USDA Forest Service awards $35M for Microsoft licenses via GSA contract, replacing prior order

Contract Overview

Contract Amount: $35,062,766 ($35.1M)

Contractor: Dell Marketing L.P.

Awarding Agency: Department of Agriculture

Start Date: 2009-06-26

End Date: 2014-06-25

Contract Duration: 1,825 days

Daily Burn Rate: $19.2K/day

Competition Type: NON-COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MICROSOFT ENTERPRISE PERPETUAL LICENSE 3-YEAR INSTALLMENT PURCHASE PLAN IN ACCORDANCE WITH THE ATTACHED QUOTE # FSEARAD60509-R01 AND UNDER THE GSA CONTRACT GS-35F-4027D AS SUPPLEMENTED BY THE TERMS AND CONDITIONS OF USDA BPA AG-3142-B-09-0010. THE ATTACHED SUPPLEMENTAL TERMS AND CONDITIONS OF THE INSTALLMENT PURCHASE PLAN FOR PERPETUAL LICENSE AND SOFTWARE ASSURANCE ARE ALSO INCORPORATED INTO THIS ORDER. DUE TO SYSTEM LIMITATIONS THIS AWARD REPLACES AG-7604-D-09-0274. THIS AWARD IS CREATED WITH A DIFFERENT VENDOR CODE TO ALLOW FOR NOTICE OF ASSIGNMENT. FAR 52.217-9, OPTION TO EXTEND THE TERM OFTHE CONTRACT, IS HEREBY INCORPORATED ASFOLLOWS: OPTION TO EXTEND THE TERM OF THE CONTRACT (MAR 2000) (A) THE GOVERNMENT MAY EXTEND THE TERM OF THIS CONTRACT BY WRITTEN NOTICE TO THE CONTRACTOR WITHIN 30 DAYS OF THE END OF THE PERFORMANCE PERIOD; PROVIDED THAT THE GOVERNMENT GIVES THE CONTRACTOR A PRELIMINARY WRITTEN NOTICE OF ITS INTENT TO EXTEND AT LEAST 60 DAYS BEFORE THE CONTRACT EXPIRES. THE PRELIMINARY NOTICE DOES NOT COMMIT THE GOVERNMENT TO AN EXTENSION. (B) IF THE GOVERNMENT EXERCISES THIS OPTION, THE EXTENDED CONTRACT SHALL BE CONSIDERED TO INCLUDE THIS OPTION CLAUSE. (C) THE TOTAL DURATION OF THIS CONTRACT, INCLUDING THE EXERCISE OF ANY OPTIONS UNDER THIS CLAUSE, SHALL NOT EXCEED 4 YEARS. (END OF CLAUSE) THE BASE PERIOD FOR THIS DELIVERY ORDER IS JUNE 26, 2009 THROUGH JUNE 25, 2010. THE OPTION PERIOD ARE AS FOLLOWS: OPTION PERIOD 1 JUNE 26, 2010 - JUNE 25, 2011 OPTION PERIOD 2 JUNE 26, 2011 - JUNE 25, 2012 OPTION PERIOD 3 JUNE 26, 2012 - JUNE 25, 2013 THE PAYMENT AMOUNTS ARE AS FOLLOWS: BASE PERIOD (INCLUDED IN BASE AWARD): $6,000,000.00 OPTION PERIOD 1: $9,541,140.10 OPTION PERIOD 2: $9,541,140.10 OPTION PERIOD 3: $9,541,140.10 TOTAL CONTRACT VALUE (IF ALL OPTIONS ARE EXERCISED): $34,623,420.30 FAR 52.232-18, AVAILABILITY OF FUNDS, IS INCORPORATED INTO THIS ORDER WITH RESPECT TO OPTION PERIODS 1, 2 AND 3 AS FOLLOWS: FAR 52.232-18, AVAILABILITY OF FUNDS (APR 1984) FUNDS ARE NOT PRESENTLY AVAILABLE FOR THIS CONTRACT. THE GOVERNMENT'S OBLIGATION UNDER THIS CONTRACT IS CONTINGENT UPON THE AVAILABILITY OF APPROPRIATED FUNDS FROM WHICH PAYMENT FOR CONTRACT PURPOSES CAN BE MADE. NO LEGAL LIABILITY ON THE PART OF THE GOVERNMENT FOR ANY PAYMENT MAY ARISE UNTIL FUNDS ARE MADE AVAILABLE TO THE CONTRACTING OFFICER FOR THIS CONTRACT AND UNTIL THE CONTRACTOR RECEIVES NOTICE OF SUCH AVAILABILITY, TO BE CONFIRMED IN WRITING BY THE CONTRACTING OFFICER. (END OF CLAUSE) INVOICES SHALL BE SUBMITTED TO THE CONTRACTING OFFICER'S REPRESENTATIVE (COR), MR. JOE ERWIN, WHO CAN BE REACHED AT (703)605-4574 OR VIA EMAIL AT JERWIN@FS.FED.US. UPON VERIFICATION OF SERVICES, THE COR WILL FORWARD ACCEPTED INVOICES FOR PAYMENT PROCESSING TO THE CONTRACTING OFFICE. INVOICE PAYMENT ISSUES SHALL BE ADDRESSED TO MS. JANIS SATTERWHITE AT (505)842-3151 OR VIA EMAIL AT JSATTERWHITE@FS.FED.US.

Place of Performance

Location: ROUND ROCK, WILLIAMSON County, TEXAS, 78682

State: Texas Government Spending

Plain-Language Summary

Department of Agriculture obligated $35.1 million to DELL MARKETING L.P. for work described as: MICROSOFT ENTERPRISE PERPETUAL LICENSE 3-YEAR INSTALLMENT PURCHASE PLAN IN ACCORDANCE WITH THE ATTACHED QUOTE # FSEARAD60509-R01 AND UNDER THE GSA CONTRACT GS-35F-4027D AS SUPPLEMENTED BY THE TERMS AND CONDITIONS OF USDA BPA AG-3142-B-09-0010. THE ATTACHED SUPPLEMENTAL TERMS AND… Key points: 1. Significant investment in enterprise software licenses for a 5-year period. 2. Utilizes GSA contract and a BPA, indicating established procurement channels. 3. Potential for vendor lock-in with perpetual licenses and software assurance. 4. Sector is IT, specifically software procurement for government operations.

Value Assessment

Rating: fair

The total award amount is $35,062,765.57 for a 5-year period. Without specific per-unit pricing or comparison to similar government-wide agreements, a precise value assessment is difficult. However, the duration suggests a bulk purchase strategy.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This was issued as a non-competitive delivery order under a GSA contract and USDA BPA. While the underlying GSA contract may have had competition, this specific order's non-competitive nature limits price discovery and potentially leads to higher costs than a fully competitive process.

Taxpayer Impact: Taxpayers are funding a significant enterprise software purchase. The lack of direct competition on this order may result in a higher cost than if it were re-competed.

Public Impact

Ensures continued access to critical Microsoft software for USDA operations. Supports government-wide IT infrastructure and agency-specific needs. Potential for long-term reliance on Microsoft products and services. The replacement of a prior order suggests a need for updated licensing or vendor consolidation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award limits price discovery.
Potential for vendor lock-in with perpetual licenses.
Long contract duration (5 years) may not reflect market changes.

Positive Signals

Leverages existing GSA contract and BPA for efficient procurement.
Provides continuity of essential software for agency operations.
Consolidates licensing under a single, albeit non-competitive, order.

Sector Analysis

This award falls within the Information Technology sector, specifically software licensing. Government spending on enterprise software is substantial, with agencies often relying on large vendors like Microsoft for critical operational tools. Benchmarks for such large-scale perpetual license agreements are difficult to establish without detailed comparisons.

Small Business Impact

This award does not appear to directly benefit small businesses, as it is a large enterprise software purchase likely from a major vendor or reseller, procured through established government contracts. There is no indication of small business set-asides or subcontracting.

Oversight & Accountability

The use of a GSA contract and a BPA suggests some level of pre-negotiation and oversight. However, the non-competitive nature of this specific delivery order warrants scrutiny to ensure fair pricing and value for the government.

Related Government Programs

Computer and Software Stores
Department of Agriculture Contracting
Forest Service Programs

Risk Flags

Non-competitive award.
Potential for vendor lock-in.
High upfront cost of perpetual licenses.
Lack of detailed pricing comparison.
Long-term contract duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $35.1 million to DELL MARKETING L.P.. MICROSOFT ENTERPRISE PERPETUAL LICENSE 3-YEAR INSTALLMENT PURCHASE PLAN IN ACCORDANCE WITH THE ATTACHED QUOTE # FSEARAD60509-R01 AND UNDER THE GSA CONTRACT GS-35F-4027D AS SUPPLEMENTED BY THE TERMS AND CONDITIONS OF USDA BPA AG-3142-B-09-0010. THE ATTACHED SUPPLEMENTAL TERMS AND CONDITIONS OF THE INSTALLMENT PURCHASE PLAN FOR PERPETUAL LICENSE AND SOFTWARE ASSURANCE ARE ALSO INCORPORATED INTO THIS ORDER. DUE TO SYSTEM LIMITATIONS THIS AWARD REPLACES AG-7604-D-09-0274. THIS AWARD IS CREATED WI

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 (Forest Service).

What is the total obligated amount?

The obligated amount is $35.1 million.

What is the period of performance?

Start: 2009-06-26. End: 2014-06-25.

What was the justification for issuing this as a non-competitive delivery order, especially given the significant dollar amount?

The data indicates this was a 'NON-COMPETITIVE DELIVERY ORDER'. Without further documentation, the specific justification is unclear. It could be due to the replacement of a prior order, system limitations, or a determination that only one vendor could meet the requirements at the time. However, such justifications should be robust to ensure fair pricing and prevent vendor lock-in.

How does the cost of these perpetual licenses compare to subscription-based models or other government-wide agreements for similar Microsoft products?

The provided data does not allow for a direct comparison to subscription models or other agreements. Perpetual licenses represent a large upfront cost, and their long-term value depends on usage and upgrade cycles. A comparison would require access to pricing data for alternative procurement methods and similar contracts to assess if this was the most cost-effective approach.

What is the plan for managing software assurance and potential future upgrades or transitions away from these perpetual licenses?

The award includes 'SOFTWARE ASSURANCE', indicating a plan for updates and support. However, the long-term strategy for managing these perpetual licenses, including potential transitions to newer versions or different licensing models, is not detailed. Agencies should have a roadmap for software lifecycle management to avoid obsolescence and ensure continued value.

Industry Classification

NAICS: Retail Trade › Electronics and Appliance Stores › Computer and Software Stores

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

Competition & Pricing

Extent Competed: NON-COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: ONE DELL WAY, ROUND ROCK, TX, 90

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership

Financial Breakdown

Contract Ceiling: $35,062,766

Exercised Options: $35,062,766

Current Obligation: $35,062,766

Parent Contract

Parent Award PIID: GS35F4027D

IDV Type: FSS

Timeline