DoD Awards Oracle Support Contract to Mythics, LLC for $40M, Raising Questions on Value and Competition

Contract Overview

Contract Amount: $40,084,184 ($40.1M)

Contractor: Mythics, LLC

Awarding Agency: Department of Defense

Start Date: 2015-05-20

End Date: 2017-05-24

Contract Duration: 735 days

Daily Burn Rate: $54.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ORACLE PREMIER SUPPORT (MAINTENANCE) ON PREVIOUSLY ACQUIRED LICENSES (PAL) FOR PEO EIS AND AMC.

Place of Performance

Location: VIRGINIA BEACH, VIRGINIA BEACH CITY County, VIRGINIA, 23454

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $40.1 million to MYTHICS, LLC for work described as: ORACLE PREMIER SUPPORT (MAINTENANCE) ON PREVIOUSLY ACQUIRED LICENSES (PAL) FOR PEO EIS AND AMC. Key points: 1. Contract awarded to Mythics, LLC for Oracle Premier Support. 2. Total value of the award is $40,084,184.32. 3. The contract falls under 'Other Computer Related Services' (NAICS 541519). 4. Competition method was 'Full and Open', but specific details on price discovery are limited. 5. The contract duration is 735 days, ending in May 2017.

Value Assessment

Rating: questionable

The contract value of $40M for Oracle Premier Support over two years appears high, especially considering it's for maintenance on previously acquired licenses. Benchmarking against similar support contracts for enterprise software is crucial to determine if this pricing is competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

While the contract was awarded under full and open competition, the limited information provided makes it difficult to assess the effectiveness of the price discovery process. It's unclear if multiple vendors were truly incentivized to offer competitive pricing for this specific support renewal.

Taxpayer Impact: Taxpayer funds are being used for this significant expenditure on software maintenance. Ensuring the price reflects fair market value is essential to avoid overspending and maximize the return on investment for these IT assets.

Public Impact

Significant taxpayer funds allocated for software maintenance, impacting the overall IT budget. Potential for vendor lock-in with specialized support contracts. Ensuring data security and system integrity through reliable support is a key public interest. The duration of the contract suggests a long-term reliance on this specific vendor for critical system support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High cost for software maintenance
Limited transparency on price discovery
Potential for vendor lock-in

Positive Signals

Awarded under full and open competition
Supports critical PEO EIS and AMC systems

Sector Analysis

This contract falls within the IT services sector, specifically focusing on software maintenance and support. Spending benchmarks for similar enterprise software support contracts can vary widely based on the software's criticality, vendor, and the level of support required. $40M over two years for a single vendor's support is substantial.

Small Business Impact

The contract data indicates that the awardee is Mythics, LLC. There is no specific information provided regarding subcontracting opportunities for small businesses on this particular award. Further investigation would be needed to determine if small businesses were involved.

Oversight & Accountability

Oversight of this contract would involve monitoring vendor performance, ensuring adherence to the contract terms, and verifying that the support provided meets the Department of Defense's requirements. Regular audits and performance reviews are key accountability mechanisms.

Related Government Programs

Other Computer Related Services
Department of Defense Contracting
Department of the Army Programs

Risk Flags

High expenditure for software maintenance
Potential for limited price competition despite 'Full and Open' award
Lack of transparency on specific services included in 'Premier Support'
Contract duration may indicate a lack of alternative solutions explored

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.1 million to MYTHICS, LLC. ORACLE PREMIER SUPPORT (MAINTENANCE) ON PREVIOUSLY ACQUIRED LICENSES (PAL) FOR PEO EIS AND AMC.

Who is the contractor on this award?

The obligated recipient is MYTHICS, 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 $40.1 million.

What is the period of performance?

Start: 2015-05-20. End: 2017-05-24.

What is the justification for the high cost of Oracle Premier Support, and how does it compare to industry benchmarks for similar maintenance agreements?

The justification for the high cost of Oracle Premier Support is often tied to the vendor's proprietary technology, the criticality of the systems it supports, and the comprehensive nature of the 'premier' service level. However, without specific details on the services rendered and the exact Oracle products covered, a direct comparison to industry benchmarks is challenging. It is essential to obtain detailed service level agreements and compare pricing with other government agencies or private sector entities using similar Oracle products and support tiers to ascertain if the $40M award represents fair market value.

How effectively did the 'Full and Open Competition' process ensure competitive pricing, given the specialized nature of Oracle Premier Support?

While the contract was awarded under 'Full and Open Competition,' the specialized nature of Oracle Premier Support can inherently limit true price competition. Oracle often controls its premier support offerings tightly, and authorized resellers like Mythics, LLC may have limited flexibility in pricing. The effectiveness of the competition hinges on whether multiple authorized resellers were genuinely able to offer significantly different pricing structures or value-added services that drove down the overall cost for the Department of Defense.

What is the long-term strategy for managing Oracle software licenses and support costs to ensure value and avoid escalating expenditures?

The long-term strategy for managing Oracle software licenses and support costs should involve a comprehensive review of the agency's actual software utilization and needs. This includes exploring options like consolidating licenses, negotiating enterprise-wide agreements, or even considering alternative software solutions that may offer better total cost of ownership. Proactive contract management, regular market analysis, and seeking expert advice on licensing optimization are crucial to prevent escalating expenditures and ensure continued value from IT investments.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

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: 1439 N GREAT NECK RD STE 2, VIRGINIA BEACH, VA, 23454

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $40,084,184

Exercised Options: $40,084,184

Current Obligation: $40,084,184

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91QUZ06A0003

IDV Type: IDC

Timeline