DoD's $44.5M Microsoft Premier Support Contract Raises Concerns Over Competition and Value
Contract Overview
Contract Amount: $44,509,450 ($44.5M)
Contractor: Microsoft Corporation
Awarding Agency: Department of Defense
Start Date: 2016-12-01
End Date: 2021-05-31
Contract Duration: 1,642 days
Daily Burn Rate: $27.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: IGF::CT::IGF MICROSOFT PREMIER SUPPORT SERVICES
Place of Performance
Location: REDMOND, KING County, WASHINGTON, 98052
Plain-Language Summary
Department of Defense obligated $44.5 million to MICROSOFT CORPORATION for work described as: IGF::CT::IGF MICROSOFT PREMIER SUPPORT SERVICES Key points: 1. Significant spending on a single vendor for essential IT support. 2. Lack of competition suggests potential for overpayment and limited innovation. 3. Long contract duration (over 4 years) may not reflect current market needs. 4. High cost for IT support services warrants scrutiny against benchmarks.
Value Assessment
Rating: questionable
The $44.5 million awarded for Microsoft Premier Support Services over nearly five years appears high, especially given the lack of competitive bidding. Benchmarking against similar enterprise support contracts would be necessary to determine if the pricing is reasonable.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, Microsoft Corporation, was considered. This significantly limits price discovery and potentially leads to higher costs for taxpayers as competition is absent.
Taxpayer Impact: The absence of competition for this substantial IT support contract likely results in higher costs for taxpayers than if multiple vendors had vied for the business.
Public Impact
Federal agencies rely heavily on vendor support for critical IT infrastructure. Sole-source contracts can stifle innovation and lock agencies into specific technologies. Taxpayers may be overpaying for essential software and IT services. Ensuring fair pricing for government IT procurement is a continuous challenge.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- High dollar value
- Long contract duration
- Lack of competition
Positive Signals
- Essential IT support provided
- Firm fixed price contract type
Sector Analysis
The IT services sector, particularly software and support, represents a significant portion of federal spending. Benchmarks for IT support services vary widely based on scope and vendor, but competitive procurement is generally expected to yield better value.
Small Business Impact
This contract was awarded directly to Microsoft Corporation and does not indicate any subcontracting opportunities for small businesses. The sole-source nature limits the potential for small business participation.
Oversight & Accountability
The sole-source award for a large IT support contract warrants review by oversight bodies to ensure the necessity and justification for not pursuing a competitive process, and to assess the value received.
Related Government Programs
- Computer Facilities Management Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competition
- Potential for overpayment
- Limited vendor options
- High contract value
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 $44.5 million to MICROSOFT CORPORATION. IGF::CT::IGF MICROSOFT PREMIER SUPPORT 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 $44.5 million.
What is the period of performance?
Start: 2016-12-01. End: 2021-05-31.
What was the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?
The justification for a sole-source award typically involves circumstances where only one responsible source can provide the required supplies or services. This could be due to proprietary technology, unique capabilities, or urgent needs where competition is not feasible. A thorough review would examine the specific documentation and rationale provided by the Department of the Air Force at the time of the award.
How does the per-unit cost of this support contract compare to industry benchmarks for similar Microsoft Premier Support agreements?
Without specific details on the services included (e.g., number of users, specific software versions, support levels), a precise per-unit cost comparison is difficult. However, given the sole-source nature and the significant total value, it is crucial to benchmark against comparable government or commercial contracts to identify potential overpricing or inefficiencies in the acquisition.
What measures were in place to ensure accountability and performance from Microsoft Corporation under this large, sole-source contract?
Accountability under a sole-source contract relies heavily on the contract's performance work statement (PWS), service level agreements (SLAs), and the government's contract administration. The Department of the Air Force would have been responsible for monitoring Microsoft's performance against these terms, conducting regular reviews, and ensuring that the services delivered met the specified requirements and objectives.
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: $44,509,450
Exercised Options: $44,509,450
Current Obligation: $44,509,450
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NOT OBTAINED - WAIVED
Timeline
Start Date: 2016-12-01
Current End Date: 2021-05-31
Potential End Date: 2021-05-31 00:00:00
Last Modified: 2025-04-22
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