DoD's $54.7M Oracle Support Contract Awarded to Affigent, LLC Raises Value and Competition Concerns

Contract Overview

Contract Amount: $54,670,836 ($54.7M)

Contractor: Affigent, LLC

Awarding Agency: Department of Defense

Start Date: 2017-05-25

End Date: 2020-05-24

Contract Duration: 1,095 days

Daily Burn Rate: $49.9K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THIS DELIVERY ORDER IS FOR ORACLE PREMIER SUPPORT (MAINTENANCE) ON PREVIOUSLY ACQUIRED LICENSES (PAL) FOR PEO EIS AND AMC. THE POP WILL RUN FOR 3 YEARS. FROM 25 MAY 17 THRU 24 MAY 2020

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $54.7 million to AFFIGENT, LLC for work described as: THIS DELIVERY ORDER IS FOR ORACLE PREMIER SUPPORT (MAINTENANCE) ON PREVIOUSLY ACQUIRED LICENSES (PAL) FOR PEO EIS AND AMC. THE POP WILL RUN FOR 3 YEARS. FROM 25 MAY 17 THRU 24 MAY 2020 Key points: 1. The contract's value of $54.7 million over three years for software maintenance warrants scrutiny against market rates. 2. Awarded as 'Not Competed,' this raises questions about potential price overruns and lack of market pressure. 3. The duration of three years for a support contract may limit flexibility in adopting newer technologies or negotiating better terms. 4. As a delivery order under a larger contract, its specific performance metrics and value are tied to the parent agreement. 5. The 'Software Publishers' NAICS code suggests a market with established players, making a sole-source award less common for maintenance. 6. The contract's focus on maintenance for previously acquired licenses indicates a need for ongoing support rather than new development.

Value Assessment

Rating: questionable

The $54.7 million price tag for three years of Oracle Premier Support appears high, especially given the 'Not Competed' status. Without competitive bidding, it's difficult to benchmark against market rates or similar support contracts. The value proposition hinges on the necessity of this specific vendor's support and the criticality of the Oracle licenses to PEO EIS and AMC operations. Further analysis would require comparing this per-unit cost to industry benchmarks for Oracle Premier Support, which can vary significantly based on the specific Oracle products and support tiers involved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as 'Not Competed,' indicating a sole-source or limited competition scenario. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. The lack of competition means that Affigent, LLC was likely the only or primary vendor considered, potentially leading to higher prices than if multiple bids were solicited. This method is often used when a specific vendor's product or service is essential and cannot be obtained from others, or in urgent situations.

Taxpayer Impact: Taxpayers may be paying a premium for this software support due to the absence of competitive pressure. Without a bidding process, there's less assurance that the government secured the best possible price and value for the services rendered.

Public Impact

The primary beneficiaries are the Department of the Army's PEO EIS (Program Executive Office, Enterprise Information Systems) and AMC (Army Materiel Command), ensuring continued operation of their Oracle software. The contract delivers essential maintenance and support services for previously acquired Oracle licenses, preventing system disruptions and ensuring software functionality. The geographic impact is primarily within the Department of Defense's operational environments, supporting critical Army IT infrastructure. Workforce implications include ensuring that IT personnel within PEO EIS and AMC have access to necessary software support to perform their duties effectively.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing and reduced value for taxpayer dollars.
The sole-source nature limits opportunities for exploring alternative or more cost-effective support solutions.
Reliance on a single vendor for critical software support can create vendor lock-in and reduce future negotiation leverage.
The contract's duration might not align with evolving technology needs, potentially leading to support for outdated systems.

Positive Signals

Ensures continuity of operations for critical Army systems reliant on Oracle software.
Provides dedicated support from Affigent, LLC, potentially offering specialized knowledge of the deployed Oracle environment.
The firm fixed-price nature of the contract provides cost certainty for the duration of the delivery order.

Sector Analysis

The software publishers industry (NAICS 511210) is characterized by companies that develop and publish software. This contract falls within the IT services and software maintenance sector, a significant area of federal spending. Federal agencies often rely on extensive software suites, including enterprise resource planning (ERP) systems like those provided by Oracle, necessitating ongoing support and maintenance contracts. The total federal spending on software maintenance can be in the billions annually, with significant portions allocated to large enterprise software vendors. This contract represents a portion of that broader spending trend for specialized software support.

Small Business Impact

This contract was not competed and there is no indication of small business set-asides or subcontracting requirements. As a sole-source award, it does not directly contribute to small business contracting goals. The focus is on a large software vendor's support services, which typically involves established prime contractors rather than small business prime opportunities. There is no information provided to assess any subcontracting implications for small businesses.

Oversight & Accountability

Oversight for this delivery order would typically fall under the contracting officer and program management within the Department of the Army (PEO EIS/AMC). As a firm fixed-price contract, financial oversight focuses on ensuring the vendor meets the terms of the support agreement. Transparency is limited due to the sole-source nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected in the procurement or execution of the contract. The parent contract under which this delivery order was issued would have its own oversight mechanisms.

Related Government Programs

Oracle Software Maintenance Contracts
Department of Defense IT Services
PEO EIS IT Support
Army Materiel Command Software Licensing
Software Publishers (NAICS 511210)
Enterprise Resource Planning (ERP) Systems Support

Risk Flags

Sole-source award raises concerns about price reasonableness and value.
Lack of competition limits opportunities for cost savings and market-driven pricing.
Potential for vendor lock-in with critical software support.
Need for detailed justification for 'Not Competed' status.
Contract duration may not align with evolving technological needs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $54.7 million to AFFIGENT, LLC. THIS DELIVERY ORDER IS FOR ORACLE PREMIER SUPPORT (MAINTENANCE) ON PREVIOUSLY ACQUIRED LICENSES (PAL) FOR PEO EIS AND AMC. THE POP WILL RUN FOR 3 YEARS. FROM 25 MAY 17 THRU 24 MAY 2020

Who is the contractor on this award?

The obligated recipient is AFFIGENT, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $54.7 million.

What is the period of performance?

Start: 2017-05-25. End: 2020-05-24.

What is Affigent, LLC's track record with the Department of Defense and specifically with Oracle support contracts?

Information on Affigent, LLC's specific track record with the Department of Defense, particularly concerning Oracle support contracts, is not detailed in the provided data. However, as the awardee of this $54.7 million delivery order, it indicates a capacity to handle significant contracts. Further investigation into federal procurement databases (like FPDS or SAM.gov) would be necessary to ascertain the company's history, past performance ratings, and experience with similar software maintenance agreements. Understanding their performance on previous contracts, including any issues or commendations, is crucial for assessing the reliability and value of this current award. Without this historical context, it's difficult to fully evaluate their suitability and the justification for a sole-source award.

How does the $54.7 million price for three years of Oracle Premier Support compare to industry benchmarks or similar government contracts?

Benchmarking the $54.7 million price for three years of Oracle Premier Support is challenging without specific details on the Oracle products covered, the number of users/instances, and the exact support tier. Oracle Premier Support is generally considered their highest level of support. Industry benchmarks and government contract data suggest that such support can be substantial, often representing a significant percentage (e.g., 15-25%) of the initial software license cost annually. Given the 'Not Competed' status, it is plausible that this price may be higher than what could be achieved through competitive bidding. A thorough analysis would require comparing this contract's unit costs (e.g., cost per instance, cost per user) against publicly available data for similar Oracle support contracts awarded by other federal agencies or large enterprises, factoring in any volume discounts or negotiated terms that might be absent in a sole-source award.

What are the specific risks associated with awarding a 'Not Competed' contract for essential software maintenance?

The primary risk of a 'Not Competed' award for essential software maintenance is the potential for overpayment and reduced value for taxpayer money. Without competition, there is less incentive for the contractor to offer the lowest possible price, and the government loses the opportunity to benefit from potentially lower bids from alternative vendors. This can lead to inflated costs over the contract's $54.7 million duration. Another risk is vendor lock-in; the agency becomes dependent on a single provider, limiting flexibility to switch to different software or support vendors in the future, even if more cost-effective options emerge. Furthermore, the lack of competitive scrutiny might reduce the contractor's motivation to provide optimal service levels, although contract performance clauses would still apply. Finally, it raises questions about the thoroughness of the initial procurement process and whether alternatives were adequately explored.

What is the expected effectiveness of this contract in ensuring the continued operation of PEO EIS and AMC systems?

The effectiveness of this contract hinges on Affigent, LLC's ability to provide timely and adequate support for the specified Oracle licenses. As a Premier Support contract, it is designed to ensure the continued operation of critical systems by providing access to technical support, software updates, patches, and bug fixes directly from Oracle (via the reseller/support provider). The three-year duration suggests a commitment to maintaining these systems over a defined period. The effectiveness will be measured by the uptime of the supported systems, the responsiveness of the support provider to issues, and the successful implementation of necessary updates. Given the 'Not Competed' nature, effectiveness is also tied to whether the support provided justifies the $54.7 million expenditure compared to potential alternatives.

How has federal spending on Oracle software support evolved, and does this contract align with historical patterns?

Federal spending on Oracle software and support has historically been substantial, reflecting Oracle's significant market share in enterprise resource planning (ERP) and database management systems across various government agencies. Agencies like the Department of Defense, Health and Human Services, and others frequently procure and maintain Oracle products. Spending patterns often involve large, multi-year contracts for software licenses and ongoing maintenance/support. This $54.7 million delivery order for three years of Premier Support aligns with the general pattern of significant, long-term investments in enterprise software maintenance by large federal organizations. However, the 'Not Competed' aspect warrants scrutiny, as agencies are increasingly encouraged to explore competitive strategies, enterprise license agreements, or alternative solutions to manage costs effectively.

What are the implications of this contract being a 'Delivery Order' rather than a new contract?

This contract being a 'Delivery Order' (DO) signifies that it is a task order issued under a previously awarded indefinite-delivery, indefinite-quantity (IDIQ) contract or a similar type of basic ordering agreement. This means the underlying contract vehicle was likely competed at an earlier stage. The 'Not Competed' designation here likely refers to the specific competition for this particular delivery order, suggesting that either the original IDIQ allowed for sole-source task orders under certain conditions, or that the agency chose not to compete this specific order. The implications are that the terms, conditions, and pricing structure may be influenced by the parent contract. While the parent contract might have undergone competition, the lack of competition for this specific DO means that the government may not have achieved the best possible pricing or terms for this particular procurement of Oracle support.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Nana Regional Corporation Inc

Address: 13873 PARK CENTER RD STE 127, HERNDON, VA, 20171

Business Categories: Alaskan Native Corporation Owned Firm, Category Business, DoT Certified Disadvantaged Business Enterprise, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Not Designated a Small Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $74,022,353

Exercised Options: $54,670,836

Current Obligation: $54,670,836

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91QUZ09A0001

IDV Type: IDC

Timeline