DoD's $165M software purchase from Carahsoft Technology Corp. shows a trend in government IT procurement

Contract Overview

Contract Amount: $165,231,714 ($165.2M)

Contractor: Carahsoft Technology Corp

Awarding Agency: Department of Defense

Start Date: 2015-07-10

End Date: 2018-12-22

Contract Duration: 1,261 days

Daily Burn Rate: $131.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: AWARD

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $165.2 million to CARAHSOFT TECHNOLOGY CORP for work described as: AWARD Key points: 1. The contract's value suggests a significant investment in software solutions for the Department of Defense. 2. Full and open competition indicates a broad market approach, potentially leading to competitive pricing. 3. The fixed-price contract type offers cost certainty for the government. 4. A duration of over three years points to ongoing software needs. 5. The award to Carahsoft, a major government IT reseller, highlights the role of intermediaries in federal IT acquisition. 6. The absence of small business set-aside flags a focus on larger, established vendors for this specific procurement.

Value Assessment

Rating: good

The award of over $165 million for software indicates a substantial government investment. Benchmarking this against similar large-scale software procurements for defense agencies would be necessary for a precise value-for-money assessment. However, the use of full and open competition suggests an effort to leverage market forces to achieve competitive pricing, which is a positive indicator for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. This approach typically fosters a competitive environment, encouraging multiple vendors to offer their best pricing and solutions. The specific number of bidders is not provided, but the open competition framework is designed to maximize price discovery and ensure the government receives competitive offers.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices due to vendor rivalry and a wider selection of qualified solutions, ensuring efficient use of public funds.

Public Impact

The Department of Defense is the primary beneficiary, receiving software solutions to support its operations. The services delivered are software licenses and potentially related support, crucial for military IT infrastructure. The geographic impact is likely nationwide within DoD installations, though specific deployment locations are not detailed. Workforce implications may include training for DoD personnel on new software and potential support roles for the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on the software procured makes it difficult to assess its criticality and potential for vendor lock-in.
The substantial award amount warrants scrutiny to ensure it aligns with actual needs and market prices.
Reliance on a single reseller (Carahsoft) for a large sum could warrant further investigation into pricing and alternative sourcing.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process.
The firm fixed-price contract type provides budget certainty.
The contract duration indicates a sustained need and potential for long-term support.

Sector Analysis

This contract falls within the Software Publishers (NAICS 511210) sector, a critical component of the broader Information Technology industry. The federal government is a major consumer of software, with spending often concentrated on enterprise resource planning, cybersecurity, and specialized defense applications. The market is characterized by both large established players and specialized vendors, with resellers like Carahsoft playing a significant role in aggregating and distributing a wide range of software products to government agencies.

Small Business Impact

This contract was not set aside for small businesses, nor does it indicate any specific subcontracting requirements for small businesses. The award to Carahsoft, a large reseller, suggests that the primary focus was on acquiring specific software solutions, potentially from major software publishers, rather than on direct small business engagement for this particular procurement. This may limit direct opportunities for small businesses in this specific transaction.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Transparency is generally maintained through contract award databases like FPDS. Accountability measures are inherent in the firm fixed-price structure, requiring the contractor to deliver specified software. Further oversight could involve Inspector General investigations if performance issues or fraud are suspected.

Related Government Programs

General Services Administration (GSA) Schedules
Defense Information Technology Contracting Organization (DITCO) contracts
Software and Information Systems contracts
Enterprise Software Agreements

Risk Flags

Potential for cost creep if scope expands beyond initial requirements.
Risk of technology obsolescence over the contract's duration.
Dependence on a single reseller could limit future flexibility.
Need for robust contract management to ensure delivery and performance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $165.2 million to CARAHSOFT TECHNOLOGY CORP. AWARD

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 $165.2 million.

What is the period of performance?

Start: 2015-07-10. End: 2018-12-22.

What specific software products or suites were procured under this contract?

The provided data does not specify the exact software products or suites procured under this contract. It only indicates the NAICS code for Software Publishers (511210) and the awardee, Carahsoft Technology Corp., which is a major reseller of various software solutions. To understand the precise nature of the acquisition, one would need to consult the detailed contract award documents or agency procurement records. This information is crucial for assessing the strategic value and necessity of the software for the Department of the Army's operations.

How does the per-unit cost of the software compare to commercial market rates?

Without knowing the specific software titles, quantities, and licensing terms, it is impossible to provide a direct per-unit cost comparison to commercial market rates. Federal procurement often involves negotiated discounts, volume purchasing, and specific government-mandated features or support levels that can differ from commercial offerings. Carahsoft, as a reseller, aggregates products from numerous publishers, each with its own pricing structure. A detailed analysis would require identifying the software and comparing negotiated government prices against equivalent commercial licenses and support agreements, considering any volume discounts or special contract vehicles utilized.

What is Carahsoft Technology Corp.'s track record with similar large-scale software procurements for the Department of Defense?

Carahsoft Technology Corp. is a prominent government IT reseller with a substantial track record of winning and fulfilling large federal contracts, including many for the Department of Defense. They specialize in providing a wide array of software, hardware, and IT solutions through various contract vehicles, often leveraging manufacturer partnerships. Their success in securing contracts like this one, valued at over $165 million, indicates a strong understanding of federal procurement processes and a broad portfolio of available products. Agencies often rely on Carahsoft for efficient access to a diverse range of IT solutions from numerous vendors.

What risk indicators were identified during the procurement process for this contract?

The provided data does not explicitly detail risk indicators identified during the procurement. However, general risks associated with large software procurements include potential cost overruns if not managed tightly, vendor lock-in, obsolescence of technology, and challenges in integration with existing systems. The use of full and open competition and a firm fixed-price contract are mechanisms designed to mitigate some of these risks by promoting competition and cost certainty. Further assessment would require reviewing the agency's source selection documentation and any pre-award risk assessments conducted.

How does this contract's spending pattern compare to historical software spending by the Department of the Army?

This contract represents a significant single award of approximately $165 million for software. To compare historical spending patterns, one would need to analyze the Department of the Army's total IT and software expenditures over several fiscal years. This single award, while substantial, might represent a portion of the Army's overall software budget, which can fluctuate based on modernization priorities, cybersecurity needs, and specific program requirements. Analyzing trends in contract values, types of software procured, and primary vendors over time would provide context for this specific award's significance.

What are the implications of this contract being awarded to a reseller rather than directly to software publishers?

Awarding a contract to a reseller like Carahsoft, rather than directly to software publishers, can offer several advantages for the government. Resellers often provide a consolidated point of contact for a wide range of products from multiple publishers, simplifying the acquisition process. They can also leverage their purchasing power to negotiate favorable pricing and terms. Furthermore, resellers may offer value-added services such as licensing management, technical support aggregation, and integration assistance. However, it's crucial to ensure that the reseller's markup does not inflate the final cost compared to direct purchasing, and that the government maintains clear visibility into the underlying software publisher agreements.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

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

Financial Breakdown

Contract Ceiling: $165,231,714

Exercised Options: $165,231,714

Current Obligation: $165,231,714

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91QUZ09A0003

IDV Type: IDC

Timeline