GSA's Cloud Hosted Enterprise Services contract awarded to Dell Federal Systems L.P. for over $369M

Contract Overview

Contract Amount: $369,236,637 ($369.2M)

Contractor: Dell Federal Systems L.P

Awarding Agency: General Services Administration

Start Date: 2017-06-22

End Date: 2022-06-21

Contract Duration: 1,825 days

Daily Burn Rate: $202.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF CLOUD HOSTED ENTERPRISE SERVICES (CHES)

Place of Performance

Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80914

State: Colorado Government Spending

Plain-Language Summary

General Services Administration obligated $369.2 million to DELL FEDERAL SYSTEMS L.P for work described as: IGF::OT::IGF CLOUD HOSTED ENTERPRISE SERVICES (CHES) Key points: 1. The contract represents a significant investment in cloud-hosted enterprise services, indicating a strategic shift towards scalable IT infrastructure. 2. Dell Federal Systems L.P. secured this large award, highlighting their established presence and capabilities in the federal IT services market. 3. The duration of the contract (5 years) suggests a long-term commitment to these services, implying a need for sustained performance and support. 4. The award value of over $369 million underscores the substantial scale and importance of cloud services for federal agencies. 5. Analysis of performance metrics and cost-effectiveness over the contract's life will be crucial for assessing its overall value. 6. The 'Other Computer Related Services' NAICS code suggests a broad scope of potential services beyond basic cloud hosting.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific service details and comparable contract data. The total award of over $369 million over five years averages to approximately $73.8 million annually. This figure needs to be compared against the market rates for similar comprehensive cloud-hosted enterprise services, considering the specific service level agreements and scope. Without more granular data on the services provided and their performance, a definitive value-for-money assessment is difficult. However, the scale of the award suggests a significant need and potential for economies of scale if managed effectively.

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 specific number of bidders is not provided, but the 'full and open' designation suggests a competitive process aimed at achieving the best value for the government. This type of competition generally leads to more favorable pricing and a wider range of innovative solutions being considered.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives down prices through market forces and encourages a broad base of contractors to vie for government business, potentially leading to cost savings.

Public Impact

Federal agencies utilizing General Services Administration (GSA) IT schedules benefit from access to cloud-hosted enterprise services, enhancing their operational capabilities. The services delivered likely support a wide range of government functions, from data storage and processing to application hosting and management. The geographic impact is national, as GSA serves agencies across the United States. This contract supports the federal IT workforce by requiring skilled personnel for the implementation, management, and maintenance of cloud services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if transition to another provider is complex or costly.
Ensuring consistent service quality and performance across all cloud-hosted services is critical.
Cybersecurity risks associated with cloud environments require robust and continuous monitoring.
The broad scope of 'Other Computer Related Services' could lead to scope creep if not managed tightly.

Positive Signals

Awarded through full and open competition, suggesting competitive pricing and a robust selection process.
The long contract duration implies a stable and reliable service provider.
Leveraging cloud services can offer scalability and flexibility for federal agencies.
GSA's involvement suggests adherence to established procurement standards and oversight.

Sector Analysis

The federal IT services market is a vast and dynamic sector, with cloud computing representing a significant and growing segment. Agencies are increasingly migrating services to the cloud to leverage benefits such as scalability, cost-efficiency, and enhanced disaster recovery. This contract falls within the broader category of IT professional services, specifically focusing on cloud-hosted enterprise solutions. Comparable spending benchmarks would involve analyzing other large-scale cloud service contracts awarded by GSA or other federal agencies, looking at per-user or per-gigabyte costs, and service level agreement adherence.

Small Business Impact

While this contract was awarded to Dell Federal Systems L.P., a large prime contractor, the implications for small businesses depend on subcontracting opportunities. Federal regulations often encourage prime contractors to utilize small businesses for a portion of their work. Analysis of the subcontracting plan, if available, would reveal the extent to which small businesses are expected to participate in delivering these cloud-hosted enterprise services. The absence of specific small business set-aside information suggests this was not a primary focus for the prime award itself.

Oversight & Accountability

Oversight for this contract would primarily fall under the purview of the General Services Administration (GSA), specifically the Federal Acquisition Service. GSA has established procurement regulations and contract management processes. Transparency is facilitated through contract award databases like FPDS. Accountability measures would be embedded in the contract's performance standards and Service Level Agreements (SLAs). The Inspector General's office for GSA would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

GSA IT Schedule 70
Cloud Computing Services
Enterprise IT Services
Data Center Consolidation

Risk Flags

Potential for cost overruns if scope is not tightly managed.
Risk of security breaches in cloud environments.
Dependency on a single vendor for critical enterprise services.
Ensuring long-term technological relevance of contracted services.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $369.2 million to DELL FEDERAL SYSTEMS L.P. IGF::OT::IGF CLOUD HOSTED ENTERPRISE SERVICES (CHES)

Who is the contractor on this award?

The obligated recipient is DELL FEDERAL SYSTEMS L.P.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $369.2 million.

What is the period of performance?

Start: 2017-06-22. End: 2022-06-21.

What specific cloud services are included under this contract, and what are the key performance indicators (KPIs) for Dell Federal Systems L.P.?

The provided data indicates the contract falls under NAICS code 541519 (Other Computer Related Services) and is for 'CLOUD HOSTED ENTERPRISE SERVICES (CHES)'. However, specific service details such as Infrastructure as a Service (IaaS), Platform as a Service (PaaS), or Software as a Service (SaaS) offerings are not detailed. Similarly, the key performance indicators (KPIs) and Service Level Agreements (SLAs) that Dell Federal Systems L.P. must adhere to are not specified in the summary data. These would typically include metrics related to uptime, latency, security incident response times, and data backup/recovery capabilities. A thorough review of the contract's Statement of Work (SOW) and associated SLAs would be necessary to fully understand the scope and performance expectations.

How does the average annual cost of this contract compare to similar large-scale federal cloud service contracts?

The contract's total award of $369,236,637.40 over 1825 days (5 years) equates to an average annual cost of approximately $73.85 million. Comparing this to similar large-scale federal cloud service contracts requires access to data on other major awards within the cloud computing space, such as those under GSA's Cloud IT Blanket Purchase Agreement (BPA) or other agency-specific cloud procurements. Factors like the specific services offered (e.g., IaaS vs. PaaS vs. SaaS), the level of support, security requirements, and the number of users or endpoints supported significantly influence pricing. Without direct comparable contract data, it's difficult to definitively state if this represents a competitive price point. However, the 'full and open competition' award mechanism suggests that market forces were intended to drive a reasonable price.

What is Dell Federal Systems L.P.'s track record with large federal IT service contracts, particularly in cloud hosting?

Dell Federal Systems L.P. has a significant history of serving the federal government with IT products and services. While specific details on their cloud hosting track record under this particular contract (CHES) are not provided in the summary data, Dell is a major player in the enterprise IT market, offering a wide range of cloud solutions. Their broader experience includes providing hardware, software, and managed services to various federal agencies. Assessing their track record would involve reviewing past performance evaluations, contract awards, and any reported issues or successes on similar large-scale federal IT contracts. Their established presence suggests a capacity to handle complex enterprise-level requirements.

What are the potential risks associated with a 5-year contract for cloud-hosted enterprise services, and what mitigation strategies are typically employed?

A 5-year contract for cloud-hosted enterprise services carries several potential risks. These include technological obsolescence, where the contracted services may become outdated before the contract ends; vendor lock-in, making it difficult and costly to switch providers; security vulnerabilities inherent in cloud environments; and potential performance degradation or service outages. Mitigation strategies typically involve clearly defined Service Level Agreements (SLAs) with penalties for non-performance, robust security clauses and requirements, provisions for technology refresh or upgrades, and carefully planned exit strategies to facilitate transitions to new providers if necessary. Regular performance reviews and ongoing communication between the government and the contractor are also crucial.

How has federal spending on cloud computing services evolved, and where does this contract fit within that trend?

Federal spending on cloud computing services has seen a dramatic increase over the past decade as agencies recognize the benefits of scalability, flexibility, and cost-efficiency compared to traditional on-premises infrastructure. The government has actively encouraged cloud adoption through initiatives like the Cloud First policy and subsequent strategies emphasizing secure cloud utilization. This contract, valued at over $369 million for cloud-hosted enterprise services, represents a substantial investment within this trend. It aligns with the broader federal objective of modernizing IT infrastructure and leveraging commercial cloud capabilities to improve service delivery and operational effectiveness across various agencies managed by GSA.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

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: 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: $1,370,595,613

Exercised Options: $1,370,321,897

Current Obligation: $369,236,637

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS00Q12AEA1007

IDV Type: BPA

Timeline