DOJ's $14.4M Microsoft Software Purchase via CDW Government LLC Shows Moderate Value and Limited Competition

Contract Overview

Contract Amount: $14,409,712 ($14.4M)

Contractor: CDW Government LLC

Awarding Agency: Department of Justice

Start Date: 2009-09-23

End Date: 2012-06-30

Contract Duration: 1,011 days

Daily Burn Rate: $14.3K/day

Competition Type: FOLLOW ON TO COMPETED ACTION

Sector: IT

Official Description: MICROSOFT LICENSES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20530, UNITED STATES OF AMERICA

State: District of Columbia Government Spending

Plain-Language Summary

Department of Justice obligated $14.4 million to CDW GOVERNMENT LLC for work described as: MICROSOFT LICENSES Key points: 1. The contract's value appears reasonable given the duration and nature of software licensing. 2. Competition was limited, suggesting potential for higher prices than a fully open market. 3. The follow-on nature of the award indicates a reliance on existing solutions. 4. Performance context is limited without specific usage or outcome data. 5. This contract falls within the broader IT and software procurement sector. 6. The use of a BPA indicates a pre-competed framework was leveraged.

Value Assessment

Rating: good

The $14.4 million spent over approximately three years for Microsoft licenses represents a significant but not excessive investment for a federal agency like the Department of Justice. Benchmarking against similar large-scale software procurements for enterprise-level licenses suggests this pricing is within a competitive range, especially considering potential volume discounts and the specific suite of products. The value is further supported by the use of a Blanket Purchase Agreement (BPA), which typically implies a degree of pre-negotiated favorable terms.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was a follow-on to a competed action, indicating that the initial award was subject to competition. However, as a follow-on, the current action may have had limited direct competition, potentially relying on the established relationship and terms from the original competition. The specific details of how many bidders were considered for this follow-on are not provided, but the 'FOLLOW ON TO COMPETED ACTION' designation suggests it wasn't a fresh, full-and-open competition. This can impact price discovery.

Taxpayer Impact: Limited competition on follow-on actions can mean taxpayers may not always benefit from the most aggressive pricing achievable through a new, broad solicitation. However, if the original competition was robust, the established pricing might still represent good value.

Public Impact

Federal employees within the Department of Justice benefit from access to essential Microsoft software for their daily operations. The contract ensures the continued availability of critical software for administrative and operational functions across various DOJ offices. The geographic impact is primarily within the District of Columbia, where the agency is headquartered, but likely supports nationwide operations. Workforce implications include enabling productivity and access to necessary digital tools for DOJ personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in due to follow-on nature.
Lack of transparency on specific license types and quantities limits detailed value assessment.
Reliance on a single vendor (Microsoft) for core software needs.

Positive Signals

Leverages a pre-competed BPA, indicating initial competitive vetting.
Follow-on action suggests continuity and stability of essential software services.
CDW Government LLC is an established vendor with experience in federal IT procurement.

Sector Analysis

This contract falls within the broader Information Technology (IT) sector, specifically focusing on software licensing and procurement. The market for enterprise software licenses, particularly for major vendors like Microsoft, is substantial within the federal government. Agencies frequently procure these licenses through various contract vehicles, including BPAs, to ensure access to necessary tools. Comparable spending benchmarks would involve analyzing other federal agencies' expenditures on similar Microsoft enterprise agreements.

Small Business Impact

There is no indication that this contract involved a small business set-aside. As a follow-on to a competed action, the primary contractor, CDW Government LLC, is a large business. Subcontracting implications are not detailed, but large IT resellers often work with a network of partners, which could include small businesses. However, without specific subcontracting plans or goals, the direct impact on the small business ecosystem is unclear.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Justice's procurement and IT management divisions. Accountability measures are inherent in the contract terms and performance expectations. Transparency is facilitated through federal procurement databases like FPDS, where contract actions are recorded. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Microsoft Enterprise Agreements
General Services Administration (GSA) Schedule Contracts
IT Software Licensing Procurements
Department of Justice IT Spending

Risk Flags

Limited competition on follow-on actions.
Lack of specific product details hinders precise value analysis.
Potential for price increases over the contract duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $14.4 million to CDW GOVERNMENT LLC. MICROSOFT LICENSES

Who is the contractor on this award?

The obligated recipient is CDW GOVERNMENT LLC.

Which agency awarded this contract?

Awarding agency: Department of Justice (Offices, Boards and Divisions).

What is the total obligated amount?

The obligated amount is $14.4 million.

What is the period of performance?

Start: 2009-09-23. End: 2012-06-30.

What specific Microsoft software products and versions were included in this $14.4 million purchase?

The provided data does not specify the exact Microsoft software products or versions covered under this $14.4 million contract. Federal IT procurements for software licenses can encompass a wide range of products, including operating systems (e.g., Windows), productivity suites (e.g., Microsoft 365/Office), server software (e.g., Windows Server, SQL Server), development tools, and specialized applications. Without a detailed product list or license breakdown, it is difficult to precisely assess the value or compare it to market rates for specific offerings. The duration of the contract (nearly three years) suggests it likely covered multiple product families and potentially different licensing models (e.g., perpetual licenses, subscriptions).

How does the per-user cost of these Microsoft licenses compare to other federal agencies or the commercial market?

Determining a precise per-user cost is challenging without knowing the exact number of users and the specific software licenses procured. However, the total contract value of $14.4 million over approximately 1011 days (roughly 3 years) suggests an average annual spend of around $4.8 million. If we assume a large agency like DOJ has thousands of users, the per-user cost could fall within a typical range for enterprise agreements. Federal agencies often leverage GSA Schedules or other large-volume agreements that provide negotiated discounts. Commercial market rates vary significantly based on volume, agreement type (e.g., Enterprise Agreement vs. direct purchase), and specific product versions. Generally, federal pricing, due to volume and negotiation, aims to be competitive with or better than commercial rates for similar scope.

What was the original competition that led to the award of the BPA this contract followed?

The data indicates this contract is a 'FOLLOW ON TO COMPETED ACTION' and was awarded under a BPA (Blanket Purchase Agreement). This implies that the underlying BPA itself was established through a competitive process. Federal agencies use BPAs to streamline the procurement of commonly purchased items or services from one or more pre-vetted vendors. The initial competition for the BPA would have involved soliciting proposals from multiple vendors, evaluating them based on predefined criteria (price, technical capability, past performance, etc.), and selecting vendors to hold the BPA. This specific action is a task order or call against that existing BPA, meaning the competition for this particular purchase was likely limited to the vendors holding the BPA, or potentially a subset thereof, depending on the BPA's terms.

What are the key risks associated with relying on CDW Government LLC for this extended period?

Key risks associated with relying on CDW Government LLC for this extended period include potential vendor lock-in, where the agency becomes heavily dependent on CDW's offerings and pricing structure, making it difficult to switch vendors or negotiate significantly better terms in the future. There's also a risk related to price escalation over time, especially if the initial competition for the BPA was not sufficiently robust or if market conditions change unfavorably. Furthermore, while CDW is a reputable reseller, the ultimate risk lies with Microsoft as the software provider; any changes in Microsoft's product roadmap, support policies, or licensing terms directly impact the DOJ. Ensuring continuous access to technical support and timely software updates from both CDW and Microsoft is also a consideration.

How does this spending compare to the Department of Justice's overall IT budget or similar software procurements?

The $14.4 million spent on Microsoft licenses represents a specific component of the Department of Justice's overall IT expenditure. Federal agencies typically have substantial IT budgets that cover hardware, software, services, cybersecurity, and personnel. Without access to the DOJ's total IT budget or a comprehensive list of its software procurements, it's difficult to place this $14.4 million in precise context. However, for a large federal department like DOJ, which encompasses numerous bureaus and offices (e.g., FBI, DEA, ATF, US Marshals), this amount is likely a moderate portion of their software acquisition costs, reflecting the essential nature of Microsoft products in government operations. Comparable software procurements across agencies often run into tens or hundreds of millions of dollars annually for major software suites.

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: FOLLOW ON TO COMPETED ACTION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Evaluated Preference: NONE

Contractor Details

Parent Company: CDW Corporation (UEI: 808068253)

Address: 230 N MILWAUKEE AVE, VERNON HILLS, IL, 60061

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $14,409,712

Exercised Options: $14,409,712

Current Obligation: $14,409,712

Parent Contract

Parent Award PIID: DJJ08F1710

IDV Type: BPA

Timeline