DoD Spends $28.9M on Microsoft Support Services via Non-Competitive Contract
Contract Overview
Contract Amount: $28,915,417 ($28.9M)
Contractor: Microsoft Corporation
Awarding Agency: Department of Defense
Start Date: 2022-09-29
End Date: 2026-09-28
Contract Duration: 1,460 days
Daily Burn Rate: $19.8K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: MICROSOFT CONSULTING SERVICES AND MICROSOFT UNIFIED SUPPORT SERVICES FOR DODIG
Place of Performance
Location: ALEXANDRIA, ALEXANDRIA CITY County, VIRGINIA, 22350
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $28.9 million to MICROSOFT CORPORATION for work described as: MICROSOFT CONSULTING SERVICES AND MICROSOFT UNIFIED SUPPORT SERVICES FOR DODIG Key points: 1. Significant spending on essential IT support services for the Department of Defense. 2. Sole reliance on Microsoft Corporation for these critical services raises competition concerns. 3. The contract's duration and fixed-price nature present potential risks for cost overruns. 4. This spending falls within the broad category of Computer Systems Design Services.
Value Assessment
Rating: questionable
The $28.9 million contract for Microsoft consulting and support services is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar enterprise support contracts.
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 potentially leads to higher costs for the government.
Taxpayer Impact: Taxpayers may be overpaying due to the absence of competitive pressure on pricing for these essential IT services.
Public Impact
Ensures continued operation of critical Department of Defense IT systems. Potential for vendor lock-in with Microsoft's proprietary software and services. Lack of competition could stifle innovation and limit alternative solutions.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for price inflation
Positive Signals
- Essential IT support for defense
- Fixed-price contract structure
Sector Analysis
This contract falls under IT services, specifically computer systems design and support. Benchmarks for similar enterprise-level support contracts with major vendors are often high, but the lack of competition here makes direct comparison difficult.
Small Business Impact
This contract does not appear to involve small businesses, as it is a direct award to Microsoft Corporation. There is no indication of subcontracting opportunities for small businesses within this agreement.
Oversight & Accountability
The contract was awarded via a delivery order under an existing agreement, suggesting some level of prior oversight. However, the sole-source nature warrants scrutiny to ensure the pricing remains justified throughout the contract's life.
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.
- Risk of vendor lock-in.
- Lack of transparency in price justification.
- Long contract duration increases exposure to price changes.
Tags
computer-systems-design-services, department-of-defense, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $28.9 million to MICROSOFT CORPORATION. MICROSOFT CONSULTING SERVICES AND MICROSOFT UNIFIED SUPPORT SERVICES FOR DODIG
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 $28.9 million.
What is the period of performance?
Start: 2022-09-29. End: 2026-09-28.
What is the justification for awarding this contract as sole-source to Microsoft?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent requirements that only one vendor can meet. Without further documentation, it's unclear if these criteria were met, or if alternative solutions were adequately explored before committing to Microsoft exclusively.
What are the risks associated with a sole-source IT support contract of this magnitude?
The primary risks include inflated pricing due to lack of competition, vendor lock-in limiting future flexibility, and potential for reduced service quality if the vendor faces no competitive pressure. There's also a risk that the government becomes overly dependent on a single provider, hindering strategic IT modernization efforts.
How can the government ensure value for money on this contract moving forward?
The Defense Information Systems Agency should actively monitor service delivery and performance metrics. Regular price analysis, benchmarking against industry standards, and exploring opportunities for competitive re-solicitation upon contract expiration are crucial. Engaging with Microsoft to understand potential cost-saving measures or alternative support models could also yield value.
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: $28,915,417
Exercised Options: $28,915,417
Current Obligation: $28,915,417
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HC102817D0001
IDV Type: IDC
Timeline
Start Date: 2022-09-29
Current End Date: 2026-09-28
Potential End Date: 2026-09-28 00:00:00
Last Modified: 2025-09-19
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