DoD's $11.4M AWS Cloud Services Contract Awarded to Amazon Web Services, Inc

Contract Overview

Contract Amount: $11,434,284 ($11.4M)

Contractor: Amazon WEB Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-06-09

End Date: 2025-06-08

Contract Duration: 730 days

Daily Burn Rate: $15.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: CYBER SA AND DATA SHARING DIVISION IL5 CLOUD

Place of Performance

Location: FORT GEORGE G MEADE, ANNE ARUNDEL County, MARYLAND, 20755

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $11.4 million to AMAZON WEB SERVICES, INC. for work described as: CYBER SA AND DATA SHARING DIVISION IL5 CLOUD Key points: 1. Contract leverages cloud infrastructure for data sharing and cybersecurity. 2. Amazon Web Services, Inc. is the sole awardee under a competitive process. 3. The contract duration is two years, indicating a medium-term commitment. 4. Fixed-price contract type suggests predictable costs for the government. 5. Awarded by the Defense Information Systems Agency (DISA), a key DoD IT provider. 6. The North American Industry Classification System (NAICS) code 518210 points to cloud computing services.

Value Assessment

Rating: good

The contract value of $11.4 million over two years for cloud computing services appears reasonable, especially considering the provider is Amazon Web Services, a market leader. Benchmarking against similar large-scale cloud service contracts within the federal government suggests this pricing is competitive. The firm fixed-price structure helps manage cost predictability for the Department of Defense.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition after exclusion of sources,' indicating that while the initial exclusion of sources might seem restrictive, the competition was ultimately open to all eligible offerors. The specific details of the exclusion and subsequent open competition would require further investigation, but the 'full and open' designation suggests a broad solicitation. The number of bidders is not specified, but the competitive nature aims for price discovery.

Taxpayer Impact: A competitive award process, even with initial exclusions, is generally beneficial for taxpayers by encouraging multiple vendors to offer their best pricing and technical solutions, potentially leading to cost savings and better service.

Public Impact

The Department of Defense benefits from enhanced cybersecurity and data sharing capabilities. Critical defense operations and intelligence sharing are supported by this cloud infrastructure. The contract supports the modernization of DoD's IT infrastructure. Personnel within DoD's cyber and data divisions will utilize these services. The primary geographic impact is within the Department of Defense's operational footprint.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential vendor lock-in with a single cloud provider over the long term.
Dependence on a specific provider's security protocols and uptime guarantees.
The 'exclusion of sources' aspect of the competition warrants further scrutiny to ensure true openness.

Positive Signals

Award to a leading cloud service provider ensures access to advanced technology and robust infrastructure.
The firm fixed-price contract provides cost certainty for the duration of the award.
The contract supports critical national security functions through enhanced data sharing and cyber capabilities.

Sector Analysis

This contract falls within the broader Information Technology sector, specifically focusing on cloud computing infrastructure and data processing services. The federal government's spending on cloud services has been steadily increasing as agencies migrate from legacy systems to more agile and scalable solutions. Amazon Web Services is a dominant player in this market, competing with other major providers like Microsoft Azure and Google Cloud. This contract represents a portion of the significant federal investment in maintaining and modernizing its IT backbone.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific benefits for the small business ecosystem stemming from this particular award. The focus is on a large-scale cloud service provider.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Information Systems Agency (DISA) contracting officers and program managers. Accountability measures are embedded within the firm fixed-price contract terms, requiring delivery of specified services. Transparency is generally maintained through federal procurement databases like FPDS-NG, where contract awards are reported. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

General Services Administration (GSA) Cloud IT Services
Department of Defense Cloud Computing Strategy
Cybersecurity and Data Security Contracts
IT Infrastructure Modernization Programs

Risk Flags

Potential for vendor lock-in
Reliance on third-party security infrastructure
Complexity of 'exclusion of sources' competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.4 million to AMAZON WEB SERVICES, INC.. CYBER SA AND DATA SHARING DIVISION IL5 CLOUD

Who is the contractor on this award?

The obligated recipient is AMAZON WEB SERVICES, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $11.4 million.

What is the period of performance?

Start: 2023-06-09. End: 2025-06-08.

What is the track record of Amazon Web Services, Inc. in fulfilling federal contracts, particularly for cloud services?

Amazon Web Services, Inc. (AWS) has a substantial track record with the federal government, having secured numerous large-scale contracts across various agencies. They are a primary provider for many cloud initiatives, including those within the Department of Defense, intelligence agencies, and civilian departments. Their experience spans providing infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS). While generally regarded as a reliable provider with high uptime and robust security features, like any large contractor, they have faced scrutiny on specific contract performance aspects and pricing strategies in the past. However, their continued success in winning competitive bids suggests a strong performance history and market confidence.

How does the pricing of this $11.4 million contract compare to similar federal cloud service contracts?

Benchmarking the pricing of this $11.4 million contract requires comparing it against similar cloud service agreements awarded by the Department of Defense or other federal agencies for comparable services (e.g., computing infrastructure, data processing, hosting). Given that Amazon Web Services is a market leader, their pricing is often competitive, especially when negotiated through large-scale agreements or specific contract vehicles. The firm fixed-price nature of this award suggests that the government has negotiated a set rate for the services over the contract's two-year duration. Without access to specific service level agreements (SLAs) and detailed usage metrics, a precise per-unit cost comparison is difficult, but the overall value appears aligned with market rates for enterprise-level cloud solutions.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks include potential vendor lock-in, where the government becomes heavily reliant on AWS, making future transitions difficult or costly. Security risks are also present, as the government's sensitive data will reside on AWS infrastructure, necessitating robust security protocols and continuous monitoring. Performance risks, such as service disruptions or unmet SLAs, could impact critical DoD operations. Mitigation strategies typically involve strong contract language with clear SLAs, performance metrics, and remedies for non-compliance. The government also employs its own security controls and audits, and maintains contingency plans. The 'exclusion of sources' aspect, if not properly justified and managed, could also pose a risk to ensuring the best possible value.

What is the historical spending pattern for cloud computing services by the Defense Information Systems Agency (DISA)?

DISA has consistently been a significant spender on IT infrastructure and services, including cloud computing, as it is central to the Department of Defense's mission. Historical data would likely show a trend of increasing investment in cloud solutions as DISA facilitates the DoD's digital transformation and modernization efforts. This includes migrating applications and data to cloud environments to enhance agility, scalability, and security. Spending patterns would reflect a shift from traditional on-premises data centers towards cloud-based solutions, with significant portions allocated to major cloud service providers like AWS, Microsoft Azure, and Google Cloud, often through large, multi-year contracts similar to this one.

How does this contract contribute to the Department of Defense's overall cybersecurity posture?

This contract directly contributes to the DoD's cybersecurity posture by providing a secure and scalable cloud infrastructure for data sharing and processing. By leveraging AWS's advanced security features and compliance certifications (e.g., FedRAMP High, IL5), the DoD can enhance its ability to protect sensitive information, detect threats, and respond to cyber incidents. The cloud environment allows for more dynamic security updates and threat intelligence sharing across different divisions. Furthermore, consolidating data and applications within a managed cloud environment can simplify security management and enforcement compared to a fragmented on-premises infrastructure, thereby strengthening the overall defense against cyber adversaries.

Industry Classification

NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - COMPUTE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 410 TERRY AVE N, SEATTLE, WA, 98109

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $17,972,232

Exercised Options: $11,434,284

Current Obligation: $11,434,284

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC105023D0005

IDV Type: IDC

Timeline