DoD's $20.25M Microsoft Premier Support Contract Raises Concerns Over Competition and Value
Contract Overview
Contract Amount: $20,254,666 ($20.3M)
Contractor: Microsoft Corporation
Awarding Agency: Department of Defense
Start Date: 2012-09-29
End Date: 2017-09-28
Contract Duration: 1,825 days
Daily Burn Rate: $11.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: MICROSOFT PREMIER SUPPORT SERVICES
Place of Performance
Location: ALEXANDRIA, ALEXANDRIA CITY County, VIRGINIA, 22350
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $20.3 million to MICROSOFT CORPORATION for work described as: MICROSOFT PREMIER SUPPORT SERVICES Key points: 1. Significant spending on IT support services for the Department of Defense. 2. Sole-source award to Microsoft Corporation limits competitive pricing. 3. Long contract duration (5 years) may not reflect current market rates. 4. High cost for IT support services warrants further scrutiny.
Value Assessment
Rating: questionable
The $20.25M awarded for Microsoft Premier Support Services over five years appears high, especially given the lack of competition. Benchmarking against similar IT support contracts, particularly those with competitive bidding, would be necessary to determine fair pricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis to Microsoft Corporation, indicating a lack of competitive bidding. This significantly limits price discovery and may result in a higher cost to the government than if the contract had been competed.
Taxpayer Impact: The absence of competition likely results in a higher cost for taxpayers, as the government did not leverage market forces to secure the best possible price for these essential IT support services.
Public Impact
Taxpayers may be overpaying for IT support due to the sole-source award. The long-term reliance on a single vendor for critical support could pose risks. Lack of transparency in pricing due to non-competitive nature.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- High contract value
- Long contract duration
- Lack of competition
Positive Signals
- Essential IT support services provided
- Established vendor relationship
Sector Analysis
This contract falls under Computer Systems Design Services, a broad category within the IT sector. Spending benchmarks for IT support services vary widely, but sole-source contracts often exceed market rates, making direct comparison difficult without further analysis.
Small Business Impact
The contract was awarded to Microsoft Corporation, a large business. There is no indication that small businesses were involved in providing these services, nor was there an effort to set aside portions of the contract for small business participation.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the services provided are necessary and the pricing, while not competed, is reasonable. Further review by the agency's oversight bodies is recommended.
Related Government Programs
- Computer Systems Design Services
- Department of Defense Contracting
- Defense Information Systems Agency Programs
Risk Flags
- Sole-source award limits price competition.
- Potential for overpayment due to lack of competitive bidding.
- Long contract duration may not reflect current market value.
- Lack of small business participation.
Tags
computer-systems-design-services, department-of-defense, va, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $20.3 million to MICROSOFT CORPORATION. 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 (Defense Information Systems Agency).
What is the total obligated amount?
The obligated amount is $20.3 million.
What is the period of performance?
Start: 2012-09-29. End: 2017-09-28.
What is the justification for awarding this contract on a sole-source basis to Microsoft, and were alternative solutions or competitive approaches considered?
The provided data indicates a sole-source award, suggesting that competitive alternatives were likely not pursued or deemed feasible by the contracting agency. A thorough review would require access to the contract file to understand the specific justifications, such as unique capabilities or urgent requirements, that led to this procurement approach.
How does the per-unit cost of these Microsoft Premier Support Services compare to industry benchmarks for similar IT support contracts, especially those awarded competitively?
Without specific details on the services included and their breakdown, a direct per-unit cost comparison is challenging. However, given the sole-source nature, it is probable that the cost is higher than what might be achieved through a competitive bidding process. Benchmarking against similar government or commercial contracts awarded competitively would be essential.
What is the potential financial impact on taxpayers due to the lack of competition in this $20.25M contract?
The lack of competition inherently limits the government's ability to negotiate the lowest possible price. Taxpayers likely bear a higher cost than if the contract had been subject to a competitive bidding process. Quantifying this impact would require a detailed cost-benefit analysis and comparison with potential competitive bids.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design 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
Solicitation ID: HC102812R0091
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: $20,254,666
Exercised Options: $20,254,666
Current Obligation: $20,254,666
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Timeline
Start Date: 2012-09-29
Current End Date: 2017-09-28
Potential End Date: 2017-09-28 00:00:00
Last Modified: 2019-09-10
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