DoD's $34.4M Microsoft Consulting Services Contract Awarded to Microsoft Corporation
Contract Overview
Contract Amount: $34,404,941 ($34.4M)
Contractor: Microsoft Corporation
Awarding Agency: Department of Defense
Start Date: 2018-10-01
End Date: 2023-04-30
Contract Duration: 1,672 days
Daily Burn Rate: $20.6K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: MICROSOFT CONSULTING SERVICE - LABOR
Place of Performance
Location: NAVAL ANACOST ANNEX, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20373
Plain-Language Summary
Department of Defense obligated $34.4 million to MICROSOFT CORPORATION for work described as: MICROSOFT CONSULTING SERVICE - LABOR Key points: 1. Significant spending on IT consulting services for the Defense Information Systems Agency. 2. Sole-source award to Microsoft Corporation raises questions about competition and potential cost savings. 3. Contract duration of nearly 4 years suggests a substantial, ongoing need for these services. 4. The $34.4M value represents a considerable investment in IT support for defense operations.
Value Assessment
Rating: questionable
The contract's firm fixed price structure provides some cost certainty. However, without competitive bidding, it's difficult to assess if the $34.4M represents a fair market price compared to similar consulting services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Microsoft Corporation. This lack of competition limits price discovery and may result in higher costs for taxpayers.
Taxpayer Impact: The absence of competition likely means taxpayers are paying a premium for these consulting services, as there was no market pressure to drive down costs.
Public Impact
Taxpayers may be overpaying for IT consulting due to the lack of competitive bidding. The reliance on a single vendor for critical IT consulting services could pose a long-term risk. Defense operations may be impacted if the services provided do not meet cost-effectiveness standards.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for overpayment
Positive Signals
- Firm fixed price contract
Sector Analysis
This contract falls under Computer Systems Design Services, a significant sector within IT spending. Benchmarks for similar government contracts in this area are often driven by competitive bidding, making this sole-source award an outlier.
Small Business Impact
The contract was awarded directly to Microsoft Corporation and there is no indication of subcontracting to small businesses. This represents a missed opportunity for small business participation in federal IT contracts.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the services are necessary, effectively delivered, and priced reasonably, despite the lack of competition.
Related Government Programs
- Computer Systems Design Services
- Department of Defense Contracting
- Defense Information Systems Agency Programs
Risk Flags
- Sole-source award limits competition.
- Potential for inflated pricing due to lack of competitive bidding.
- No clear indication of small business participation.
- Long contract duration increases risk of vendor lock-in.
- Effectiveness and value assessment is challenging without benchmarks.
Tags
computer-systems-design-services, department-of-defense, dc, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $34.4 million to MICROSOFT CORPORATION. MICROSOFT CONSULTING SERVICE - LABOR
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 $34.4 million.
What is the period of performance?
Start: 2018-10-01. End: 2023-04-30.
What is the justification for awarding this contract solely to Microsoft Corporation without competition?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs that only a specific vendor can meet. Without further documentation, it's unclear if these criteria were met, raising concerns about whether alternative solutions or vendors were adequately considered.
What is the risk associated with relying on a single vendor for critical IT consulting services over a nearly four-year period?
The primary risk is vendor lock-in and a lack of flexibility. If Microsoft's services become inadequate or excessively expensive, switching vendors could be difficult and costly. This also limits the government's ability to leverage innovation from a broader market.
How can the effectiveness and value of these consulting services be independently verified without competitive benchmarks?
Effectiveness can be assessed through performance metrics, user feedback, and independent audits of deliverables. Value is harder to gauge without competition, but can be approximated by comparing the scope of work and outcomes to industry standards and publicly available pricing for similar, non-government engagements.
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: HC102816R0024
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: $34,404,941
Exercised Options: $34,404,941
Current Obligation: $34,404,941
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HC102817D0001
IDV Type: IDC
Timeline
Start Date: 2018-10-01
Current End Date: 2023-04-30
Potential End Date: 2023-04-30 00:00:00
Last Modified: 2024-05-28
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