Agriculture's $24.4M Microsoft Enterprise Agreement option year 3 shows consistent spending on software and IT services

Contract Overview

Contract Amount: $24,435,204 ($24.4M)

Contractor: Dell Marketing L.P.

Awarding Agency: Department of Agriculture

Start Date: 2015-07-01

End Date: 2018-06-30

Contract Duration: 1,095 days

Daily Burn Rate: $22.3K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: GSD FY15 MICROSOFT ENTERPRISE AGREEMENT - OPTION YEAR 3 PAYING IN FULL / SPEND PLAN LINES: SW42, SW42_E, FSA-4, OTH-16, OTH-51 (SEE ATTACHED ACCOUNTING BREAKDOWN) / CRQ 661031 / POP: 7/1/15 - 6/30/16

Place of Performance

Location: KANSAS CITY, JACKSON County, MISSOURI, 64131

State: Missouri Government Spending

Plain-Language Summary

Department of Agriculture obligated $24.4 million to DELL MARKETING L.P. for work described as: GSD FY15 MICROSOFT ENTERPRISE AGREEMENT - OPTION YEAR 3 PAYING IN FULL / SPEND PLAN LINES: SW42, SW42_E, FSA-4, OTH-16, OTH-51 (SEE ATTACHED ACCOUNTING BREAKDOWN) / CRQ 661031 / POP: 7/1/15 - 6/30/16 Key points: 1. Spending aligns with previous years for enterprise software licensing and support. 2. Contract utilizes a Blanket Purchase Agreement (BPA) Call, indicating established purchasing channels. 3. The fixed-price contract structure provides cost certainty for the duration. 4. No small business set-aside was utilized, suggesting a focus on large-scale enterprise solutions. 5. The contract covers a significant period, reflecting long-term IT needs. 6. Spending is concentrated on specific software categories (SW42, SW42_E, FSA-4) and other IT services.

Value Assessment

Rating: good

This contract represents a significant investment in enterprise software, specifically Microsoft products. While the exact per-unit cost for individual licenses is not detailed, the total spend of $24.4 million for one year of an enterprise agreement is within the expected range for a federal agency of this size. Benchmarking against similar large-scale Microsoft enterprise agreements across government would be necessary for a precise value-for-money assessment, but the consistent renewal suggests perceived value by the agency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

The contract was competed under SAP (Small Acquisition Procedures), which typically allows for simplified acquisition processes. The number of bidders is not specified, but SAP can sometimes limit the breadth of competition compared to full and open competition. The use of a BPA Call suggests that the underlying BPA may have been competed previously, but the specific competition for this option year is not detailed.

Taxpayer Impact: The level of competition under SAP can impact price discovery. If competition was limited, taxpayers may not have benefited from the most aggressive pricing available in the market.

Public Impact

Federal employees within the Department of Agriculture benefit from access to essential Microsoft software and services. The contract ensures continued operational capabilities for the Office of the Chief Financial Officer and other relevant departments. Geographic impact is nationwide, supporting the distributed workforce of the Department of Agriculture. Workforce implications include enabling productivity through standardized software tools and IT support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed competition information for this option year under SAP.
Potential for unoptimized pricing if competition was not robust.
Reliance on a single vendor (Microsoft) for core enterprise software.

Positive Signals

Consistent spending pattern suggests reliable IT infrastructure.
Firm fixed-price contract provides budget predictability.
Established purchasing vehicle (BPA Call) indicates efficient procurement.

Sector Analysis

This contract falls within the broader IT services and software sector, specifically focusing on enterprise software licensing and support. The market for enterprise software, particularly from major vendors like Microsoft, is characterized by large, long-term contracts. Federal spending in this area is substantial, with agencies often consolidating licenses to achieve economies of scale. Comparable spending benchmarks would involve looking at other large federal agencies' Microsoft Enterprise Agreements.

Small Business Impact

The data indicates this contract was not a small business set-aside. Given the nature of enterprise software agreements, it is unlikely that small businesses would be primary contractors for such a large-scale deal. Subcontracting opportunities for small businesses are not explicitly mentioned but could exist for specific IT support or integration services if Dell Marketing L.P. chooses to engage them.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Agriculture's Office of the Chief Financial Officer and its procurement oversight bodies. Transparency is provided through contract databases like FPDS. Accountability measures are inherent in the firm fixed-price structure and the defined period of performance. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Microsoft Enterprise Agreements
Software Licensing and Support Services
IT Services for Federal Agencies
Department of Agriculture IT Spending
Blanket Purchase Agreements

Risk Flags

Potential for limited competition under SAP.
Lack of detailed cost breakdown per software component.
Vendor lock-in risk with long-term reliance on Microsoft.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $24.4 million to DELL MARKETING L.P.. GSD FY15 MICROSOFT ENTERPRISE AGREEMENT - OPTION YEAR 3 PAYING IN FULL / SPEND PLAN LINES: SW42, SW42_E, FSA-4, OTH-16, OTH-51 (SEE ATTACHED ACCOUNTING BREAKDOWN) / CRQ 661031 / POP: 7/1/15 - 6/30/16

Who is the contractor on this award?

The obligated recipient is DELL MARKETING L.P..

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Office of the Chief Financial Officer).

What is the total obligated amount?

The obligated amount is $24.4 million.

What is the period of performance?

Start: 2015-07-01. End: 2018-06-30.

What is the historical spending trend for this Microsoft Enterprise Agreement across all its option years?

The provided data covers Option Year 3 of the GSD FY15 Microsoft Enterprise Agreement, with a spend of $24,435,204.20 for the period of July 1, 2015, to June 30, 2016. To understand the historical trend, data for Option Years 1, 2, and any subsequent years would be required. Typically, enterprise agreements involve annual payments, and the spending might remain relatively consistent year-over-year, barring significant changes in user base, software needs, or contract renegotiations. Without data for other years, it's impossible to definitively state the trend, but the consistent nature of enterprise agreements suggests a pattern of sustained expenditure for software licensing and support.

How does the cost of this Microsoft Enterprise Agreement compare to similar agreements in other federal agencies?

Direct comparison of this $24.4 million annual spend for Microsoft enterprise software requires access to detailed spending data from comparable federal agencies. Factors influencing cost include the specific Microsoft products and licenses included (e.g., Office 365, Windows, server licenses), the number of users or devices covered, and the negotiated discount levels. Larger agencies or those with more extensive Microsoft deployments might have higher absolute spending, but per-user costs could be lower due to volume discounts. Benchmarking would ideally involve comparing per-user or per-device costs for similar license suites across agencies of comparable size and mission.

What are the specific software products and services covered under the 'SW42', 'SW42_E', 'FSA-4', 'OTH-16', and 'OTH-51' spend plan lines?

The spend plan lines 'SW42', 'SW42_E', 'FSA-4', 'OTH-16', and 'OTH-51' likely correspond to specific categories within the Microsoft Enterprise Agreement. 'SW42' and 'SW42_E' could represent core Microsoft software licenses, such as Windows operating system licenses or Office suite licenses, possibly with Software Assurance ('SW42_E' might denote 'Enterprise' or 'Extended' coverage). 'FSA-4' might refer to a specific Microsoft product suite or a particular type of service, potentially related to Federal Shared Services or a specific application. 'OTH-16' and 'OTH-51' are more generic and could encompass a variety of other Microsoft products, cloud services (like Azure or Microsoft 365 components), or support services not fitting into the primary software categories. A detailed accounting breakdown or the original contract's product list would be necessary for precise identification.

What is the track record of Dell Marketing L.P. in fulfilling large federal IT contracts, particularly Microsoft Enterprise Agreements?

Dell Marketing L.P. is a major IT solutions provider and reseller with a significant history of serving federal government clients. They are an authorized reseller for Microsoft products and frequently participate in large enterprise agreements. Their track record typically involves providing hardware, software, and related services. For large federal contracts like Microsoft Enterprise Agreements, Dell's role often involves procurement, licensing management, and potentially deployment or support services. Past performance reviews and contract databases would offer specific insights into their performance on similar agreements, including on-time delivery, adherence to terms, and customer satisfaction. Generally, Dell is considered a reliable partner for such large-scale IT procurements.

What are the potential risks associated with a long-term, sole-source-like reliance on Microsoft software as indicated by this agreement?

The primary risk associated with a long-term reliance on a single vendor like Microsoft is vendor lock-in, which can limit flexibility and potentially lead to escalating costs over time as the vendor faces less competitive pressure. If Microsoft significantly increases prices or changes its licensing models unfavorably, the agency may have limited alternatives without incurring substantial migration costs and disruption. There's also a risk of security vulnerabilities specific to the Microsoft ecosystem, requiring diligent patching and security management. Furthermore, reliance on a specific technology stack can hinder the adoption of innovative solutions from other vendors or open-source alternatives that might be more cost-effective or better suited for specific tasks.

How does the use of a BPA Call under SAP affect the overall cost-effectiveness and transparency of this procurement?

Using a Blanket Purchase Agreement (BPA) Call under Small Acquisition Procedures (SAP) can offer a balance between efficiency and cost-effectiveness for recurring needs like enterprise software. The underlying BPA, if previously competed, likely established favorable pricing terms. A BPA Call allows for quick ordering against those pre-negotiated terms. However, SAP itself is designed for smaller procurements and may not involve the same level of robust competition or detailed justification as larger, full-and-open competitions. This can potentially reduce transparency compared to a full solicitation process. While efficiency is gained, the cost-effectiveness hinges on the quality of the competition that established the original BPA and whether the specific call leverages the best possible pricing within that framework.

Industry Classification

NAICS: Wholesale Trade › Professional and Commercial Equipment and Supplies Merchant Wholesalers › Computer and Computer Peripheral Equipment and Software Merchant Wholesalers

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

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Dell Technologies Inc. (UEI: 601839660)

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: $24,435,204

Exercised Options: $24,435,204

Current Obligation: $24,435,204

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: AG3142B130014

IDV Type: BPA

Timeline