DoD's $282M Microsoft JELA III AF Enterprise Licenses SA with Dell Federal Systems L.P. raises value concerns
Contract Overview
Contract Amount: $282,253,286 ($282.3M)
Contractor: Dell Federal Systems L.P
Awarding Agency: Department of Defense
Start Date: 2019-11-19
End Date: 2022-10-31
Contract Duration: 1,077 days
Daily Burn Rate: $262.1K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: MICROSOFT JELA III AF ENTERPRISE LICENSES SA
Place of Performance
Location: ROUND ROCK, WILLIAMSON County, TEXAS, 78682
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $282.3 million to DELL FEDERAL SYSTEMS L.P for work described as: MICROSOFT JELA III AF ENTERPRISE LICENSES SA Key points: 1. Significant spending on enterprise licenses highlights reliance on specific vendors. 2. Competition method (Full and Open) is positive, but contract vehicle (BPA Call) may limit price discovery. 3. Risk of vendor lock-in and potential for overspending on software licenses. 4. Sector context: IT spending is crucial for defense modernization, but efficiency is key.
Value Assessment
Rating: questionable
The contract value of $282M for enterprise licenses is substantial. Benchmarking against similar large-scale enterprise software agreements is difficult without detailed scope, but the lack of specific performance metrics or cost-saving targets suggests potential for overvaluation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is a positive sign for price discovery. However, the use of a BPA Call as the award mechanism might indicate a less rigorous price negotiation compared to a standalone competitive bid.
Taxpayer Impact: Taxpayer funds are utilized for this significant software expenditure. While competition was present, the overall value and necessity of these specific licenses at this price point warrant scrutiny to ensure optimal use of public funds.
Public Impact
Ensures operational capability for Air Force personnel through necessary software. Potential for cost savings if licenses are optimized and not over-provisioned. Transparency in spending is crucial for public trust in defense procurement. Impact on IT infrastructure and cybersecurity posture.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- High contract value for software licenses.
- Potential for vendor lock-in.
- Limited transparency on specific license utilization.
- BPA Call award mechanism may not ensure best price.
Positive Signals
- Full and open competition was utilized.
- Firm fixed price contract type provides cost certainty.
- Contract supports critical Air Force operations.
Sector Analysis
The Department of Defense, particularly the Air Force, relies heavily on IT infrastructure. Spending on enterprise licenses like this is common but represents a significant portion of the IT budget. Benchmarks for similar large-scale enterprise software procurements vary widely based on scope and vendor.
Small Business Impact
This contract was awarded to Dell Federal Systems L.P., a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award, which is common for large enterprise IT procurements.
Oversight & Accountability
Oversight is critical for large IT contracts. The Department of Defense should ensure robust monitoring of license usage, vendor performance, and adherence to contract terms to prevent waste and ensure value for money. Regular audits and reviews are essential.
Related Government Programs
- Other Computer Related Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- High dollar value.
- Potential for vendor lock-in.
- Reliance on a single software provider.
- Lack of detailed usage metrics.
- BPA Call award mechanism.
Tags
other-computer-related-services, department-of-defense, tx, bpa-call, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $282.3 million to DELL FEDERAL SYSTEMS L.P. MICROSOFT JELA III AF ENTERPRISE LICENSES SA
Who is the contractor on this award?
The obligated recipient is DELL FEDERAL SYSTEMS L.P.
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 $282.3 million.
What is the period of performance?
Start: 2019-11-19. End: 2022-10-31.
What is the specific breakdown of software licenses procured and their intended use to justify the $282M expenditure?
A detailed breakdown of the specific Microsoft software licenses (e.g., Windows, Office, server licenses) and their intended deployment across the Air Force is necessary. Understanding the user base, required functionalities, and duration of need would help ascertain if the $282M represents fair market value and avoids over-provisioning or purchasing unnecessary software.
How does the Air Force mitigate the risk of vendor lock-in and ensure competitive pricing for future software renewals or replacements?
Mitigation strategies include actively seeking alternative software solutions, negotiating favorable terms for future renewals, and maintaining a clear understanding of exit strategies. The Air Force should continuously assess the market for competing products and engage in proactive contract management to prevent over-reliance on a single vendor and ensure competitive pricing.
What metrics are in place to measure the effectiveness and efficiency of these enterprise licenses in supporting Air Force operations?
Effectiveness can be measured by tracking software uptime, user adoption rates, reduction in support tickets related to software issues, and alignment with mission objectives. Efficiency metrics could include cost per user, utilization rates of advanced features, and comparison against industry best practices for software deployment and management.
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: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Dell Technologies Inc.
Address: 1 DELL WAY, ROUND ROCK, TX, 78682
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $292,990,040
Exercised Options: $282,253,286
Current Obligation: $282,253,286
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HC108420A0003
IDV Type: BPA
Timeline
Start Date: 2019-11-19
Current End Date: 2022-10-31
Potential End Date: 2022-10-31 00:00:00
Last Modified: 2024-09-06
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