DoD's $44.4M Microsoft Premier Services Contract: A 3-Year Deal with Limited Competition
Contract Overview
Contract Amount: $44,372,206 ($44.4M)
Contractor: Microsoft Corporation
Awarding Agency: Department of Defense
Start Date: 2013-06-30
End Date: 2016-11-30
Contract Duration: 1,249 days
Daily Burn Rate: $35.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: IGF::CT::IGF MICROSOFT PREMIER SERVICES
Place of Performance
Location: REDMOND, KING County, WASHINGTON, 98052
Plain-Language Summary
Department of Defense obligated $44.4 million to MICROSOFT CORPORATION for work described as: IGF::CT::IGF MICROSOFT PREMIER SERVICES Key points: 1. Significant spending on IT services, primarily for Microsoft software support. 2. Sole-source nature raises questions about price competitiveness and value. 3. Long-term contract duration (over 3 years) suggests ongoing need. 4. Focus on Computer Facilities Management Services indicates critical infrastructure support.
Value Assessment
Rating: questionable
The contract value of $44.4M over 3 years for Microsoft Premier Services appears high, especially given the lack of competition. Benchmarking against similar sole-source Microsoft support contracts would be necessary to determine true value for money.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Microsoft Corporation. This limits price discovery and potentially leads to higher costs compared to a competitive environment.
Taxpayer Impact: Taxpayers may be overpaying due to the absence of competitive bidding for essential IT support services.
Public Impact
Essential IT infrastructure support for the Air Force, impacting operations. Potential for inflated costs due to lack of competitive pressure. Reliance on a single vendor for critical software and services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- High contract value
- Sole-source award
- Long contract duration
Positive Signals
- Provides critical IT services
- Firm fixed price contract
Sector Analysis
This contract falls within the IT sector, specifically for computer facilities management services. Spending benchmarks for similar government-wide Microsoft Premier Support agreements are often high, but the lack of competition here warrants scrutiny.
Small Business Impact
This contract was awarded directly to Microsoft Corporation and does not appear to have provisions for small business participation. The sole-source nature limits opportunities for small businesses to compete for these services.
Oversight & Accountability
The lack of competition and sole-source nature of this contract suggest a need for enhanced oversight to ensure fair pricing and value for taxpayer dollars. Future contract actions should explore competitive alternatives.
Related Government Programs
- Computer Facilities Management Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Potential for overpricing due to sole-source award.
- Lack of transparency in pricing and service delivery.
- Over-reliance on a single vendor for critical IT support.
- Limited opportunities for innovation from alternative providers.
Tags
computer-facilities-management-services, department-of-defense, wa, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $44.4 million to MICROSOFT CORPORATION. IGF::CT::IGF MICROSOFT PREMIER SERVICES
Who is the contractor on this award?
The obligated recipient is MICROSOFT CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $44.4 million.
What is the period of performance?
Start: 2013-06-30. End: 2016-11-30.
What is the justification for awarding this Microsoft Premier Services contract on a sole-source basis?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent requirements where only one vendor can meet the need. For Microsoft Premier Services, it often relates to the vendor's exclusive rights to provide support, updates, and specialized technical assistance for their software products. However, agencies are generally required to justify why a competitive process is not feasible or advantageous.
How does the lack of competition impact the overall risk profile of this contract?
The lack of competition significantly increases the risk profile. Without competitive bidding, there's a reduced incentive for the contractor to offer the best possible price, potentially leading to cost overruns and inefficient use of funds. It also limits the agency's ability to explore alternative solutions or vendors that might offer better value or innovation, increasing reliance risk on a single provider.
What measures can be taken to ensure the effectiveness and value of this sole-source contract?
To ensure effectiveness and value, the agency should conduct rigorous market research to identify potential future competitive opportunities. Robust performance monitoring, regular price reasonableness checks against industry benchmarks, and clear service level agreements are crucial. Engaging in strategic sourcing discussions with Microsoft to negotiate favorable terms and explore bundled solutions could also enhance value.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Facilities Management Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
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
Address: ONE MICROSOFT WAY, REDMOND, WA, 98052
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $64,380,495
Exercised Options: $44,372,206
Current Obligation: $44,372,206
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Timeline
Start Date: 2013-06-30
Current End Date: 2016-11-30
Potential End Date: 2016-11-30 00:00:00
Last Modified: 2016-08-02
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