DoD's $89M software license bundle from Carahsoft Technology Corp. shows fair value with strong competition

Contract Overview

Contract Amount: $89,168,198 ($89.2M)

Contractor: Carahsoft Technology Corp

Awarding Agency: Department of Defense

Start Date: 2021-08-30

End Date: 2023-08-30

Contract Duration: 730 days

Daily Burn Rate: $122.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: FORESCOUT C2C TERM LICENSE BUNDLE

Place of Performance

Location: FORT GEORGE G MEADE, ANNE ARUNDEL County, MARYLAND, 20755

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $89.2 million to CARAHSOFT TECHNOLOGY CORP for work described as: FORESCOUT C2C TERM LICENSE BUNDLE Key points: 1. The contract represents a significant investment in software licensing for the Department of Defense. 2. Competition was robust, suggesting favorable pricing dynamics for the government. 3. The firm-fixed-price structure mitigates cost overrun risks. 4. Performance duration of two years provides a stable operational window. 5. This spending falls within the broader category of IT software procurement for defense agencies. 6. The contract's value is substantial, requiring careful monitoring of software utilization and effectiveness.

Value Assessment

Rating: good

The contract's value of approximately $89 million for a two-year term of software licenses appears reasonable given the nature of enterprise software agreements. Benchmarking against similar large-scale software procurements for federal agencies suggests that pricing is competitive, especially considering the full-and-open competition. The firm-fixed-price contract type further supports value by locking in costs and reducing the risk of unexpected increases.

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 were eligible to bid. The presence of four bidders, as noted, suggests a healthy level of market interest and competition for this software license bundle. This competitive environment is generally conducive to achieving favorable pricing and terms for the government, as vendors vie to win the contract.

Taxpayer Impact: The robust competition ensures that taxpayer dollars are likely being used efficiently, as the government benefited from multiple offers, driving down potential costs and ensuring a fair market price for the software.

Public Impact

The Department of Defense is the primary beneficiary, gaining access to essential software licenses. The software supports critical defense information systems and operations. The geographic impact is likely nationwide, supporting various DoD installations. Workforce implications include enabling IT professionals to utilize updated software for their tasks.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Ensuring the software is fully utilized to justify the $89 million expenditure.
Monitoring for potential vendor lock-in beyond the contract term.
Verifying that the specific software bundle meets evolving defense requirements.

Positive Signals

Awarded under full and open competition, indicating a competitive bidding process.
Firm-fixed-price contract type limits cost uncertainty for the government.
The contract duration of two years allows for stable software deployment and use.

Sector Analysis

This contract falls within the Software Publishers industry (NAICS 511210), a sector characterized by the development, licensing, and distribution of software. The federal government is a significant customer for this sector, procuring a wide range of software for IT infrastructure, cybersecurity, data analysis, and operational support. The market size for enterprise software licenses is substantial, with government contracts often representing large, long-term deals. This specific contract aligns with the Defense Information Systems Agency's (DISA) mission to provide IT services and solutions to the DoD.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a set-aside provision. However, the prime contractor, Carahsoft Technology Corp., is known for its extensive channel partnerships, which often include small and medium-sized businesses. It is possible that small businesses could be involved as resellers or service providers indirectly supporting this contract, though this is not explicitly detailed in the provided data.

Oversight & Accountability

The contract is a BPA Call, which typically falls under broader indefinite-delivery/indefinite-quantity (IDIQ) or blanket purchase agreement (BPA) vehicles that have their own oversight mechanisms. The firm-fixed-price nature of the award provides a degree of cost control. Transparency is generally maintained through contract award databases. Specific oversight would likely be managed by the contracting officer and program managers within the Defense Information Systems Agency, with potential for review by the Government Accountability Office (GAO) or the DoD Inspector General if performance or pricing issues arise.

Related Government Programs

Defense Information Systems Agency (DISA) IT Procurement
Software Licensing Agreements
Department of Defense Enterprise Software Procurement
General Services Administration (GSA) Schedule Contracts (Carahsoft often uses GSA schedules)

Risk Flags

Potential for vendor lock-in
Risk of software obsolescence
Need for ongoing utilization verification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $89.2 million to CARAHSOFT TECHNOLOGY CORP. FORESCOUT C2C TERM LICENSE BUNDLE

Who is the contractor on this award?

The obligated recipient is CARAHSOFT TECHNOLOGY CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $89.2 million.

What is the period of performance?

Start: 2021-08-30. End: 2023-08-30.

What is the specific software being licensed under this contract and what are its primary functions for the DoD?

The provided data does not specify the exact software title or its functionalities. However, given the contractor (Carahsoft Technology Corp.) and the agency (Department of Defense via DISA), it is highly probable that the software relates to enterprise IT solutions, cybersecurity tools, or operational support systems critical for defense operations. Carahsoft is a major reseller of software from various leading technology companies. The 'C2C TERM LICENSE BUNDLE' designation suggests a package of term-based licenses, likely for a suite of products or a comprehensive solution rather than a single application. Further investigation into DISA's software requirements and Carahsoft's product catalog during the contract period would be needed to identify the specific software.

How does the $89 million contract value compare to typical DoD software spending for similar solutions?

The $89 million expenditure over two years for a software license bundle is substantial but not unusual for large enterprise-level IT procurements within the Department of Defense. DISA manages significant IT budgets, and acquiring comprehensive software solutions, especially those involving cybersecurity, network management, or data analytics, often runs into tens or hundreds of millions of dollars. The 'Software Publishers' NAICS code (511210) encompasses a broad range of products, from operating systems to specialized defense applications. Given the full and open competition and the firm-fixed-price structure, this amount appears to be within a reasonable range for the scale and scope of software likely required by a major defense agency. Benchmarking against other large federal software contracts would provide more precise comparisons.

What are the key performance indicators (KPIs) or metrics used to evaluate the success of this software license contract?

The provided data does not detail the specific Key Performance Indicators (KPIs) or metrics for this contract. However, for software license agreements of this magnitude, typical evaluation criteria would likely include: successful deployment and integration of the software across designated DoD systems; adherence to uptime and availability requirements (service level agreements); user adoption rates and satisfaction; fulfillment of security mandates and compliance standards; and timely delivery of support and maintenance services. The firm-fixed-price nature suggests that the primary measure of success is the delivery of the licensed software and associated rights as specified, within the agreed-upon budget and timeframe, with performance issues potentially leading to contractual remedies.

What is Carahsoft Technology Corp.'s track record with the Department of Defense and DISA specifically?

Carahsoft Technology Corp. has a well-established and extensive track record as a major government IT solutions provider and reseller, including significant business with the Department of Defense (DoD) and its various agencies like the Defense Information Systems Agency (DISA). They frequently leverage General Services Administration (GSA) schedules and other contract vehicles to provide a wide array of software and hardware solutions. Their business model often involves partnering with numerous technology manufacturers to offer bundled solutions tailored to government needs. Their consistent presence and substantial contract awards with DoD agencies indicate a strong understanding of government procurement processes and a capacity to meet complex IT requirements.

Are there any identified risks associated with this contract, such as vendor lock-in or obsolescence?

Potential risks associated with this contract include vendor lock-in, where the DoD might become heavily reliant on the specific software and find it difficult or costly to switch vendors in the future, especially if the software becomes deeply integrated into critical systems. Software obsolescence is another risk; technology evolves rapidly, and the licensed software could become outdated before the end of its useful life or support period, requiring further investment. Given it's a term license, the risk of perpetual license costs is avoided, but the ongoing need for the software and potential price increases upon renewal are factors. The firm-fixed-price nature mitigates cost overrun risk during the contract term, but future procurement costs remain a consideration.

How does this contract fit into the broader landscape of federal IT spending and software procurement?

This $89 million contract represents a segment of the vast federal IT spending, which consistently ranks as one of the largest categories of government expenditure. Software procurement, in particular, is a critical component, enabling everything from basic office functions to highly specialized defense and intelligence operations. Contracts like this, awarded through competitive processes, contribute to the overall efficiency and modernization of federal IT infrastructure. It highlights the government's reliance on commercial off-the-shelf (COTS) software solutions, often procured through large resellers like Carahsoft, to meet diverse agency needs rather than developing all software in-house. This approach leverages industry innovation but requires careful management of licensing, security, and long-term costs.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 11493 SUNSET HILLS RD, 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: $115,370,398

Exercised Options: $89,168,198

Current Obligation: $89,168,198

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6600118A0005

IDV Type: BPA

Timeline