Air Force Awards $39M Microsoft Support Contract to Microsoft Corporation
Contract Overview
Contract Amount: $39,170,594 ($39.2M)
Contractor: Microsoft Corporation
Awarding Agency: Department of Defense
Start Date: 2024-04-26
End Date: 2025-04-28
Contract Duration: 367 days
Daily Burn Rate: $106.7K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: MICROSOFT UNIFIED SUPPORT FOR THE AIR FORCE INFORMATION NETWORK (AFIN).
Place of Performance
Location: MONTGOMERY, MONTGOMERY County, ALABAMA, 36114
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $39.2 million to MICROSOFT CORPORATION for work described as: MICROSOFT UNIFIED SUPPORT FOR THE AIR FORCE INFORMATION NETWORK (AFIN). Key points: 1. Significant contract value for IT support services. 2. Sole-source award to a major technology vendor. 3. Potential for limited competition and price discovery. 4. Focus on critical defense information network infrastructure.
Value Assessment
Rating: fair
The contract value of $39.2 million for one year of support appears high for a single vendor. Benchmarking against similar enterprise support agreements for large organizations is needed to assess value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Microsoft. This limits price discovery and may result in higher costs compared to a competitive process.
Taxpayer Impact: Taxpayers may be paying a premium due to the lack of competition for this essential IT support.
Public Impact
Ensures continued operation of the Air Force Information Network (AFIN). Supports critical defense communication and data systems. Impacts the technological readiness of the Air Force.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- High vendor concentration
- Potential for cost overruns
Positive Signals
- Ensures continuity of essential services
- Leverages existing vendor expertise
Sector Analysis
This contract falls within the IT services sector, specifically computer systems design. Defense IT spending is substantial, and support contracts are crucial for maintaining complex networks.
Small Business Impact
The contract was awarded directly to Microsoft Corporation and does not indicate any subcontracting opportunities for small businesses. This is typical for large, specialized software support agreements.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and effective service delivery. The Defense Information Systems Agency (DISA) is responsible for managing this contract.
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.
- Lack of small business participation.
- High reliance on a single vendor for critical infrastructure.
Tags
computer-systems-design-services, department-of-defense, al, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $39.2 million to MICROSOFT CORPORATION. MICROSOFT UNIFIED SUPPORT FOR THE AIR FORCE INFORMATION NETWORK (AFIN).
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 $39.2 million.
What is the period of performance?
Start: 2024-04-26. End: 2025-04-28.
What is the justification for the sole-source award, and were alternative competitive strategies considered?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs that cannot be met by other vendors. Agencies must document these reasons thoroughly. For this contract, the lack of competition suggests either a reliance on Microsoft's proprietary systems or a failure to explore competitive options, potentially leading to suboptimal pricing for the government.
How does the per-unit cost of this support compare to industry benchmarks for similar enterprise-level IT support contracts?
Without specific line-item details, a direct per-unit cost comparison is difficult. However, the total award of $39.2 million for one year of support for a major network suggests a significant investment. Benchmarking against similar large-scale enterprise support contracts, especially those awarded competitively, would be crucial to determine if this pricing is reasonable or inflated due to the sole-source nature.
What mechanisms are in place to ensure the effectiveness and value for money of Microsoft's support services under this contract?
Effectiveness is typically measured through service level agreements (SLAs) and performance metrics outlined in the contract. The Department of Defense and DISA should actively monitor these metrics and conduct regular performance reviews. Value for money is harder to assess with sole-source awards, but diligent oversight of service delivery and comparison to market rates for comparable services can help identify potential inefficiencies or overpricing.
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: $39,170,594
Exercised Options: $39,170,594
Current Obligation: $39,170,594
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HC102817D0001
IDV Type: IDC
Timeline
Start Date: 2024-04-26
Current End Date: 2025-04-28
Potential End Date: 2025-04-28 00:00:00
Last Modified: 2025-08-27
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