DoD Awards $39.2M Microsoft Consulting Services Contract to Microsoft Corporation

Contract Overview

Contract Amount: $39,229,397 ($39.2M)

Contractor: Microsoft Corporation

Awarding Agency: Department of Defense

Start Date: 2024-06-28

End Date: 2026-06-27

Contract Duration: 729 days

Daily Burn Rate: $53.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: NETCOM, ARCYBER, USARC MICROSOFT CONSULTING SERVICES

Place of Performance

Location: FORT HUACHUCA, COCHISE County, ARIZONA, 85613

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $39.2 million to MICROSOFT CORPORATION for work described as: NETCOM, ARCYBER, USARC MICROSOFT CONSULTING SERVICES Key points: 1. Significant award to a single vendor for specialized IT services. 2. Lack of competition raises questions about potential overspending. 3. Contract duration of two years suggests ongoing IT support needs. 4. Focus on computer systems design highlights critical infrastructure reliance.

Value Assessment

Rating: questionable

The contract value of $39.2 million for two years of Microsoft consulting services appears high, especially given the sole-source nature. Without competitive bidding, it's difficult to benchmark against similar contracts for equivalent services.

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 limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for these consulting services.

Public Impact

Ensures continued IT support for critical defense networks. Potential for increased costs due to lack of competitive bidding. Reliance on a single vendor for specialized services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
High contract value
Lack of competition

Positive Signals

Addresses critical IT needs
Long-term support

Sector Analysis

This contract falls within the IT sector, specifically computer systems design services. Spending in this area is crucial for modern defense operations, but competitive procurement is vital to ensure cost-effectiveness.

Small Business Impact

This contract does not appear to involve small businesses, as it is a sole-source award to a large corporation. Opportunities for small business participation are likely limited.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure the services provided are necessary and priced appropriately. Transparency in the justification for not competing is essential.

Related Government Programs

Computer Systems Design Services
Department of Defense Contracting
Defense Information Systems Agency Programs

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for inflated pricing
Limited small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.2 million to MICROSOFT CORPORATION. NETCOM, ARCYBER, USARC MICROSOFT CONSULTING SERVICES

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: 2024-06-28. End: 2026-06-27.

What is the justification for awarding this contract on a sole-source basis?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent requirements where only one vendor can meet the need. Without specific details, it's difficult to assess if these criteria were met, but it's a key area for oversight to ensure taxpayer funds are used efficiently and that competition was only bypassed when absolutely necessary.

What are the risks associated with relying solely on Microsoft for these consulting services?

The primary risks include potential cost overruns due to the lack of competitive pricing, vendor lock-in, and a reduced ability to leverage alternative solutions or innovations from other providers. Dependence on a single vendor can also create vulnerabilities if that vendor experiences issues or changes its service offerings significantly.

How will the effectiveness of these consulting services be measured and ensured?

Effectiveness is typically measured through performance metrics outlined in the contract, such as timely delivery of services, achievement of project milestones, and client satisfaction. Regular reviews and reporting by the Defense Information Systems Agency (DISA) are crucial to monitor progress and ensure the services align with ARCYBER and USARC's operational requirements.

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: $42,467,791

Exercised Options: $42,467,791

Current Obligation: $39,229,397

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC102817D0001

IDV Type: IDC

Timeline