DoD awards $31M to Microsoft for Defense Network Support, raising competition concerns
Contract Overview
Contract Amount: $31,085,727 ($31.1M)
Contractor: Microsoft Corporation
Awarding Agency: Department of Defense
Start Date: 2021-11-01
End Date: 2026-10-31
Contract Duration: 1,825 days
Daily Burn Rate: $17.0K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: MICROSOFT PREMIER SUPPORT AND MICROSOFT CONSULTING SERVICES FOR DODNET AND DISANET PROGRAM.
Place of Performance
Location: FORT GEORGE G MEADE, ANNE ARUNDEL County, MARYLAND, 20755
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $31.1 million to MICROSOFT CORPORATION for work described as: MICROSOFT PREMIER SUPPORT AND MICROSOFT CONSULTING SERVICES FOR DODNET AND DISANET PROGRAM. Key points: 1. Significant award to a single vendor for critical network infrastructure. 2. Lack of competition may lead to suboptimal pricing. 3. Potential for vendor lock-in and reduced flexibility. 4. IT services sector sees substantial government spending.
Value Assessment
Rating: questionable
The $31M award for Microsoft Premier Support and Consulting Services is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar contracts or alternative solutions.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source or limited competition award. This approach bypasses the standard procurement process, potentially limiting price discovery and negotiation leverage for the government.
Taxpayer Impact: The lack of competition means taxpayers may not be receiving the best possible price for these essential IT services.
Public Impact
Ensures continued operation of critical defense networks (DODNET and DISANET). Supports the Defense Information Systems Agency (DISA) mission. Potential for long-term reliance on Microsoft for these services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- Potential for overpayment
- Vendor lock-in
Positive Signals
- Ensures continuity of critical services
- Utilizes established vendor relationship
Sector Analysis
This contract falls within the IT services sector, specifically Computer Systems Design Services. Government spending in this area is consistently high, with significant portions allocated to software, hardware, and related support services.
Small Business Impact
This award was made directly to Microsoft Corporation and does not indicate any subcontracting opportunities for small businesses. The nature of the services and the vendor suggest limited direct involvement of small businesses.
Oversight & Accountability
The award was a delivery order under an existing contract, suggesting some level of prior oversight. However, the lack of competition for this specific order warrants further scrutiny regarding the justification for a sole-source approach.
Related Government Programs
- Computer Systems Design Services
- Department of Defense Contracting
- Defense Information Systems Agency Programs
Risk Flags
- Lack of competitive bidding
- Sole-source award justification
- Potential for inflated pricing
- Vendor lock-in risk
- Limited small business participation
Tags
computer-systems-design-services, department-of-defense, md, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $31.1 million to MICROSOFT CORPORATION. MICROSOFT PREMIER SUPPORT AND MICROSOFT CONSULTING SERVICES FOR DODNET AND DISANET PROGRAM.
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 $31.1 million.
What is the period of performance?
Start: 2021-11-01. End: 2026-10-31.
What was the justification for not competing this significant IT support contract?
The provided data indicates the contract was 'NOT COMPETED'. A thorough review would require access to the contract file to understand the specific justification, such as urgency, unique capabilities, or existing infrastructure compatibility, that led to a sole-source award.
How does the $31M cost compare to industry benchmarks for similar IT support and consulting services?
Without specific details on the scope of services, service levels, and duration, a direct cost comparison is challenging. However, for a five-year period, $31M for premier support and consulting for critical defense networks is substantial and warrants benchmarking against similar government and commercial contracts to ensure value.
What are the long-term risks associated with a sole-source award for critical network infrastructure support?
Long-term sole-source awards can lead to vendor lock-in, reduced innovation, and potentially higher costs over time as competition is eliminated. It also limits the government's ability to adapt to new technologies or seek more cost-effective solutions from other providers.
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: $34,133,689
Exercised Options: $33,406,851
Current Obligation: $31,085,727
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HC102817D0001
IDV Type: IDC
Timeline
Start Date: 2021-11-01
Current End Date: 2026-10-31
Potential End Date: 2026-10-31 00:00:00
Last Modified: 2026-01-14
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