DOE's $19.6M Microsoft Enterprise Agreement shows long-term reliance on a single vendor
Contract Overview
Contract Amount: $19,663,086 ($19.7M)
Contractor: Asrc Airfield and Range Services, Inc.
Awarding Agency: Department of Energy
Start Date: 2005-06-23
End Date: 2010-06-30
Contract Duration: 1,833 days
Daily Burn Rate: $10.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: MICROSOFT SOFTWARE AND MAINTENANCE (MICROSOFT/DOE ENTERPRISE AGREEMENT)
Place of Performance
Location: WEST MIFFLIN, ALLEGHENY County, PENNSYLVANIA, 15122
Plain-Language Summary
Department of Energy obligated $19.7 million to ASRC AIRFIELD AND RANGE SERVICES, INC. for work described as: MICROSOFT SOFTWARE AND MAINTENANCE (MICROSOFT/DOE ENTERPRISE AGREEMENT) Key points: 1. The contract represents a significant, long-term investment in Microsoft software and maintenance. 2. Sole-source procurement limits opportunities for competitive pricing and alternative solutions. 3. The duration of the contract (over 5 years) suggests a strategic commitment rather than a tactical purchase. 4. Performance context is limited without specific deliverables or service level agreements outlined. 5. The contract falls within the 'Other Computer Related Services' NAICS code, indicating a broad scope. 6. The firm-fixed-price structure aims to provide cost certainty for the government.
Value Assessment
Rating: fair
Benchmarking the value of this enterprise agreement is challenging without detailed service breakdowns or comparable government-wide agreements. However, the $19.6 million over five years suggests a substantial commitment. The firm-fixed-price nature provides budget predictability, but the lack of competition raises concerns about whether the Department of Energy secured the most cost-effective terms available in the market. Without specific metrics on software utilization or maintenance effectiveness, a definitive value-for-money assessment is difficult.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific product or service is uniquely available from a single source, or in cases of urgent need. The lack of competition means that the Department of Energy did not benefit from the price discovery and innovation that typically arises from a competitive bidding process. This can potentially lead to higher costs for the government.
Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure, as the vendor faced no direct rivals for this specific agreement.
Public Impact
The primary beneficiaries are Department of Energy employees and contractors who rely on Microsoft software for daily operations. The contract ensures continued access to essential software licenses and maintenance, supporting IT infrastructure continuity. The geographic impact is nationwide, covering all DOE facilities that utilize Microsoft products. Workforce implications include ensuring IT staff have the necessary tools and support for managing and utilizing the software.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing and potentially inflates costs.
- Long contract duration may lock the agency into specific technology without flexibility for future needs.
- Lack of transparency in the sole-source justification makes it difficult to assess necessity.
- Potential for vendor lock-in, making future transitions to different software providers more complex and costly.
Positive Signals
- Ensures continuity of essential software and maintenance for critical government functions.
- Firm-fixed-price contract provides budget certainty for the Department of Energy.
- Long-term agreement may offer stability and predictable support for IT operations.
Sector Analysis
This contract falls under the broader IT services sector, specifically focusing on software licensing and maintenance. The market for enterprise software, particularly from major vendors like Microsoft, is characterized by significant market share concentration. Government-wide agreements and enterprise licenses are common strategies to manage the procurement of these essential IT resources. The total addressable market for enterprise software within the federal government is in the billions of dollars annually, with significant portions dedicated to operating systems, productivity suites, and related support services.
Small Business Impact
This contract was not awarded to a small business, nor does it appear to have specific small business set-aside provisions. As a sole-source award to a large vendor, it is unlikely to involve significant subcontracting opportunities for small businesses directly related to this specific agreement. The impact on the small business ecosystem is minimal in the context of this particular contract, as it does not leverage small business capabilities.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of Energy's contracting officers and program managers. Accountability measures would be defined by the terms of the firm-fixed-price agreement, including any service level agreements or maintenance requirements. Transparency is limited due to the sole-source nature of the award, with public details often restricted. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Microsoft Enterprise Agreements
- Software Licensing and Maintenance
- IT Services Procurement
- Sole-Source IT Contracts
- Department of Energy IT Spending
Risk Flags
- Sole-source award
- Long contract duration
- Lack of competition
- Potential for vendor lock-in
Tags
it, software, maintenance, microsoft, department-of-energy, sole-source, firm-fixed-price, enterprise-agreement, computer-related-services, past-performance
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $19.7 million to ASRC AIRFIELD AND RANGE SERVICES, INC.. MICROSOFT SOFTWARE AND MAINTENANCE (MICROSOFT/DOE ENTERPRISE AGREEMENT)
Who is the contractor on this award?
The obligated recipient is ASRC AIRFIELD AND RANGE SERVICES, INC..
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $19.7 million.
What is the period of performance?
Start: 2005-06-23. End: 2010-06-30.
What is the track record of ASRC AIRFIELD AND RANGE SERVICES, INC. with the Department of Energy and other federal agencies?
ASRC AIRFIELD AND RANGE SERVICES, INC. has a history of contracts with the Department of Energy, primarily related to airfield and range support services. While this specific contract is for Microsoft software and maintenance, the company's broader federal contracting history, particularly with DOE, suggests a level of established relationship and operational capability within the agency. A deeper dive into their past performance reviews and contract completion success rates across all their federal awards would provide a more comprehensive understanding of their reliability and performance quality. It's important to note that their primary expertise appears to be in services distinct from IT software procurement, making this a potentially specialized or subcontracted effort within their portfolio.
How does the $19.6 million cost compare to similar enterprise-wide Microsoft agreements in the federal government?
Comparing this $19.6 million Microsoft enterprise agreement directly to similar federal contracts is challenging without knowing the exact scope of software, user count, and support levels included. Federal agencies often negotiate different tiers of enterprise agreements based on their specific needs. However, for a duration of approximately five years, this figure suggests a substantial investment. Agencies like the General Services Administration (GSA) often facilitate large-scale software agreements that can offer better pricing through volume. Without knowing if this DOE agreement leverages such government-wide purchasing vehicles or if it was negotiated independently, it's difficult to definitively benchmark its cost-effectiveness against market rates or other agency agreements.
What are the primary risks associated with a sole-source award for enterprise software?
The primary risks associated with a sole-source award for enterprise software like this Microsoft agreement include a lack of competitive pricing, potentially leading to higher costs for the government. Without competition, there is less incentive for the vendor to offer the most aggressive discounts or the best value. Furthermore, sole-source awards can lead to vendor lock-in, making it difficult and expensive to switch to alternative software solutions in the future. There's also a risk that the specific terms and conditions negotiated might not be as favorable as they could have been under a competitive process. Transparency is reduced, making it harder for oversight bodies and the public to assess the fairness of the price and terms.
How effective is the Department of Energy in managing long-term software maintenance contracts?
Assessing the effectiveness of the Department of Energy (DOE) in managing long-term software maintenance contracts requires a detailed review of their IT asset management, software utilization metrics, and contract performance evaluations. This specific contract, awarded in 2005 and ending in 2010, represents a past engagement. Without access to internal DOE performance reports, user satisfaction surveys, or evidence of cost savings achieved through diligent management, it's difficult to provide a definitive assessment of effectiveness for this particular agreement. Generally, agencies face challenges in ensuring they are only paying for licenses and maintenance that are actively used and necessary, especially over extended periods.
What is the historical spending pattern for Microsoft software and maintenance at the Department of Energy?
This contract, valued at $19.6 million from 2005 to 2010, represents a significant portion of DOE's historical spending on Microsoft enterprise solutions during that period. Federal agencies, including DOE, have consistently relied on Microsoft products for decades, leading to substantial and ongoing expenditures. Analyzing historical spending patterns would involve examining other Microsoft-related contracts awarded by DOE before, during, and after this agreement's timeframe. This would reveal trends in contract types (e.g., enterprise agreements vs. individual licenses), pricing fluctuations, and the evolution of software needs. Such analysis is crucial for understanding the long-term financial commitment to this vendor.
What are the implications of the 'Other Computer Related Services' NAICS code for this contract?
The North American Industry Classification System (NAICS) code 541519, 'Other Computer Related Services,' is a broad category that encompasses a wide range of IT services not specified elsewhere. For this Microsoft software and maintenance contract, it indicates that the primary service procured falls under this general classification. This could include services related to the installation, maintenance, support, and potentially customization of Microsoft software. The broadness of the code means it doesn't pinpoint the exact nature of the services as precisely as a more specific code might, but it correctly identifies the general IT service domain. It suggests the contract covers more than just the software license itself, likely including ongoing support and upkeep.
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: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Arctic Slope Regional Corporation (UEI: 076637073)
Address: 100 E. CORSON STREET, PASADENA, CA, 28
Business Categories: 8(a) Program Participant, American Indian Owned Business, Category Business, Government, HUBZone Firm, Native American Tribal Government, Minority Owned Business, Native American Owned Business, Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $19,663,086
Exercised Options: $19,663,086
Current Obligation: $19,663,086
Parent Contract
Parent Award PIID: DEAM0104IM00057
IDV Type: IDC
Timeline
Start Date: 2005-06-23
Current End Date: 2010-06-30
Potential End Date: 2010-06-30 00:00:00
Last Modified: 2010-09-08
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