HHS CDC Spends $65.7M on Microsoft Enterprise Agreement with CDW Government LLC
Contract Overview
Contract Amount: $65,717,344 ($65.7M)
Contractor: CDW Government LLC
Awarding Agency: Department of Health and Human Services
Start Date: 2017-03-31
End Date: 2022-03-31
Contract Duration: 1,826 days
Daily Burn Rate: $36.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: IGF::CT::IGF 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 $65.7 million to CDW GOVERNMENT LLC for work described as: IGF::CT::IGF MICROSOFT ENTERPRISE AGREEMENT Key points: 1. Significant spending on enterprise software licensing highlights reliance on major vendors. 2. Competition was full and open, suggesting potential for price discovery. 3. The contract duration of 5 years (1826 days) indicates a long-term commitment. 4. The NAICS code 541519 suggests a broad category of computer-related services.
Value Assessment
Rating: fair
The total award amount of $65.7M over 5 years averages $13.14M annually. Benchmarking against similar enterprise agreements for Microsoft products is difficult without specific product details, but the scale suggests a substantial investment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which generally allows for a wider range of bidders and potentially better pricing. The use of a Firm Fixed Price contract provides cost certainty.
Taxpayer Impact: Taxpayer funds are utilized for this significant software licensing agreement. The competitive nature of the award is a positive factor for cost efficiency.
Public Impact
Public health agencies rely on robust IT infrastructure, including enterprise software, for operations. The cost of software licensing can be a substantial portion of IT budgets. Transparency in government IT spending is crucial for public trust.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of specific product details makes it hard to assess value.
- Long contract duration could lead to price increases if not managed.
- Reliance on a single vendor (Microsoft) can create lock-in.
Positive Signals
- Awarded under full and open competition.
- Firm Fixed Price contract provides budget predictability.
Sector Analysis
Information Technology spending is a critical component of government operations. This contract falls within the broader IT services sector, where enterprise agreements for software are common. Benchmarks for similar large-scale Microsoft agreements are often proprietary but are generally substantial.
Small Business Impact
This contract does not appear to have specific set-asides for small businesses, as indicated by 'sb': false. Large enterprise agreements often involve major vendors or resellers, potentially limiting direct participation by small businesses.
Oversight & Accountability
The contract was awarded by the Department of Health and Human Services (HHS) to the Centers for Disease Control and Prevention (CDC). Oversight would typically involve contract management by the CDC's contracting officers and potentially agency-level IG reviews.
Related Government Programs
- Other Computer Related Services
- Department of Health and Human Services Contracting
- Centers for Disease Control and Prevention Programs
Risk Flags
- Lack of specific product details
- Long contract duration
- Potential for vendor lock-in
- Reliance on a single software vendor
Tags
other-computer-related-services, department-of-health-and-human-services, il, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $65.7 million to CDW GOVERNMENT LLC. IGF::CT::IGF 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 $65.7 million.
What is the period of performance?
Start: 2017-03-31. End: 2022-03-31.
What specific Microsoft products and services are covered under this $65.7M agreement, and how do their costs compare to market rates?
The provided data lacks specific product details, making a precise value assessment challenging. Without knowing the exact software licenses, user counts, and support levels, it's impossible to benchmark against market rates effectively. Further analysis would require a breakdown of the agreement's components to determine if the pricing reflects fair market value for the procured Microsoft solutions.
What are the potential risks associated with a 5-year firm fixed-price agreement for enterprise software, particularly regarding technological obsolescence or vendor lock-in?
A 5-year firm fixed-price agreement carries risks of technological obsolescence if software versions become outdated or unsupported within the term. Vendor lock-in is also a concern, as switching providers for enterprise software can be costly and disruptive. The government must ensure robust contract management and potentially include clauses for upgrades or competitive re-evaluation to mitigate these risks.
How effectively does this full and open competition award mechanism ensure optimal value and cost savings for taxpayers on enterprise software?
Full and open competition is designed to maximize value by encouraging multiple bids, which typically drives down prices. For enterprise software, this mechanism can be effective if the scope is well-defined and the market has sufficient qualified vendors. However, the complexity of enterprise licensing means that even with competition, ongoing vendor management and negotiation are crucial to ensure sustained cost savings and value realization.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: 2017Q66467
Offers Received: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: CDW Corporation
Address: 230 N MILWAUKEE AVE, VERNON HILLS, IL, 60061
Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $66,742,973
Exercised Options: $66,742,973
Current Obligation: $65,717,344
Actual Outlays: $5,257,510
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: HHSN316201500011W
IDV Type: GWAC
Timeline
Start Date: 2017-03-31
Current End Date: 2022-03-31
Potential End Date: 2022-03-31 00:00:00
Last Modified: 2023-11-30
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