GSA's Salesforce Enterprise License Agreement with Carahsoft Technology Corp. awarded $29M over 3 years

Contract Overview

Contract Amount: $29,071,059 ($29.1M)

Contractor: Carahsoft Technology Corp

Awarding Agency: General Services Administration

Start Date: 2016-08-01

End Date: 2019-07-31

Contract Duration: 1,094 days

Daily Burn Rate: $26.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGC::CT::IGC - SALESFORCE ENTERPRISE LICENSE AGREEMENT - GP1005161 - BASE YEAR

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20405

State: District of Columbia Government Spending

Plain-Language Summary

General Services Administration obligated $29.1 million to CARAHSOFT TECHNOLOGY CORP for work described as: IGC::CT::IGC - SALESFORCE ENTERPRISE LICENSE AGREEMENT - GP1005161 - BASE YEAR Key points: 1. Value for money appears fair given the enterprise-wide scope and duration, though specific usage metrics are not detailed. 2. Competition was full and open, suggesting a competitive pricing environment. 3. Risk indicators are low, with a firm fixed-price contract and a single delivery order. 4. Performance context is a standard enterprise software license, with no unusual performance requirements. 5. Sector positioning is within the IT Software Publishers category, a common area for federal procurement.

Value Assessment

Rating: fair

The contract value of approximately $29 million over three years for an enterprise-wide Salesforce license suggests a significant investment. Benchmarking against similar large-scale federal software procurements is challenging without detailed service level agreements or specific user counts. However, the firm fixed-price structure provides cost certainty for the government. The price per year averages around $9.7 million, which is substantial but potentially competitive for a comprehensive enterprise solution.

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 presence of a single delivery order under this award suggests that Carahsoft Technology Corp. was selected as the prime vendor through a competitive process. The level of competition is positive for price discovery, as it likely drove down costs compared to a sole-source award.

Taxpayer Impact: Full and open competition generally benefits taxpayers by ensuring that the government receives the best possible pricing through a robust bidding process.

Public Impact

Federal employees across various agencies benefit from access to Salesforce for customer relationship management and workflow automation. The services delivered include enterprise-wide licenses for Salesforce software, enabling data management and collaboration. The geographic impact is national, as GSA serves federal agencies across the United States. Workforce implications include enabling federal employees to utilize modern CRM tools, potentially increasing efficiency and productivity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with enterprise software solutions.
Reliance on a single vendor for critical enterprise software.
Ensuring ongoing cost-effectiveness as software needs evolve.

Positive Signals

Awarded through full and open competition, indicating competitive pricing.
Firm fixed-price contract provides cost certainty.
Standard enterprise software license with defined terms.

Sector Analysis

This contract falls within the Information Technology sector, specifically under Software Publishers (NAICS 511210). The federal government is a significant consumer of enterprise software, with substantial spending on Customer Relationship Management (CRM) systems like Salesforce. Comparable spending benchmarks would involve analyzing other large-scale enterprise software licenses procured by federal agencies, particularly those managed by GSA. The market for enterprise CRM solutions is competitive, with several major players vying for government contracts.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award to Carahsoft Technology Corp., a reseller, does not inherently exclude small business participation in the broader Salesforce ecosystem, but this specific contract does not appear to directly benefit small businesses through set-asides or mandated subcontracting.

Oversight & Accountability

The General Services Administration (GSA) is responsible for overseeing this contract. Oversight mechanisms would include contract performance monitoring, invoice review, and adherence to the terms and conditions of the firm fixed-price agreement. Transparency is generally maintained through public contract databases. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

GSA IT Schedule 70
Enterprise Software Licenses
Cloud Computing Services
Customer Relationship Management Systems

Risk Flags

Potential for cost overruns if usage or needs change significantly.
Reliance on a single vendor for critical enterprise functionality.
Need for ongoing assessment of software utilization and value.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $29.1 million to CARAHSOFT TECHNOLOGY CORP. IGC::CT::IGC - SALESFORCE ENTERPRISE LICENSE AGREEMENT - GP1005161 - BASE YEAR

Who is the contractor on this award?

The obligated recipient is CARAHSOFT TECHNOLOGY CORP.

Which agency awarded this contract?

Awarding agency: General Services Administration (Office of the Administrator).

What is the total obligated amount?

The obligated amount is $29.1 million.

What is the period of performance?

Start: 2016-08-01. End: 2019-07-31.

What is the track record of Carahsoft Technology Corp. as a federal contractor, particularly with large enterprise software agreements?

Carahsoft Technology Corp. is a prominent federal IT reseller with a long history of serving government agencies. They frequently partner with software manufacturers to provide solutions through various contract vehicles, including GSA Schedules. Their track record includes numerous large-scale awards for software licenses and related services across different agencies. While they are a reseller, their extensive experience in navigating federal procurement processes and managing complex software deployments suggests a capable partner for enterprise solutions. Analyzing their past performance on similar large contracts would provide further insight into their reliability and ability to manage such agreements effectively.

How does the pricing of this Salesforce enterprise license compare to similar contracts awarded by other federal agencies or state governments?

Direct price comparisons for enterprise software licenses are often difficult due to variations in license types, user counts, included modules, support levels, and contract durations. However, the average annual cost of approximately $9.7 million for this GSA contract can serve as a benchmark. To conduct a thorough comparison, one would need to identify contracts for comparable Salesforce editions (e.g., Enterprise Edition) or similar CRM platforms procured by other federal agencies or large state governments around the same period. Factors such as volume discounts, negotiated service level agreements, and the specific functionalities licensed would need to be accounted for to ensure a valid comparison and assess the value for money.

What are the primary risks associated with this type of enterprise software license agreement for the federal government?

The primary risks associated with this enterprise software license agreement include vendor lock-in, where the government becomes heavily reliant on a single provider, making future transitions costly and complex. There's also the risk of underutilization or overpayment if the software's capabilities are not fully leveraged or if the licensing model doesn't align with evolving needs. Cybersecurity risks are inherent with any cloud-based enterprise software, requiring robust security measures from both the vendor and the government. Furthermore, the long-term cost-effectiveness needs continuous evaluation, as software features and market prices evolve, potentially leading to opportunities for more economical solutions in the future.

What is the expected program effectiveness or return on investment (ROI) for the federal government utilizing Salesforce enterprise licenses?

The expected program effectiveness and ROI for the federal government utilizing Salesforce enterprise licenses are typically measured by improvements in constituent services, internal operational efficiency, and data-driven decision-making. Salesforce enables agencies to manage citizen interactions, track program progress, automate workflows, and gain insights from data. For example, agencies can use it to streamline application processing, improve communication with stakeholders, and enhance the delivery of public services. The ROI is realized through cost savings from increased productivity, reduced manual effort, better resource allocation, and potentially improved outcomes for government programs. Quantifying this ROI often involves tracking metrics related to process cycle times, user adoption rates, and the achievement of specific program goals.

What has been the historical spending pattern for Salesforce or similar CRM solutions by the General Services Administration or other federal agencies?

Historical spending on Salesforce and similar CRM solutions by the federal government, particularly through GSA, has shown a consistent upward trend over the past decade. Agencies increasingly rely on these platforms for managing constituent relationships, internal operations, and program management. GSA, as a major procurement facilitator, plays a key role in consolidating these needs. Spending patterns reflect a shift towards cloud-based solutions and enterprise-wide deployments to achieve economies of scale and standardization. Analyzing historical data from GSA's IT Schedule 70 and other relevant contract vehicles would reveal significant investments in CRM technologies, indicating their strategic importance to federal operations.

Are there any specific performance metrics or service level agreements (SLAs) associated with this Salesforce enterprise license that impact its value?

The provided data does not detail specific performance metrics or Service Level Agreements (SLAs) associated with this Salesforce enterprise license. Typically, enterprise software licenses, especially those procured through GSA, would include SLAs covering aspects like system uptime, response times for support, and data availability. The absence of this information in the summary makes a precise assessment of performance value challenging. However, for a large enterprise deployment, robust SLAs are crucial to ensure the reliability and availability of the platform, directly impacting its effectiveness and the government's return on investment. Without these details, it's assumed standard industry SLAs were negotiated or that performance is managed through broader GSA oversight.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

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

Address: 1860 MICHAEL FARADAY DR, SUITE 100, RESTON, VA, 20190

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $36,327,597

Exercised Options: $29,071,059

Current Obligation: $29,071,059

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS35F0119Y

IDV Type: FSS

Timeline