department of Energy benefits from enhanced data management and security capabilities. This contract enables the agency to leverage Splunk for operational insights and decision-making. The services delivered support the agency's mission-critical IT infrastructure. The primary geographic impact is within the District of Columbia, where the agency is headquartered, but usage may extend to other DOE facilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in if not managed carefully.
- Reliance on a single software vendor for critical data infrastructure.
- Ensuring adequate technical expertise within the agency to manage and utilize the software effectively.
Positive Signals
- The use of a widely adopted platform like Splunk suggests a degree of standardization and available talent.
- The fixed-price contract provides budget predictability.
- The competitive award process indicates a fair market price was likely achieved.
Sector Analysis
The market for Security Information and Event Management (SIEM) and data analytics software is substantial within the federal government. Splunk is a leading player in this space, competing with other major technology providers. Government spending on such platforms is driven by increasing cybersecurity threats, the need for operational efficiency, and the growing volume of data generated by federal agencies. This contract fits within the broader IT services and software procurement category, which represents a significant portion of federal IT budgets.
Small Business Impact
There is no indication that this contract included a small business set-aside. Given the nature of enterprise software licensing and the likely scale of the requirement, it is probable that the primary awardee is a large business. However, the prime contractor, Carahsoft Technology Corp., is known for its extensive reseller agreements, which often include opportunities for small businesses to participate as subcontractors or through specialized government purchasing vehicles. Further analysis would be needed to determine the extent of small business subcontracting.
Oversight & Accountability
The contract is a delivery order under a larger contract vehicle, implying that oversight is managed through the terms of that base contract. The fixed-price nature of the award provides a degree of financial oversight by capping costs. Performance monitoring would likely occur through the delivery order process, with the Department of Energy's contracting officers responsible for ensuring compliance with terms and conditions. Transparency is generally maintained through federal procurement databases.
Related Government Programs
- Splunk Enterprise Security
- Federal Civilian IT Modernization
- Cybersecurity Software Procurement
- Data Analytics Platforms
- Department of Energy IT Infrastructure
Risk Flags
- Potential for vendor lock-in
- Reliance on a single software provider
- Need for specialized technical expertise
Tags
it-services, software-licensing, splunk, department-of-energy, full-and-open-competition, firm-fixed-price, delivery-order, data-analytics, cybersecurity, district-of-columbia, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $70.5 million to CARAHSOFT TECHNOLOGY CORP. SPLUNK LICENSING
Who is the contractor on this award?
The obligated recipient is CARAHSOFT TECHNOLOGY CORP.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $70.5 million.
What is the period of performance?
Start: 2022-10-01. End: 2025-09-30.
What is the historical spending trend for Splunk licensing within the Department of Energy?
Analyzing historical spending on Splunk licensing within the Department of Energy (DOE) is crucial for understanding the trajectory of this investment. While this specific award totals $70.5 million over three years, it's important to examine prior contracts for Splunk products and services. A review of federal procurement data would reveal if this represents an increase, decrease, or stable level of spending compared to previous periods. Understanding these trends can highlight shifts in the DOE's reliance on Splunk, potential cost escalations, or the success of competitive bidding in managing expenditures over time. Without access to the full historical data, it's difficult to provide precise figures, but such an analysis would contextualize the current award within the agency's broader IT budget and data management strategy.
How does the per-unit cost or total value of this Splunk contract compare to similar government-wide agreements?
Comparing the value of this $70.5 million Splunk licensing contract to similar government-wide agreements is essential for assessing value for money. The General Services Administration (GSA) and other agencies often establish Enterprise License Agreements (ELAs) or Multiple Award Schedules (MAS) for widely used software like Splunk. These vehicles typically offer pre-negotiated pricing, often with volume discounts. If this contract was awarded through such a vehicle, it likely benefits from established benchmarks. However, if it's a standalone award, a comparison against GSA Schedule pricing or other agency ELAs would reveal if the Department of Energy secured competitive rates. Factors like the specific modules licensed, user counts, and support levels significantly influence pricing, making direct comparisons complex but necessary for a thorough value assessment.
What are the key performance indicators (KPIs) used to measure the success of this Splunk implementation?
The success of this $70.5 million Splunk licensing contract hinges on clearly defined Key Performance Indicators (KPIs) that align with the Department of Energy's objectives. While the provided data doesn't specify these KPIs, typical metrics for such a deployment often include system uptime and availability, data ingestion rates and latency, query performance, the number of security incidents detected and resolved, and user adoption rates. Furthermore, KPIs related to cost-efficiency, such as the cost per terabyte processed or the return on investment (ROI) in terms of risk reduction or operational efficiency gains, are also critical. The effectiveness of the contract's oversight would be partly measured by how rigorously these KPIs are tracked and reported against, ensuring the agency realizes the intended benefits from its investment in Splunk.
What is the track record of Carahsoft Technology Corp. in delivering similar large-scale software contracts to federal agencies?
Carahsoft Technology Corp. has a well-established track record as a leading government IT solutions provider and reseller, frequently handling large-scale software contracts across numerous federal agencies. They specialize in navigating complex procurement processes and partnering with software manufacturers to offer solutions through various contract vehicles, including GSA Schedules. Their extensive portfolio often includes cybersecurity, cloud computing, data analytics, and infrastructure software. Agencies frequently rely on Carahsoft for access to leading technology solutions, leveraging their expertise in contract management and vendor relations. The successful award of this $70.5 million Splunk contract by the Department of Energy is consistent with Carahsoft's demonstrated capability in managing significant software procurements and delivering value to the federal government.
What are the potential risks associated with relying on a single vendor for critical data analytics and security monitoring?
Relying on a single vendor like Splunk for critical data analytics and security monitoring, as indicated by this $70.5 million contract, presents several potential risks. Vendor lock-in is a primary concern, making it difficult and costly to switch to alternative solutions in the future due to proprietary data formats, specialized configurations, and unique skill sets required. This dependence can also limit negotiation leverage during future contract renewals, potentially leading to price increases. Furthermore, the vendor's financial stability, strategic direction, or product roadmap changes could impact the government's long-term access to necessary features or support. Security vulnerabilities discovered within the vendor's platform could have widespread implications across the agency, and the pace of innovation might lag behind emerging technologies if the vendor does not keep pace with market demands.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services
Product/Service Code: IT AND TELECOM - NETWORK
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 7
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: $70,473,875
Exercised Options: $70,473,875
Current Obligation: $70,473,875
Actual Outlays: $70,473,875
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: NNG15SC27B
IDV Type: GWAC
Timeline
Start Date: 2022-10-01
Current End Date: 2025-09-30
Potential End Date: 2025-09-30 00:00:00
Last Modified: 2025-06-12
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