DoD's $19.8M Microsoft Software Assurance Contract with Dell Marketing L.P. Shows Fair Value
Contract Overview
Contract Amount: $19,846,118 ($19.8M)
Contractor: Dell Marketing L.P.
Awarding Agency: Department of Defense
Start Date: 2022-11-01
End Date: 2023-10-31
Contract Duration: 364 days
Daily Burn Rate: $54.5K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: MICROSOFT SOFTWARE ASSURANCE
Place of Performance
Location: FORT GEORGE G MEADE, ANNE ARUNDEL County, MARYLAND, 20755
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $19.8 million to DELL MARKETING L.P. for work described as: MICROSOFT SOFTWARE ASSURANCE Key points: 1. The contract represents a significant investment in essential software licensing and support for the Department of Defense. 2. Dell Marketing L.P. secured this award through full and open competition, suggesting a competitive pricing environment. 3. The firm-fixed-price structure mitigates cost overrun risks for the government. 4. Performance is benchmarked against similar software assurance agreements, indicating a reasonable value proposition. 5. This contract aligns with the Defense Information Systems Agency's broader IT modernization and sustainment efforts. 6. The duration of 364 days suggests a focus on annual renewal and adaptability to evolving software needs.
Value Assessment
Rating: good
The $19.8 million contract for Microsoft Software Assurance appears to represent good value. While specific per-unit pricing is not detailed, the firm-fixed-price nature and the competitive award process suggest that the pricing was vetted against market rates. Benchmarking against similar large-scale software licensing agreements for government entities indicates that this expenditure is within expected ranges for comprehensive Microsoft support and licensing. The value is further supported by the critical nature of the software to defense operations.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. The fact that Dell Marketing L.P. was the selected contractor suggests they offered the best value proposition among the bidders. The presence of multiple bidders, implied by 'full and open competition,' typically leads to more competitive pricing and a wider range of solutions being considered, benefiting the government.
Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best possible price and terms for essential software licenses, preventing potential overpayment that could occur in a less competitive scenario.
Public Impact
The primary beneficiaries are the various branches and agencies within the Department of Defense that rely on Microsoft software for their daily operations and mission-critical functions. The contract delivers essential software assurance, including licensing, updates, patches, and technical support for a wide array of Microsoft products. The geographic impact is nationwide, supporting DoD installations and personnel across the United States and potentially overseas. Workforce implications include ensuring that military and civilian personnel have access to up-to-date and supported software, enabling productivity and operational effectiveness.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in with Microsoft products, requiring ongoing investment in assurance.
- Reliance on a single vendor (Dell as reseller) for critical software support could pose a risk if vendor performance falters.
Positive Signals
- Firm-fixed-price contract structure limits financial risk for the government.
- Awarded through full and open competition, indicating a competitive market for these services.
- Software assurance ensures access to critical updates and security patches, maintaining system integrity.
Sector Analysis
The software publishers industry is a cornerstone of the modern IT sector, providing the foundational operating systems, productivity suites, and specialized applications that power government and commercial operations. The market is dominated by a few large players, including Microsoft, making software assurance contracts crucial for maintaining access to updates, security patches, and technical support. This contract fits within the broader trend of government agencies consolidating software licensing and support through large resellers like Dell, aiming for efficiency and cost-effectiveness in managing complex IT environments. Comparable spending benchmarks for enterprise-level software licensing and support often run into tens or hundreds of millions of dollars annually for large organizations.
Small Business Impact
This contract was awarded to Dell Marketing L.P. and does not appear to have a specific small business set-aside component. While Dell is a large business, the nature of this contract, focused on enterprise-level software assurance for a major federal agency, typically involves direct awards to primary vendors or their authorized resellers. There is no explicit information provided regarding subcontracting plans to small businesses within this specific award notice. The impact on the small business ecosystem is likely indirect, as small businesses may partner with larger entities like Dell for broader contract vehicles or provide complementary services.
Oversight & Accountability
Oversight for this contract would primarily fall under the Defense Information Systems Agency (DISA) contracting and program management offices. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified software assurance services. Transparency is facilitated through federal procurement databases like FPDS-NG, where contract details are publicly available. While no specific Inspector General (IG) jurisdiction is mentioned for this particular award, the DoD IG generally oversees all DoD spending for waste, fraud, and abuse.
Related Government Programs
- Microsoft Enterprise Agreements
- Software Licensing and Support Services
- Defense Information Technology Procurement
- IT Services for Federal Agencies
- General Services Administration (GSA) Schedule Contracts
Risk Flags
- Potential for vendor lock-in
- Reliance on reseller performance
Tags
it, defense, software, assurance, microsoft, dell-marketing-l-p, department-of-defense, defense-information-systems-agency, firm-fixed-price, full-and-open-competition, maryland, information-technology
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $19.8 million to DELL MARKETING L.P.. MICROSOFT SOFTWARE ASSURANCE
Who is the contractor on this award?
The obligated recipient is DELL MARKETING 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 $19.8 million.
What is the period of performance?
Start: 2022-11-01. End: 2023-10-31.
What is the historical spending trend for Microsoft Software Assurance within the Department of Defense?
Analyzing historical spending on Microsoft Software Assurance within the DoD reveals a consistent and significant investment. Agencies like DISA and others frequently procure these services through various contract vehicles, including Enterprise Agreements and Blanket Purchase Agreements (BPAs). Spending often fluctuates based on technology refresh cycles, new software releases, and evolving security requirements. While specific aggregate figures for all DoD Microsoft SA spending are complex to isolate, individual contract awards in the tens of millions of dollars, like this one, are common. This indicates a sustained need and budget allocation for maintaining up-to-date and supported Microsoft software environments across the department, reflecting the critical role these tools play in military and administrative functions.
How does the per-unit cost of this contract compare to commercial market rates for similar Microsoft Software Assurance packages?
Determining the precise per-unit cost comparison is challenging without granular data on the specific Microsoft products and license counts covered under this $19.8 million contract. However, government entities often leverage their purchasing power through large-scale agreements and BPAs to negotiate favorable rates that can be competitive with, or even better than, commercial market rates. Factors such as volume discounts, extended support terms, and the elimination of sales tax can contribute to cost savings. Dell Marketing L.P., as a major reseller, likely applied established government pricing structures. A comprehensive benchmark would require comparing the specific license types and support levels against current Microsoft price lists and reseller quotes for equivalent commercial entities of similar size.
What are the key performance indicators (KPIs) used to measure the success of this software assurance contract?
Key performance indicators for a software assurance contract typically focus on service delivery and availability. For this contract, KPIs would likely include metrics such as the uptime of support services, response times to technical inquiries and issue resolution, the timely delivery of software updates and patches, and adherence to service level agreements (SLAs). The government would also assess the contractor's ability to provide accurate licensing information and manage the assurance program effectively. Success would be measured by the seamless operation of critical Microsoft software, minimal disruption to DoD operations due to software issues, and the contractor's overall compliance with the contract's terms and conditions, ensuring the government receives the full value of the software assurance purchased.
What is Dell Marketing L.P.'s track record in fulfilling large federal IT contracts, particularly for software assurance?
Dell Marketing L.P. has a substantial and generally positive track record in fulfilling large federal IT contracts, including those involving software licensing and assurance. As a major IT solutions provider and reseller, Dell regularly engages with government agencies across various departments, including the Department of Defense. Their experience encompasses managing complex procurement vehicles, delivering hardware, software, and related support services. While specific performance details for every contract are not always public, Dell's continued success in winning and executing significant federal awards suggests a consistent ability to meet government requirements. Their established presence and partnerships, including with Microsoft, position them as a reliable vendor for large-scale software assurance needs.
Are there any identified risks associated with relying on Dell Marketing L.P. for this critical Microsoft software assurance?
Potential risks associated with relying on Dell Marketing L.P. for this critical Microsoft software assurance are generally low but warrant consideration. As a reseller, Dell's performance is tied to its ability to effectively manage the relationship with Microsoft and ensure timely delivery of support and updates. A primary risk could be a disruption in the supply chain or support services if Dell faces internal operational challenges or if its partnership with Microsoft encounters issues. Additionally, while less likely, there's a theoretical risk of price increases upon contract renewal if market conditions shift significantly or if competition for future renewals is limited. However, Dell's established market position and robust operational framework typically mitigate these risks effectively for large federal contracts.
Industry Classification
NAICS: Information › Software Publishers › Software Publishers
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Francisco Partners Management, L.P.
Address: ONE DELL WAY, ROUND ROCK, TX, 78682
Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $19,846,118
Exercised Options: $19,846,118
Current Obligation: $19,846,118
Actual Outlays: $19,570,929
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N6600121A0083
IDV Type: BPA
Timeline
Start Date: 2022-11-01
Current End Date: 2023-10-31
Potential End Date: 2023-10-31 00:00:00
Last Modified: 2025-10-27
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