Air Force's $23.6M cloud transition contract awarded to Dell Federal Systems L.P. for IT services

Contract Overview

Contract Amount: $23,599,282 ($23.6M)

Contractor: Dell Federal Systems L.P

Awarding Agency: Department of Defense

Start Date: 2015-06-19

End Date: 2017-09-21

Contract Duration: 825 days

Daily Burn Rate: $28.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CT::IGF THE UNITED STATES AIR FORCE (USAF) IS PURSUING THE ACQUISITION OF UNIFIED CAPABILITIES (UC) TO SATISFY DEPARTMENT OF DEFENSE USER NEEDS FOR CATEGORIZED INFORMATION (PER DOD CLOUD SECURITY MODEL (CSM)) COMMUNICATION, EMAIL, COLLABORATION SERVICES, OFFICE PRODUCTIVITY AND RECORDS MANAGEMENT AS SOFTWARE AS A SERVICE (SAAS) FROM A COMMERCIAL PROVIDER OF CLOUD COMPUTING SERVICES. THE PRIMARY GOAL OF THIS ACQUISITION IS TO EXPLORE SOLUTION AND SERVICES NECESSARY FOR USAF TO TRANSITION THEIR UNCLASSIFIED INFORMATION TECHNOLOGY SERVICES TO THE CLOUD WHICH WILL RESULT IN IMPROVEMENTS IN EFFICIENCY, AGILITY, INNOVATION, AND POTENTIAL COST SAVINGS. THE GOVERNMENT BELIEVES THAT TRADITIONAL OUTSOURCING AND SYSTEM INTEGRATION SUPPORT IS INSUFFICIENTLY ADAPTIVE AND COSTLY AND SHOULD BE REPLACED BY COMMODITY SERVICES WITH A SAAS CLOUD COMPUTING OFFERING. USAF IS ALSO INTERESTED IN DEVELOPING THE CAPABILITY TO SUPPORT CLASSIFIED, CSM LEVEL 6 INFORMATION AS AN OPTION. THE CUSTOMER COMMAND VISION, ALIGNED WITH THE DOD CIO GOAL FOR CLOUD COMPUTING, IS TO PROVIDE THE MOST INNOVA-TIVE AND EFFICIENT SOLUTION FOR UNCLASSIFIED COLLABORATION AND BUSINESS SYSTEMS. THE CONCEPT WOULD INCLUDE A MOBILE DEVICE, THIN CLIENT DEVICE OR VIRTUAL DESKTOP, THE ABSOLUTE MINIMUM INTERNAL INFRA-STRUCTURE (E.G.: WIRE, SWITCHES AND ROUTERS IN THE BUILDING) WITH ALL OTHER NETWORK SERVICES BEING PROVIDED AS A COMMOD-ITY. THIS CONCEPT IS BASED FULLY ON THE PREMISE THAT THE SELECTION OF THE COMMODITY PROVIDER IS A SELECTION OF EXISTING BUSINESS SYSTEM TOOLS RATHER THAN CONTRACTING THE VENDOR TO BUILD A ONE-OFF SOLUTION. AN ESSENTIAL ELEMENT OF SUCH A DELIVERY IS THE AVAILABILITY OF THE NECESSARY ONLINE TOOLS TO EFFECTIVELY EXECUTE THE CONCEPT. IT IS THE INTENT TO DELIVER SERVICES FROM THE PROVIDER S DATA CENTERS WITH TRAFFIC ROUTED OVER GOVERNMENT-PROVISIONED AND OPERATED MILITARY CIRCUITS (NIPRNET). THE CONTRACTOR SHALL ENABLE SUCCESSFUL SATISFACTION OF ALL REQUIRED FEDRAMP, DOD CLOUD SECURITY MODEL (V2.1 OR LATEST) AND DOD SECURITY CONTROL REQUIREMENTS IN ORDER TO ACHIEVE AND MAINTAIN AUTHORITY TO OPERATE ATO AT THE HIGH-HIGH-X SYSTEM LEVEL (PER CNSSI 1253 AND NIST SP 800-53 R4) AND TO SUPPORT OPERATIONS WITH CSM LEVEL 5 UNCLASSIFIED INFORMATION. THE CONTRACTOR SHALL PROVIDE A DETAILED REPORT OF OBSERVATIONS, ANALYSIS AND RECOMMENDATIONS REGARDING SERVICES SUPPORTING CSM LEVEL 5 UNCLASSIFIED INFORMATION, SPECIFICALLY RE-GARDING AFFORDABILITY AND OPTIMIZATION FOR AFFORDABILITY. APPENDIX 1 DETAILS SPECIFIC ELEMENTS REQUIRED WITHIN THE RE-PORT. ADDITIONALLY, THE GOVERNMENT DESIRES AN OPTION, SUBJECT TO AVAILABILITY OF FUNDS, TO ADD AN ADDITIONAL SERVICE ENVIRON-MENT CONFIGURED FOR OPERATIONS AS A SECRET ENCLAVE WITH THE OBJECTIVE OF VALIDATING CSM LEVEL 6 CONTROLS, PROCESSES AND DOCUMENTATION. THE DOD INTENDS TO EMPLOY (AND PROVIDE, IF REQUIRED) SIPRNET CIRCUIT CONNECTIVITY INTO THE PRO-VIDER S DATA CENTERS FOR THE EXERCISE OF CLASSIFIED OPTIONS. THE CURRENT CSM FOR LEVEL 6 IS UNDER DEVELOPMENT, HOWEVER THE GOVERNMENT IS REQUESTING BIDDERS USE THE DRAFT REQUIREMENTS FOR IMPACT LEVEL 6 LOCATED AT: HTTP://IASE.DISA.MIL/CLOUD_SECURITY/DOCUMENTS/UNCLASS-CLOUDSECURITYMODEL_V3-0D.PDF THE ENCLAVE SHALL SUPPORT UP TO 10,000 USERS. THE NEW SERVICE WILL MEET INDUSTRY PERFORMANCE STANDARDS, OFFER THE NECESSARY REDUNDANCY AND CONTINGENCY FEATURES TO MEET USAF NEEDS, AND PROVIDE STATE-OF-THE-ART TECHNOLOGY ENHANCEMENTS TO IMPROVE USER EXPERIENCE AND MINIMIZE SERVICE DISRUPTION. THIS PERFORMANCE WORK STATEMENT (PWS) ISSUED BY USAF DESCRIBES THE GOALS EXPECTED TO BE ACHIEVED WITH REGARD TO EXECUTING THE TRANSITION OF ENTERPRISE CAPABILITIES TO THE CLOUD AND OPERATION OF THE NEW SERVICE VIA A CLOUD EMAIL/UNIFIED CAPABILITIES AS A SERVICE (E/UCAAS) CERTIFICATION, ACCREDITATION, DEMONSTRATION AND OPERATIONS.

Place of Performance

Location: ROUND ROCK, WILLIAMSON County, TEXAS, 78682

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $23.6 million to DELL FEDERAL SYSTEMS L.P for work described as: IGF::CT::IGF THE UNITED STATES AIR FORCE (USAF) IS PURSUING THE ACQUISITION OF UNIFIED CAPABILITIES (UC) TO SATISFY DEPARTMENT OF DEFENSE USER NEEDS FOR CATEGORIZED INFORMATION (PER DOD CLOUD SECURITY MODEL (CSM)) COMMUNICATION, EMAIL, COLLABORATION SERVICES, OFFICE PRODUCTIVITY… Key points: 1. The contract aims to improve efficiency, agility, and innovation by transitioning unclassified IT services to the cloud. 2. Potential cost savings are anticipated through this cloud migration initiative. 3. The acquisition addresses the perceived insufficiency and high cost of traditional outsourcing and system integration support. 4. This initiative focuses on Software as a Service (SaaS) for communication, email, collaboration, and productivity tools. 5. The contract falls under the 'Other Computer Related Services' NAICS code, indicating a broad scope of IT support. 6. The award was made under a firm-fixed-price contract type, providing cost certainty for the government.

Value Assessment

Rating: good

The contract value of $23.6 million over approximately 2.7 years (825 days) for cloud transition services appears reasonable given the scope. Benchmarking against similar large-scale cloud migration projects for federal agencies suggests this is within a typical range. The firm-fixed-price structure helps manage cost overruns, although the specific unit costs for services are not detailed in the provided data. The focus on SaaS solutions from a commercial provider indicates an effort to leverage existing, scalable cloud infrastructure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, suggesting that multiple vendors had the opportunity to bid. This competitive process is generally expected to yield better pricing and a wider range of solutions. The data indicates three bidders participated, which is a moderate level of competition. A higher number of bidders could potentially drive prices lower, but three bidders still provide a basis for price discovery and selection of a qualified vendor.

Taxpayer Impact: Full and open competition ensures that taxpayer dollars are used efficiently by fostering a competitive environment that can lead to more favorable pricing and innovative solutions.

Public Impact

The primary beneficiaries are the United States Air Force personnel who will gain access to modern, cloud-based productivity and communication tools. The services delivered include email, collaboration, office productivity, and records management as a SaaS. The geographic impact is likely nationwide, supporting Air Force operations across various bases and locations. Workforce implications include potential shifts in IT support roles and increased reliance on cloud-based tools for daily operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The duration of the contract (825 days) is relatively short for a major IT infrastructure transition, potentially leading to follow-on contracts or integration challenges.
The specific details of the cloud security model (CSM) implementation are not provided, which could represent a risk if not adequately addressed.
Transitioning to a SaaS model may introduce vendor lock-in concerns if not managed carefully with exit strategies.

Positive Signals

The use of a firm-fixed-price contract provides cost certainty for the government.
Awarding through full and open competition suggests a robust evaluation process and potential for best value.
The stated goal of improving efficiency, agility, and innovation aligns with modern IT best practices.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on cloud computing and Software as a Service (SaaS). The market for government cloud services is substantial and growing, driven by agencies seeking to modernize infrastructure, enhance cybersecurity, and achieve cost efficiencies. Comparable spending benchmarks for large federal cloud migrations often run into hundreds of millions or even billions of dollars, depending on the scope and complexity. This particular contract, valued at $23.6 million, represents a significant but not massive investment for a specific capability transition within the Air Force.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. Given the nature of the services (large-scale cloud transition) and the prime contractor (Dell Federal Systems L.P.), it is likely that any small business involvement would be through subcontracting opportunities. Analysis of subcontracting plans would be necessary to determine the extent of small business participation and its impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the contracting agency, the Department of Defense's Defense Information Systems Agency (DISA), and potentially the Air Force's own oversight bodies. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse. Transparency is generally facilitated through contract award databases like FPDS, where basic contract information is publicly available. The firm-fixed-price nature of the contract provides a degree of accountability regarding cost.

Related Government Programs

DoD Cloud Computing Strategy
Enterprise IT as a Service (EITaaS)
General Services Administration (GSA) Cloud Offerings
Defense Information Technology Contracting Organization (DITCO) Contracts

Risk Flags

Cybersecurity Risk
Data Security and Privacy
Vendor Lock-in
Interoperability Challenges
Transition Disruption

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.6 million to DELL FEDERAL SYSTEMS L.P. IGF::CT::IGF THE UNITED STATES AIR FORCE (USAF) IS PURSUING THE ACQUISITION OF UNIFIED CAPABILITIES (UC) TO SATISFY DEPARTMENT OF DEFENSE USER NEEDS FOR CATEGORIZED INFORMATION (PER DOD CLOUD SECURITY MODEL (CSM)) COMMUNICATION, EMAIL, COLLABORATION SERVICES, OFFICE PRODUCTIVITY AND RECORDS MANAGEMENT AS SOFTWARE AS A SERVICE (SAAS) FROM A COMMERCIAL PROVIDER OF CLOUD COMPUTING SERVICES. THE PRIMARY GOAL OF THIS ACQUISITION IS TO EXPLORE SOLUTION AND SERVICES NECESSARY FOR USAF TO TRANSITION

Who is the contractor on this award?

The obligated recipient is DELL FEDERAL SYSTEMS L.P.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $23.6 million.

What is the period of performance?

Start: 2015-06-19. End: 2017-09-21.

What is the track record of Dell Federal Systems L.P. in delivering similar large-scale cloud transition services to the U.S. Air Force or other federal agencies?

Dell Federal Systems L.P. has a history of providing IT hardware, software, and services to the U.S. government. While specific details on their track record for large-scale, end-to-end cloud transitions for the Air Force under this exact contract are not fully elaborated in the provided data, Dell is a major player in the federal IT market. Their experience typically spans infrastructure modernization, data center consolidation, and deployment of various IT solutions. For this particular contract, the award suggests they met the government's requirements for delivering unified capabilities as a SaaS. Further investigation into past performance evaluations and other similar contracts awarded to Dell would provide a more comprehensive understanding of their capabilities and reliability in this domain.

How does the per-unit cost of these cloud services compare to market rates or other government cloud contracts?

The provided data does not include specific per-unit cost breakdowns for the services rendered under this contract, making a direct comparison difficult. The total contract value is $23,599,282.40 over a period of 825 days. Without knowing the exact quantities of services (e.g., number of users, storage capacity, specific software licenses), it's impossible to calculate a meaningful per-unit cost. Generally, government cloud services procured through large contracts and competitive bidding aim to achieve economies of scale. However, market rates for SaaS can vary significantly based on the provider, features, and service level agreements. Benchmarking would require access to detailed pricing information and comparison with similar SaaS agreements within the government or commercial sectors.

What are the primary risks associated with transitioning the Air Force's unclassified IT services to a cloud-based SaaS model, and how were they mitigated?

Key risks in such a transition include cybersecurity vulnerabilities, data security and privacy concerns, potential vendor lock-in, service disruptions during migration, and ensuring interoperability with existing systems. The Air Force's adherence to the DoD Cloud Security Model (CSM) is a critical mitigation strategy for cybersecurity. The use of a commercial provider implies reliance on their security protocols, which must meet stringent government standards. Vendor lock-in can be mitigated through contract clauses that ensure data portability and clear exit strategies. Service disruptions are managed through phased rollouts and robust testing. Interoperability is addressed during the solution design and integration phases. The specific mitigation plans for this contract are not detailed but would be a crucial part of the overall acquisition strategy.

What is the expected impact of this cloud transition on the Air Force's IT infrastructure and operational agility?

The expected impact is significant. Transitioning to a cloud-based SaaS model is designed to enhance operational agility by providing more flexible, scalable, and accessible IT services. This can enable faster deployment of new capabilities, improve collaboration among personnel, and allow for more dynamic resource allocation. Modernizing the IT infrastructure by moving away from potentially outdated on-premise systems can also reduce maintenance burdens and improve reliability. The goal is to make the Air Force's IT environment more responsive to evolving mission needs and technological advancements, fostering innovation and improving overall efficiency.

How does this contract align with broader U.S. Air Force and Department of Defense strategies for cloud adoption and IT modernization?

This contract directly aligns with the broader DoD and Air Force strategies for cloud adoption and IT modernization. The Department of Defense has been actively pursuing cloud computing as a key enabler for digital transformation, aiming to improve warfighter capabilities, enhance data analytics, and streamline operations. The Air Force, in particular, has initiatives like the Enterprise IT as a Service (EITaaS) program, which seeks to modernize its IT infrastructure by leveraging cloud technologies and commercial services. This contract, focusing on unified capabilities as SaaS, is a concrete step towards achieving those strategic objectives by migrating essential services to a more agile and efficient cloud environment.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Dell Technologies Inc. (UEI: 601839660)

Address: 1 DELL WAY, ROUND ROCK, TX, 78682

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $23,599,282

Exercised Options: $23,599,282

Current Obligation: $23,599,282

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS35F0884P

IDV Type: FSS

Timeline