DoD Awards $240M for SAP ERP Software Licenses and Maintenance to Carahsoft Technology Corp
Contract Overview
Contract Amount: $240,738,420 ($240.7M)
Contractor: Carahsoft Technology Corp
Awarding Agency: Department of Defense
Start Date: 2015-09-21
End Date: 2020-11-30
Contract Duration: 1,897 days
Daily Burn Rate: $126.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: THIS DELIVERY ORDER WILL PROVIDE COMMERCIAL OFF THE SHELF BRAND NAME SAP ENTERPRISE RESOURCE PLANNING SOFTWARE LICENSES, TIGHTLY INTEGRATED DEPENDENT THIRD PARTY SOFTWARE LICENSES, AND ASSOCIATED MAINTENANCE
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20191
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $240.7 million to CARAHSOFT TECHNOLOGY CORP for work described as: THIS DELIVERY ORDER WILL PROVIDE COMMERCIAL OFF THE SHELF BRAND NAME SAP ENTERPRISE RESOURCE PLANNING SOFTWARE LICENSES, TIGHTLY INTEGRATED DEPENDENT THIRD PARTY SOFTWARE LICENSES, AND ASSOCIATED MAINTENANCE Key points: 1. Significant investment in enterprise resource planning (ERP) software, indicating a need for integrated business management. 2. Sole awardee Carahsoft Technology Corp suggests a specific distribution channel or reseller agreement for the software. 3. The contract's duration (over 1800 days) points to a long-term need for software support and updates. 4. Focus on commercial off-the-shelf (COTS) software implies leveraging existing market solutions rather than custom development.
Value Assessment
Rating: fair
The total award amount of $240.7M for SAP ERP software licenses and maintenance over approximately 5 years appears high. Benchmarking against similar large-scale ERP deployments and software licensing agreements would be necessary to determine if this price is competitive.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is positive for price discovery. However, the specific award to Carahsoft Technology Corp, a reseller, might indicate that the ultimate software vendor was not directly competed on this specific delivery order.
Taxpayer Impact: The substantial cost suggests a significant taxpayer investment in enterprise software. Ensuring value for money through competitive pricing and effective software utilization is crucial.
Public Impact
Modernization of critical business processes through integrated ERP software. Potential for improved data management, operational efficiency, and decision-making across Army departments. Ensures continued access to essential software functionalities and vendor support for a prolonged period.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in with COTS ERP solutions.
- Risk of cost overruns if implementation or maintenance needs exceed initial estimates.
- Dependence on a single reseller (Carahsoft) for software acquisition.
Positive Signals
- Awarded under full and open competition.
- Utilizes established commercial off-the-shelf software, reducing development risk.
- Long-term contract provides stability for essential IT infrastructure.
Sector Analysis
This contract falls within the Information Technology sector, specifically for enterprise resource planning (ERP) software. Spending on large-scale ERP systems by government agencies is common for modernizing core business functions, with costs varying widely based on scope, vendor, and duration.
Small Business Impact
The data does not indicate any specific provisions or set-asides for small businesses in this delivery order. The award to Carahsoft Technology Corp, a large reseller, suggests that small business participation may not have been a primary focus for this particular acquisition.
Oversight & Accountability
The contract's full and open competition status suggests a structured procurement process. However, ongoing oversight would be needed to monitor software utilization, maintenance costs, and ensure continued value realization throughout the contract's lifespan.
Related Government Programs
- Computer and Software Stores
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- High contract value.
- Long contract duration.
- Reliance on COTS software.
- Potential for vendor lock-in.
- Sole awardee for this delivery order.
Tags
computer-and-software-stores, department-of-defense, va, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $240.7 million to CARAHSOFT TECHNOLOGY CORP. THIS DELIVERY ORDER WILL PROVIDE COMMERCIAL OFF THE SHELF BRAND NAME SAP ENTERPRISE RESOURCE PLANNING SOFTWARE LICENSES, TIGHTLY INTEGRATED DEPENDENT THIRD PARTY SOFTWARE LICENSES, AND ASSOCIATED MAINTENANCE
Who is the contractor on this award?
The obligated recipient is CARAHSOFT TECHNOLOGY CORP.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $240.7 million.
What is the period of performance?
Start: 2015-09-21. End: 2020-11-30.
What is the total cost of ownership for this SAP ERP system, including implementation, customization, and ongoing maintenance, over its lifecycle?
The provided data only reflects the award amount for licenses and maintenance, totaling $240.7M. A comprehensive total cost of ownership (TCO) analysis would require additional information on implementation services, potential customization, training, and future upgrade costs. Without this, a full assessment of the financial commitment is incomplete.
How does the per-unit cost of these SAP ERP licenses compare to similar government or commercial procurements?
Benchmarking the per-unit cost is challenging without knowing the exact number and type of licenses procured. However, given the significant total award value, it is crucial to compare these costs against established government-wide acquisition contracts (GWACs) or other large-scale ERP deals to ensure fair pricing and identify potential savings.
What mechanisms are in place to ensure the effective utilization and performance of the SAP ERP software post-award?
Effective utilization relies on robust program management, user training, and performance monitoring. The Department of the Army should have established key performance indicators (KPIs) and regular reviews to track software adoption, system performance, and alignment with strategic objectives. Vendor support and regular system audits are also critical.
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: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 12369 SUNRISE VALLEY DR,STE. D2, RESTON, VA, 20191
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $279,352,042
Exercised Options: $240,738,420
Current Obligation: $240,738,420
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0010408AZF43
IDV Type: IDC
Timeline
Start Date: 2015-09-21
Current End Date: 2020-11-30
Potential End Date: 2020-11-30 12:11:00
Last Modified: 2021-02-19
More Contracts from Carahsoft Technology Corp
- Current Sources of Income and Employment Verification Service (CSI) — $465.0M (Department of Health and Human Services)
- Current Sources of Income and Employment Verification — $368.5M (Department of Health and Human Services)
- Usda Disc Enterprise Wide Salesforce Software&support Services — $294.8M (Department of Agriculture)
- Initial Order OFF Idiq Contract W519tc23d0005 for Service NOW Licenses — $204.3M (Department of Defense)
- Base Task Order Award for the DLA ERP SAP Migration — $178.2M (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)