DoD's $2.89M continuous monitoring system contract awarded to Microsoft Corporation

Contract Overview

Contract Amount: $2,890,302 ($2.9M)

Contractor: Microsoft Corporation

Awarding Agency: Department of Defense

Start Date: 2024-09-11

End Date: 2026-09-10

Contract Duration: 729 days

Daily Burn Rate: $4.0K/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: CONTINUOUS MONITORING RISK SCORING / DIGITAL POLICY MANAGEMENT SYSTEM 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 $2.9 million to MICROSOFT CORPORATION for work described as: CONTINUOUS MONITORING RISK SCORING / DIGITAL POLICY MANAGEMENT SYSTEM CLOUD. Key points: 1. Value for money assessed through benchmarking against similar cloud service contracts. 2. Competition dynamics indicate a full and open process, potentially driving competitive pricing. 3. Risk indicators are monitored through ongoing performance and security assessments. 4. Performance context is framed by the need for continuous monitoring and digital policy management. 5. Sector positioning is within the Defense Information Systems Agency's IT infrastructure services.

Value Assessment

Rating: good

The contract value of $2.89 million for a continuous monitoring and digital policy management system appears reasonable when benchmarked against similar cloud-based IT service contracts awarded by federal agencies. Pricing for cloud infrastructure and managed services can vary significantly, but this award falls within expected ranges for specialized solutions. Further analysis would involve comparing the specific service level agreements and features offered against market rates for comparable systems.

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, suggesting that multiple vendors were considered and allowed to bid. The specific exclusion of sources implies a prior determination that a limited number of vendors could meet the requirements, but the subsequent full and open competition indicates a robust process. The number of bidders is not specified, but this approach generally fosters price discovery and ensures the government receives competitive offers.

Taxpayer Impact: A full and open competition, even with an initial exclusion of sources, is beneficial for taxpayers as it increases the likelihood of securing the best possible price and service for the government's needs.

Public Impact

The Department of Defense benefits from enhanced cybersecurity posture through continuous monitoring. Digital policy management capabilities will be improved, ensuring compliance and operational efficiency. The contract supports critical IT infrastructure within the Defense Information Systems Agency. Workforce implications include potential training needs for personnel managing the new system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the system becomes deeply integrated without clear exit strategies.
Reliance on a single vendor for critical cybersecurity infrastructure could pose a risk.
Ensuring adequate performance metrics are defined and enforced for continuous monitoring.

Positive Signals

Award to a major cloud provider suggests access to advanced technology and robust infrastructure.
Full and open competition indicates a structured procurement process aimed at value.
Clear contract duration allows for predictable budgeting and planning.

Sector Analysis

This contract falls within the broader IT and cloud computing sector, specifically focusing on cybersecurity and digital policy management. The market for these services is large and growing, driven by increasing cyber threats and the need for agencies to manage complex digital environments. Comparable spending benchmarks exist for cloud infrastructure, software-as-a-service (SaaS) for security, and managed IT services, with prices varying based on scope, features, and service level agreements.

Small Business Impact

The provided data does not indicate any small business set-asides or subcontracting requirements for this contract. As it was awarded to Microsoft Corporation, a large business, the focus is likely on direct service delivery rather than fostering small business participation through this specific award. Future analysis could explore if Microsoft has its own small business subcontracting program that might indirectly benefit small businesses.

Oversight & Accountability

Oversight for this contract will likely be managed by the Defense Information Systems Agency (DISA) through contract officers and technical representatives. Accountability measures will be tied to the performance metrics and service level agreements outlined in the contract. Transparency is generally maintained through federal procurement databases like FPDS, where contract awards are reported. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Continuous Monitoring as a Service (CMaaS)
Cloud Computing Services
Cybersecurity Software and Services
Digital Policy Management Platforms
Defense Information Technology Infrastructure

Risk Flags

Potential for vendor lock-in
Reliance on a single provider for critical security functions
Need for robust performance monitoring and enforcement

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $2.9 million to MICROSOFT CORPORATION. CONTINUOUS MONITORING RISK SCORING / DIGITAL POLICY MANAGEMENT SYSTEM CLOUD.

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 $2.9 million.

What is the period of performance?

Start: 2024-09-11. End: 2026-09-10.

What is the track record of Microsoft Corporation in delivering similar continuous monitoring and digital policy management solutions to federal agencies?

Microsoft Corporation has a significant track record in providing a wide range of IT services and solutions to federal agencies, including cloud computing (Azure), cybersecurity tools, and software licensing. Their Azure Government cloud platform is designed to meet stringent federal security requirements. While specific contracts for 'continuous monitoring risk scoring / digital policy management system cloud' may vary, Microsoft's extensive experience with large-scale federal IT deployments, including security and compliance solutions, suggests a strong capability. Agencies often leverage Microsoft's existing infrastructure and security offerings, integrating them with specialized tools or utilizing Microsoft's own security management services. Their ability to scale and provide robust infrastructure is well-documented, making them a common choice for critical federal IT needs.

How does the awarded price of $2.89 million compare to similar continuous monitoring system contracts?

Benchmarking the $2.89 million contract value requires comparing it against similar continuous monitoring and digital policy management systems procured by federal agencies. Contracts for such services can range widely based on scope, duration, specific features (e.g., AI-driven analytics, threat intelligence integration), and the underlying technology (e.g., on-premise vs. cloud). For a 2-year contract (as implied by the start and end dates), this annual value of approximately $1.45 million is within the expected range for specialized cybersecurity and IT management solutions. However, a more precise comparison would necessitate examining contracts with identical or highly similar service level agreements, user bases, and technical requirements. Without that granular detail, it's considered a fair market value, especially given the award to a major provider like Microsoft.

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

Primary risks associated with this contract include potential vendor lock-in, reliance on a single provider for critical cybersecurity functions, and the possibility of performance shortfalls if the system doesn't meet continuous monitoring objectives. Vendor lock-in is a common concern with cloud-based solutions; mitigation involves ensuring clear data portability and interoperability clauses within the contract, and potentially planning for future transitions. Reliance on Microsoft is mitigated by the company's established reputation and security certifications (e.g., FedRAMP High for Azure Government). Performance shortfalls are addressed through the contract's performance metrics, service level agreements (SLAs), and the oversight provided by the Defense Information Systems Agency (DISA). Regular reviews and potential penalties for non-compliance are standard mitigation strategies.

How effective is the 'full and open competition after exclusion of sources' approach in ensuring value for taxpayers?

The 'full and open competition after exclusion of sources' approach aims to balance the need for broad market participation with the reality that certain specialized requirements might initially limit the pool of qualified vendors. By first identifying potential sources and then opening the competition broadly, the government seeks to ensure that all capable vendors have a chance to bid, thereby maximizing competition. This process is generally effective for taxpayers because it encourages multiple bidders to offer their best pricing and technical solutions to win the contract. While the 'exclusion of sources' might suggest a narrower initial scope, the subsequent full and open competition phase is designed to drive down costs and improve service quality, ultimately benefiting taxpayer investment.

What is the historical spending pattern for continuous monitoring and digital policy management systems within the Department of Defense?

Historical spending patterns for continuous monitoring and digital policy management systems within the Department of Defense (DoD) show a consistent and increasing trend over the years. As cyber threats evolve and the complexity of DoD's IT infrastructure grows, investments in these areas have become critical. Spending is often distributed across various contracts, including those for network security, endpoint detection and response, vulnerability management, and policy enforcement tools. Cloud-based solutions have seen a significant rise in adoption, reflecting a broader government shift towards cloud migration. While specific figures for 'continuous monitoring risk scoring / digital policy management system cloud' are not readily available without deep dives into procurement databases, the overall DoD budget allocated to cybersecurity and IT infrastructure modernization indicates substantial and sustained investment in capabilities like the one awarded here.

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: 1 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: $6,094,459

Exercised Options: $3,833,908

Current Obligation: $2,890,302

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC105023D0003

IDV Type: IDC

Timeline