HHS awards $46.2M for Microsoft Enterprise Agreement, highlighting IT infrastructure needs

Contract Overview

Contract Amount: $46,209,569 ($46.2M)

Contractor: CDW Government LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2012-06-25

End Date: 2017-03-31

Contract Duration: 1,740 days

Daily Burn Rate: $26.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MICROSOFT ENTERPRISE AGREEMENT

Place of Performance

Location: VERNON HILLS, LAKE County, ILLINOIS, 60061

State: Illinois Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $46.2 million to CDW GOVERNMENT LLC for work described as: MICROSOFT ENTERPRISE AGREEMENT Key points: 1. The contract value represents a significant investment in enterprise software licensing. 2. Competition dynamics suggest a potentially competitive bidding process for IT services. 3. The duration of the contract indicates a long-term commitment to a specific vendor. 4. Performance context is tied to the ongoing need for robust IT infrastructure. 5. This spending falls within the broader IT sector, supporting essential government operations.

Value Assessment

Rating: fair

The total award of $46.2 million over approximately five years suggests an average annual spend of $9.24 million. Benchmarking this against similar large-scale enterprise software agreements for government agencies is challenging without specific details on the software suite and user count. However, the firm fixed-price nature of the contract provides cost certainty. The provided data does not include a direct comparison to market rates for comparable Microsoft enterprise agreements, making a precise value-for-money assessment difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but the 'full and open' designation generally suggests a competitive environment. This approach aims to leverage market forces to achieve favorable pricing and terms for the government.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it encourages multiple vendors to offer their best pricing and solutions, potentially leading to cost savings and better service delivery.

Public Impact

Federal employees across the Centers for Disease Control and Prevention benefit from access to essential Microsoft software. The contract ensures the availability of critical IT tools for data analysis, communication, and administrative functions. The geographic impact is primarily within the operational areas of the CDC, supporting its national health mission. Workforce implications include enabling productivity and efficiency for government IT users.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with long-term enterprise agreements.
Risk of over-licensing if usage patterns change significantly.
Dependence on a single vendor for critical software infrastructure.

Positive Signals

Provides cost certainty through a firm fixed-price contract.
Ensures access to up-to-date software and support.
Leverages economies of scale for enterprise-wide licensing.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on enterprise software licensing and support. The market for enterprise software, particularly from major vendors like Microsoft, is characterized by large, long-term agreements with government entities. Comparable spending benchmarks would involve analyzing other federal agencies' IT software procurement, especially for similar operating systems, productivity suites, and cloud services.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. As a large enterprise agreement, it is unlikely to have been directly awarded to small businesses. However, the prime contractor, CDW GOVERNMENT LLC, may engage small businesses for subcontracting opportunities, though this is not explicitly detailed in the award information.

Oversight & Accountability

The contract is subject to standard federal procurement oversight. The firm fixed-price nature provides a degree of financial oversight by locking in costs. Transparency is facilitated through federal contract databases where such awards are reported. The Inspector General's office for the Department of Health and Human Services would have jurisdiction over any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Microsoft Enterprise Agreements
Federal Civilian IT Procurement
Software Licensing and Maintenance
Centers for Disease Control and Prevention IT Spending

Risk Flags

Potential for vendor lock-in
Long-term reliance on a single software provider
Need for detailed performance metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $46.2 million to CDW GOVERNMENT LLC. MICROSOFT ENTERPRISE AGREEMENT

Who is the contractor on this award?

The obligated recipient is CDW GOVERNMENT LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Disease Control and Prevention).

What is the total obligated amount?

The obligated amount is $46.2 million.

What is the period of performance?

Start: 2012-06-25. End: 2017-03-31.

What is the specific breakdown of software and services included in this Microsoft Enterprise Agreement?

The provided data identifies this as a 'MICROSOFT ENTERPRISE AGREEMENT' but does not detail the specific software products, licenses, or support services included. Enterprise Agreements typically cover a broad range of Microsoft products such as Windows operating systems, Office 365 (now Microsoft 365), server software (like Windows Server and SQL Server), and associated technical support and maintenance. The exact composition would be detailed in the contract's statement of work. Without this, it's difficult to assess the value proposition beyond general enterprise software needs.

How does the $46.2 million award compare to historical IT spending by the CDC for similar software agreements?

To compare this $46.2 million award to historical CDC IT spending, one would need to access historical contract data for previous Microsoft enterprise agreements or similar large-scale software procurements by the CDC. This data is not provided. Analyzing past spending patterns would reveal trends in IT investment, potential increases or decreases in software costs over time, and the evolution of the CDC's IT infrastructure strategy. A significant deviation from historical norms could warrant further investigation into the reasons behind the change.

What are the key performance indicators (KPIs) used to measure the success of this Microsoft Enterprise Agreement?

The provided data does not specify the Key Performance Indicators (KPIs) for this contract. Typically, for enterprise software agreements, KPIs might include software uptime and availability, response times for technical support, successful deployment rates of new software versions, user satisfaction surveys, and adherence to licensing compliance. The effectiveness of the agreement is often measured by its ability to support the CDC's mission-critical operations, enhance user productivity, and provide a secure and reliable IT environment within the allocated budget.

What is the track record of CDW GOVERNMENT LLC in delivering similar large-scale enterprise software solutions to federal agencies?

CDW GOVERNMENT LLC is a well-established reseller and solutions provider for a wide range of technology products and services, including Microsoft software. Their track record with federal agencies is generally extensive, often involving the procurement and delivery of hardware, software, and IT services. For large enterprise agreements like this, their role typically involves managing the licensing, procurement process, and potentially providing some level of technical support or integration services, often in partnership with the software manufacturer. Assessing their specific performance on this particular contract would require reviewing performance reports and user feedback.

Are there any identified risks associated with relying on a single vendor for such a significant portion of the CDC's IT software needs?

Yes, there are inherent risks associated with relying on a single vendor for a significant portion of IT software needs. These include vendor lock-in, where switching to a different provider becomes prohibitively expensive or complex. There's also the risk of price increases upon contract renewal, as the vendor may have significant leverage. Furthermore, dependence on one vendor can limit flexibility in adopting new technologies or integrating solutions from other providers. The government attempts to mitigate these risks through careful contract negotiation, including exit clauses, and by ensuring competitive bidding processes where feasible.

What is the potential impact of this contract on the broader IT market, particularly concerning competition for enterprise software?

Large enterprise agreements with major software vendors like Microsoft, especially when awarded through full and open competition, can influence the broader IT market. While this specific award is to a reseller (CDW GOVERNMENT LLC), it reinforces the dominance of major software providers in the federal space. It highlights the significant market share these vendors hold and the substantial revenue generated from government contracts. For other software providers, it underscores the challenge of competing against established ecosystems. However, the competitive bidding process for the reseller role can foster competition among IT solution providers.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 2012N14292

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: CDW Corporation (UEI: 808068253)

Address: 200 N MILWAUKEE AVE, VERNON HILLS, IL, 60061

Business Categories: Category Business, Not Designated a Small Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations

Financial Breakdown

Contract Ceiling: $46,209,569

Exercised Options: $46,209,569

Current Obligation: $46,209,569

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: ECSII26303D0501

IDV Type: IDC

Timeline