NIH renews Microsoft Enterprise Agreement for $78.1M, impacting software procurement and IT infrastructure

Contract Overview

Contract Amount: $78,104,377 ($78.1M)

Contractor: Dell Computer Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2007-06-01

End Date: 2011-06-15

Contract Duration: 1,475 days

Daily Burn Rate: $53.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: NOT REPORTED

Sector: IT

Official Description: RENEW MICROSOFT ENTERPRISE AGREEMENT SOFTWARE

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20894

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $78.1 million to DELL COMPUTER CORPORATION for work described as: RENEW MICROSOFT ENTERPRISE AGREEMENT SOFTWARE Key points: 1. The contract represents a significant investment in enterprise software licensing, suggesting a reliance on Microsoft products for core IT functions. 2. The renewal indicates a stable, long-term relationship with the vendor, potentially limiting opportunities for competitive pricing on alternative solutions. 3. The duration of the contract (over 4 years) suggests a need for predictable IT support and software updates. 4. The award value of $78.1M positions this as a major IT procurement for the agency. 5. The contract's focus on software renewal highlights the ongoing costs associated with maintaining an established IT ecosystem.

Value Assessment

Rating: fair

Benchmarking the value of this Microsoft Enterprise Agreement is challenging without specific details on the software licenses and services included. However, the total award of $78.1 million over approximately four years suggests a substantial commitment. Compared to other large federal enterprise software agreements, this value appears within a typical range for comprehensive Microsoft licensing. The absence of detailed pricing breakdowns makes it difficult to assess if the per-unit cost is competitive against market rates or other government-wide agreements.

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. While the specific reasons for excluding sources are not detailed, the 'full and open' designation implies that multiple vendors had the opportunity to bid. The fact that it was competed suggests an effort to ensure fair pricing and access to the market. However, the nature of enterprise software agreements, especially for established platforms like Microsoft, can sometimes limit the practical number of competitive bidders.

Taxpayer Impact: A full and open competition, even with exclusions, is generally favorable for taxpayers as it aims to secure the best possible pricing through market forces.

Public Impact

Federal employees within the National Institutes of Health (NIH) benefit from access to updated Microsoft software and services, supporting their research and administrative functions. The contract ensures the continued availability of essential IT tools, including operating systems, productivity suites, and potentially server software, across NIH's infrastructure. This procurement supports the IT infrastructure in Maryland, where NIH's primary campus is located, and potentially other NIH facilities nationwide. The contract sustains jobs within the IT sector, both at the prime contractor and potentially at Microsoft and its partners, involved in software delivery and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with Microsoft's ecosystem, making future transitions to alternative software difficult and costly.
The large dollar amount could be subject to budget fluctuations or reallocations if not managed carefully.
Reliance on a single vendor for critical enterprise software may pose risks if the vendor experiences service disruptions or significant price increases in the future.

Positive Signals

The use of full and open competition aims to ensure a competitive pricing structure for the software licenses.
A long-term agreement provides budget predictability for the agency's software needs over the contract period.
Renewal of an enterprise agreement often includes access to the latest software versions and security updates, enhancing IT security and user productivity.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on enterprise software licensing and maintenance. The market for enterprise software is dominated by a few major players, including Microsoft, Oracle, and SAP. Federal agencies often procure software through large enterprise agreements to achieve economies of scale and standardize IT environments. Comparable spending benchmarks for federal agencies on Microsoft enterprise agreements can vary widely based on the number of users, the specific software suite, and the duration of the contract, but multi-million dollar renewals are common for large departments.

Small Business Impact

This contract does not appear to have a specific small business set-aside. Given the nature of enterprise-wide software licensing from a major vendor like Microsoft, it is unlikely that small businesses would be the primary awardees for the core agreement. However, the prime contractor, Dell, may utilize small businesses for subcontracting opportunities related to deployment, training, or support services, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of Health and Human Services' contracting officers and program managers. The National Institutes of Health (NIH) would have internal processes for monitoring contract performance, ensuring compliance with terms and conditions, and verifying deliverables. Transparency is generally maintained through contract databases like FPDS-NG, where award details are publicly accessible. Inspector General oversight may be involved if any issues of fraud, waste, or abuse arise.

Related Government Programs

General Services Administration (GSA) Schedules
Enterprise Software Agreements
IT Procurement
Microsoft Licensing
Cloud Computing Services

Risk Flags

Potential for vendor lock-in
Lack of detailed pricing transparency
Reliance on a single software provider

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $78.1 million to DELL COMPUTER CORPORATION. RENEW MICROSOFT ENTERPRISE AGREEMENT SOFTWARE

Who is the contractor on this award?

The obligated recipient is DELL COMPUTER CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $78.1 million.

What is the period of performance?

Start: 2007-06-01. End: 2011-06-15.

What specific Microsoft products and services are covered under this $78.1 million enterprise agreement?

The provided data indicates the contract is for 'RENEW MICROSOFT ENTERPRISE AGREEMENT SOFTWARE' but does not specify the exact products or services included. Typically, Microsoft Enterprise Agreements cover a suite of products such as Windows operating system licenses, Office 365 (now Microsoft 365) subscriptions for productivity tools like Word, Excel, and Outlook, server licenses (e.g., Windows Server, SQL Server), and potentially CALs (Client Access Licenses). The agreement might also include Software Assurance, which provides rights to new versions and technical support. Without a detailed statement of work or contract line item details, the precise scope remains unspecified.

How does the $78.1 million award compare to previous or subsequent Microsoft Enterprise Agreements at NIH?

The provided data shows this award of $78,104,377.04 occurred between June 1, 2007, and June 15, 2011. To compare it to previous or subsequent agreements, one would need to access historical FPDS data for NIH's Microsoft procurements. Without that comparative data, it's difficult to definitively state if this was an increase or decrease in spending. However, given the general trend of increasing software costs and the expansion of IT services, it is plausible that subsequent agreements might be of similar or higher value, especially if more users or services were included. The duration of 1475 days (approx. 4 years) is typical for such agreements.

What were the key factors that led to the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award type?

The award type 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' suggests that the government intended to solicit bids from all responsible sources but, for specific reasons not detailed here, excluded certain potential sources from the competition. This could occur if certain vendors did not meet specific technical requirements, past performance criteria, or if there were specific socio-economic or national security considerations. The 'full and open' aspect means that, among the eligible bidders, the competition was open. This approach aims to balance the desire for broad market participation with the need to ensure only qualified vendors are considered, potentially leading to better value than a sole-source award.

What is the estimated value of this contract on an annual basis?

The total award amount for this contract is $78,104,377.04, and the duration is 1475 days. To estimate the annual value, we can divide the total award by the duration in years. 1475 days is approximately 4.04 years (1475 / 365.25). Therefore, the estimated annual value is roughly $78,104,377.04 / 4.04 years, which equates to approximately $19.33 million per year. This provides a clearer picture of the ongoing investment in Microsoft software licensing and related services for the NIH.

What are the potential risks associated with a long-term enterprise software agreement like this for the NIH?

Long-term enterprise software agreements, such as this Microsoft renewal, carry several potential risks. Firstly, there's the risk of vendor lock-in, where the agency becomes heavily reliant on a single vendor's ecosystem, making it difficult and costly to switch to alternative solutions in the future. Secondly, pricing can become a concern; while initial agreements might offer competitive rates, subsequent renewals could see price increases that are harder to negotiate against due to the established dependency. Thirdly, technological obsolescence is a risk; the software covered might not keep pace with rapid technological advancements, or the agency's needs might evolve beyond what the agreement optimally covers. Finally, security vulnerabilities within the software could pose a significant risk to the agency's data and operations if not promptly addressed by the vendor.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: NOT REPORTED (NO)

Evaluated Preference: NONE

Contractor Details

Address: 1 DELL WAY, ROUND ROCK, TX, 90

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: $78,104,378

Exercised Options: $78,104,377

Current Obligation: $78,104,377

Parent Contract

Parent Award PIID: 26303D0505

IDV Type: BPA

Timeline