DoD's $7.1M Microsoft contract for CRIMS V2.3 raises questions on competition and value

Contract Overview

Contract Amount: $7,108,401 ($7.1M)

Contractor: Microsoft Corporation

Awarding Agency: Department of Defense

Start Date: 2020-08-03

End Date: 2025-08-02

Contract Duration: 1,825 days

Daily Burn Rate: $3.9K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MICROSOFT CONSULTING SERVICES (MCS) FOR CASE REPORTING INFORMATION MANAGEMENT SYSTEM (CRIMS) VERSION 2.3 (V2.3) AND ADDITIONAL DEVELOPMENT REQUIREMENTS

Place of Performance

Location: ALEXANDRIA, ALEXANDRIA CITY County, VIRGINIA, 22350

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $7.1 million to MICROSOFT CORPORATION for work described as: MICROSOFT CONSULTING SERVICES (MCS) FOR CASE REPORTING INFORMATION MANAGEMENT SYSTEM (CRIMS) VERSION 2.3 (V2.3) AND ADDITIONAL DEVELOPMENT REQUIREMENTS Key points: 1. The contract's full and open competition status is unknown, potentially impacting price discovery. 2. Benchmarking against similar IT system development contracts is crucial for assessing value. 3. The fixed-price contract type shifts performance risk to the contractor. 4. The contract duration of five years suggests a long-term need for system maintenance and development. 5. The Defense Information Systems Agency (DISA) is the primary agency involved. 6. The contract is for Computer Systems Design Services, a common IT procurement category.

Value Assessment

Rating: fair

The contract value of $7.1 million over five years for IT system development and maintenance appears moderate for a federal contract of this nature. However, without specific details on the scope of work, deliverables, and the contractor's performance history on similar projects, a definitive value assessment is challenging. Benchmarking against other Computer Systems Design Services contracts awarded by DISA or other Department of Defense agencies for similar system development could provide a clearer picture of whether the pricing is competitive and represents good value for money. The fixed-price nature of the contract suggests that cost overruns are the contractor's responsibility, which can be a positive indicator if the scope is well-defined.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

The contract was awarded under the 'NOT COMPETED' category, which is a significant indicator. This suggests that the contract may have been awarded using a sole-source justification or under specific circumstances that limited competition. Without further details on the justification for not competing, it is difficult to assess the level of competition. If it was a sole-source award, it implies that only one vendor was deemed capable of meeting the requirements, which can lead to higher prices and reduced innovation. If it was a limited competition, the number of bidders and the evaluation process would be key factors.

Taxpayer Impact: When a contract is not competed, taxpayers may not benefit from the competitive pricing that typically drives down costs. This can result in the government paying more than it would in a fully competitive environment.

Public Impact

The primary beneficiaries are the Department of Defense personnel who will utilize the Case Reporting Information Management System (CRIMS) V2.3. The contract delivers continued development, maintenance, and support for a critical information management system. The geographic impact is likely within the Department of Defense's operational areas, primarily supporting military and civilian personnel. Workforce implications include the potential for continued employment for Microsoft's consulting services team and internal DoD IT staff managing the system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of transparency regarding the 'NOT COMPETED' justification.
Potential for inflated costs due to limited or no competition.
Risk of vendor lock-in if the system is highly specialized.
Dependency on a single vendor for critical system updates and maintenance.

Positive Signals

Fixed-price contract shifts cost risk to the contractor.
Microsoft is a well-established technology provider with extensive resources.
The contract duration indicates a commitment to system stability and ongoing support.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically in computer systems design and related services. The federal IT market is vast, with agencies consistently investing in software development, system integration, and maintenance to support their missions. Comparable spending benchmarks for similar IT system development and maintenance contracts within the DoD or other federal agencies can range from hundreds of thousands to tens of millions of dollars, depending on complexity and duration. Microsoft's role as a major technology provider positions them as a significant player in this market segment.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a small business set-aside. The prime contractor, Microsoft Corporation, is a large business. Any subcontracting opportunities would be at the discretion of the prime contractor and not mandated by a set-aside requirement.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Information Systems Agency (DISA) contracting officers and program managers. Accountability measures would be defined in the contract's statement of work and performance standards. Transparency is often limited for 'NOT COMPETED' awards, but contract award details are usually published on federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Defense Information Systems Agency IT Services
Department of Defense Software Development Contracts
Case Management Information Systems
Federal IT Modernization Programs

Risk Flags

Lack of Competition
Potential for Overpricing
Limited Transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $7.1 million to MICROSOFT CORPORATION. MICROSOFT CONSULTING SERVICES (MCS) FOR CASE REPORTING INFORMATION MANAGEMENT SYSTEM (CRIMS) VERSION 2.3 (V2.3) AND ADDITIONAL DEVELOPMENT REQUIREMENTS

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 $7.1 million.

What is the period of performance?

Start: 2020-08-03. End: 2025-08-02.

What was the specific justification for awarding this contract on a 'NOT COMPETED' basis?

The provided data indicates the contract was 'NOT COMPETED'. A detailed justification for this procurement approach would typically be documented by the agency (Defense Information Systems Agency) and may involve reasons such as the existence of only one responsible source, urgent and compelling needs, or specific program requirements that only one contractor can meet. Without access to the agency's justification documentation, the precise reason remains unknown. This lack of competition is a key area for further investigation, as it can significantly impact pricing and value for the government.

How does the $7.1 million contract value compare to similar IT system development contracts awarded by DISA or the DoD?

Benchmarking the $7.1 million contract value requires comparing it to similar IT system development and maintenance contracts awarded by the Defense Information Systems Agency (DISA) or the broader Department of Defense (DoD). Factors such as contract duration (5 years), scope of work (CRIMS V2.3 development and additional requirements), and contract type (Firm Fixed Price) are crucial for a meaningful comparison. Contracts for complex system development can vary widely. For instance, a contract for a new, large-scale enterprise resource planning system might cost tens or hundreds of millions, while a contract for maintaining an existing, less complex system might be in the low millions. Without specific details on the CRIMS V2.3 system's complexity and the exact deliverables, a precise comparison is difficult, but $7.1 million over five years suggests a moderate investment for ongoing system support and development.

What are the potential risks associated with awarding a contract on a 'NOT COMPETED' basis for IT services?

Awarding IT services on a 'NOT COMPETED' basis carries several potential risks for the government. Primarily, it can lead to a lack of price competition, potentially resulting in the government paying higher prices than if the contract had been competed. This can reduce the overall value for money. Additionally, limited competition may reduce the incentive for the contractor to innovate or provide the highest level of service, as alternative options are not readily available to the government. There's also a risk of vendor lock-in, where the government becomes heavily reliant on a single provider, making it difficult and costly to switch vendors in the future. Transparency can also be a concern, as the justification for not competing may not always be fully transparent to the public or even within the agency.

What is the track record of Microsoft Corporation in delivering similar IT system development and maintenance contracts for the federal government?

Microsoft Corporation is a major technology provider with a long history of contracts with the U.S. federal government, including the Department of Defense. They are known for providing a wide range of IT services, including software development, cloud solutions, and system integration. Their track record generally includes delivering complex solutions across various agencies. However, the specific performance history for contracts involving custom system development like the Case Reporting Information Management System (CRIMS) V2.3, especially when awarded on a non-competitive basis, would require a deeper dive into contract performance reports and past performance evaluations. While Microsoft is a reputable company, the success of any specific contract depends on the detailed requirements, project management, and execution.

How does the duration of this contract (5 years) align with typical federal IT system development and maintenance lifecycles?

A five-year duration for an IT system development and maintenance contract is relatively common within the federal government. Many federal IT systems require ongoing support, updates, and enhancements over extended periods to remain effective and secure. This duration allows for a stable period of development and maintenance, providing continuity for the agency's operations. It also aligns with typical budget cycles and strategic planning horizons for federal agencies. While initial development might be shorter, the maintenance and evolution phase often spans several years. The fixed-price nature of this contract over five years suggests a defined scope of work for that period, aiming to control costs for a predictable timeframe.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

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: $7,108,401

Exercised Options: $7,108,401

Current Obligation: $7,108,401

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC102817D0001

IDV Type: IDC

Timeline