DOJ's $53M ITAR-compliant O365 services contract awarded to CDW Government LLC shows fair value

Contract Overview

Contract Amount: $53,278,332 ($53.3M)

Contractor: CDW Government LLC

Awarding Agency: Department of Justice

Start Date: 2014-07-01

End Date: 2019-06-30

Contract Duration: 1,825 days

Daily Burn Rate: $29.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CT::IGF OFFICE 365 DEDICATED WITH ITAR ONLINE SERVICES

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 $53.3 million to CDW GOVERNMENT LLC for work described as: IGF::CT::IGF OFFICE 365 DEDICATED WITH ITAR ONLINE SERVICES Key points: 1. Contract provides essential ITAR-compliant cloud services for sensitive government data. 2. CDW Government LLC, a known IT reseller, secured the award through full and open competition. 3. The contract duration of five years suggests a stable, long-term need for these services. 4. Fixed-price contract type helps mitigate cost overrun risks for the government. 5. The award was made under a Blanket Purchase Agreement (BPA), indicating a streamlined procurement process for established IT needs. 6. The total value of $53.3M over five years averages to approximately $10.6M annually, a significant but potentially reasonable sum for dedicated cloud services.

Value Assessment

Rating: good

The contract's value of $53.3 million over five years for dedicated ITAR-compliant O365 services appears reasonable when benchmarked against similar government cloud service procurements. While specific per-unit costs for O365 licenses and dedicated support are not detailed, the overall price reflects the specialized nature of ITAR compliance and the scale of services provided to the Department of Justice. The firm fixed-price structure further supports value by locking in costs and reducing the risk of unexpected increases.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The use of a Blanket Purchase Agreement (BPA) suggests that CDW Government LLC was likely one of several pre-qualified vendors on a larger contract vehicle, allowing for competitive pricing and selection for this specific task order. The presence of competition generally drives better pricing and service offerings.

Taxpayer Impact: Full and open competition ensures that taxpayer dollars are used efficiently by leveraging market forces to secure the best possible price and service for these critical IT services.

Public Impact

The Department of Justice benefits from secure, ITAR-compliant cloud-based productivity and collaboration tools. Federal employees within the DOJ's Offices, Boards and Divisions gain access to enhanced IT services. The contract supports the DOJ's operational efficiency by providing reliable and secure IT infrastructure. Geographic impact is national, as the DOJ operates across the United States. Workforce implications include enabling DOJ staff to perform their duties effectively with modern IT tools.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if future needs are highly customized to this specific O365 setup.
Reliance on a single vendor for critical ITAR-compliant services could pose a risk if the vendor experiences significant operational issues.
The long-term nature of the contract may limit opportunities to adopt newer, potentially more cost-effective cloud technologies if they emerge.

Positive Signals

Award to a known entity, CDW Government LLC, suggests a level of established performance and reliability.
The use of a BPA indicates a potentially efficient procurement process, saving administrative costs.
Firm fixed-price contract type provides budget certainty and protects against cost escalations.
ITAR compliance is a critical positive, ensuring sensitive data is handled appropriately.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on cloud services and software licensing. The market for government IT services, particularly cloud solutions, is substantial and highly competitive. Many vendors offer O365 solutions, but the ITAR compliance requirement narrows the field to those capable of meeting stringent security and data handling regulations. Comparable spending benchmarks for similar government-wide cloud agreements (like Enterprise Software Agreements or Cloud Computing contracts) would place this contract's value within a typical range for dedicated, compliant services.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. CDW Government LLC is a large business. While there is no direct subcontracting requirement specified here, large IT contracts often involve opportunities for small businesses to participate as subcontractors to the prime vendor, providing specialized services or components. Further analysis of CDW's subcontracting plans would be needed to assess the full impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Justice's internal IT governance and contracting offices. The contract's performance would be monitored by the Contracting Officer's Representative (COR) to ensure compliance with terms, conditions, and service level agreements. Transparency is generally maintained through federal procurement databases like FPDS. While no specific Inspector General (IG) is listed for this particular award, the DOJ Office of the Inspector General has broad jurisdiction over DOJ spending and could investigate any reported mismanagement or fraud.

Related Government Programs

General Services Administration (GSA) IT Schedule 70
Microsoft Enterprise Agreements
Cloud Computing Services Contracts
Department of Justice IT Modernization Initiatives

Risk Flags

ITAR Compliance Requirements
Long-Term Contract Duration
Reliance on Single Vendor for Critical Services

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $53.3 million to CDW GOVERNMENT LLC. IGF::CT::IGF OFFICE 365 DEDICATED WITH ITAR ONLINE SERVICES

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 $53.3 million.

What is the period of performance?

Start: 2014-07-01. End: 2019-06-30.

What is the specific breakdown of costs for O365 licenses versus dedicated IT support services within this contract?

The provided data does not detail the specific cost breakdown between Microsoft 365 licenses and the dedicated IT support services provided by CDW Government LLC. The total award amount of $53,278,332.48 covers the entire scope of the contract over its 1825-day duration. To understand the value proposition more granularly, a breakdown would be necessary, showing the cost per license, the cost of dedicated support personnel (if any), and any associated ITAR compliance overhead. Without this, it's challenging to benchmark the cost-effectiveness of each component independently against market rates.

How does the pricing of this contract compare to commercial O365 Enterprise E5 licenses, considering the ITAR compliance overhead?

Direct comparison to commercial O365 Enterprise E5 licenses is difficult without knowing the exact license types and quantities procured under this BPA. Commercial E5 licenses typically range from $57 to $60 per user per month. However, this contract includes ITAR-compliant services, which often involve additional security configurations, dedicated support, and potentially specialized infrastructure, adding significant overhead beyond standard commercial offerings. CDW Government LLC, as a reseller and service provider, also adds a margin. Therefore, the effective per-user cost under this contract is likely higher than the base commercial license price, but this premium should be evaluated against the value of guaranteed ITAR compliance and dedicated support for the DOJ.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

The provided data does not specify the Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. Typically, for IT services contracts of this nature, SLAs would cover aspects such as system uptime, response times for technical support, data security incident response times, and performance metrics for specific O365 applications. KPIs would measure the contractor's adherence to these SLAs and overall service quality. The effectiveness of the contract's value and performance hinges on these metrics, which are usually detailed in the contract's statement of work or associated appendices.

What is CDW Government LLC's track record with similar ITAR-compliant cloud service contracts for federal agencies?

CDW Government LLC is a well-established reseller and provider of IT solutions to the federal government, holding numerous contracts and BPAs across various agencies. While specific details on their track record with *solely* ITAR-compliant O365 dedicated services for agencies of the DOJ's size are not immediately available in this dataset, their extensive experience with government IT procurement suggests they possess the necessary capabilities and understanding of compliance requirements. Their ability to secure this contract through full and open competition implies they met the technical and compliance qualifications set forth by the DOJ.

What is the historical spending trend for O365 or similar cloud services within the Department of Justice?

The provided data only pertains to this specific contract awarded in 2014. To understand historical spending trends for O365 or similar cloud services within the Department of Justice, a broader analysis of DOJ's procurement history would be required. This would involve examining spending across multiple fiscal years and potentially multiple contracts or task orders for cloud productivity suites and related services. Such an analysis could reveal patterns of increasing or decreasing reliance on cloud solutions, shifts in vendor choices, and overall budget allocation trends for IT infrastructure.

Are there any identified risks associated with CDW Government LLC's performance on this contract?

The provided data does not indicate any specific performance risks or issues encountered with CDW Government LLC on this particular contract. The contract was awarded under full and open competition and has a fixed-price structure, which generally helps mitigate certain risks like cost overruns. However, as with any long-term IT service contract, potential risks could include vendor performance issues, cybersecurity vulnerabilities, or the need for the government to adapt to evolving technology landscapes. A comprehensive risk assessment would require reviewing performance reports, user feedback, and any contract modifications or disputes.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $53,278,332

Exercised Options: $53,278,332

Current Obligation: $53,278,332

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DJJ14F2527

IDV Type: BPA

Timeline