DHS awards $83.8M for Microsoft ELA, raising questions on value and competition

Contract Overview

Contract Amount: $83,817,023 ($83.8M)

Contractor: Dell Federal Systems L.P

Awarding Agency: Department of Homeland Security

Start Date: 2015-06-25

End Date: 2020-06-26

Contract Duration: 1,828 days

Daily Burn Rate: $45.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MICROSOFT ELA INITIAL ORDER.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20528

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $83.8 million to DELL FEDERAL SYSTEMS L.P for work described as: MICROSOFT ELA INITIAL ORDER. Key points: 1. Significant expenditure on a Microsoft Enterprise License Agreement (ELA). 2. Competition was limited, with Dell Federal Systems L.P. as the awardee. 3. Risk of overpaying due to potential lack of robust price discovery. 4. IT services sector, with a focus on software licensing.

Value Assessment

Rating: questionable

The $83.8M award for a Microsoft ELA requires careful scrutiny. Without detailed breakdowns of software and services included, it's difficult to benchmark against similar contracts or market rates. The firm-fixed-price nature provides cost certainty but doesn't guarantee value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition via a BPA Call. However, the specific nature of ELAs can sometimes limit true price competition if agencies are locked into specific vendor ecosystems.

Taxpayer Impact: Taxpayer funds are being used for software licensing. The effectiveness of the competition method in securing the best possible price for the government is a key consideration.

Public Impact

Federal agencies rely heavily on software licenses, impacting IT budgets. The use of ELAs can simplify procurement but may reduce negotiation leverage. Transparency in software spending is crucial for effective oversight.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with Microsoft ELAs.
Lack of detailed cost breakdown makes value assessment difficult.
BPA Call award mechanism may not always yield the lowest price.

Positive Signals

Firm-fixed-price contract provides budget certainty.
Awarded under full and open competition.

Sector Analysis

This award falls within the Information Technology sector, specifically software licensing. Benchmarks for IT spending vary widely, but large-scale ELAs represent a significant portion of agency IT budgets, often requiring specialized analysis to ensure cost-effectiveness.

Small Business Impact

The data does not indicate specific involvement of small businesses in this particular award. Large enterprise software agreements often involve direct dealings with major vendors or their primary partners, potentially limiting opportunities for smaller entities.

Oversight & Accountability

Oversight of this contract would involve monitoring software utilization, license compliance, and ensuring adherence to the terms of the BPA Call. Regular reviews of the ELA's value proposition against evolving market conditions are essential for accountability.

Related Government Programs

Other Computer Related Services
Department of Homeland Security Contracting
Office of Procurement Operations Programs

Risk Flags

Potential for overpayment due to lack of detailed cost breakdown.
Risk of vendor lock-in limiting future flexibility.
Effectiveness of price discovery in ELA procurement.
Need for clear metrics to assess ROI and benefits.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $83.8 million to DELL FEDERAL SYSTEMS L.P. MICROSOFT ELA INITIAL ORDER.

Who is the contractor on this award?

The obligated recipient is DELL FEDERAL SYSTEMS L.P.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Office of Procurement Operations).

What is the total obligated amount?

The obligated amount is $83.8 million.

What is the period of performance?

Start: 2015-06-25. End: 2020-06-26.

What specific Microsoft products and services are covered under this ELA, and how do their costs compare to commercial market rates or other government contracts?

The provided data lacks the granularity to detail specific Microsoft products and services included in the ELA. A comprehensive analysis would require access to the contract's statement of work and pricing schedules. Benchmarking against commercial rates and other government ELAs is crucial to determine if the $83.8M represents a fair and reasonable price, considering potential volume discounts and negotiated terms.

Given the award was a BPA Call, what was the process for ensuring maximum price competition and avoiding potential vendor lock-in?

While awarded under full and open competition via a BPA Call, the effectiveness of price discovery for an ELA can be challenging. The process should have involved soliciting quotes from multiple qualified vendors capable of fulfilling the ELA requirements. The government's negotiation strategy and leverage, particularly concerning specific software versions and support levels, are critical to ensuring competitive pricing and mitigating lock-in.

What is the projected return on investment or demonstrable benefit derived from this Microsoft ELA for the Department of Homeland Security?

The data does not provide information on the projected ROI or benefits of this ELA. Such analysis would typically involve assessing factors like improved user productivity, enhanced cybersecurity capabilities, reduced IT support costs, and the consolidation of software licenses. Without this context, it's difficult to ascertain the true value delivered to DHS beyond the acquisition of software.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

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

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: Dell Technologies Inc.

Address: 1 DELL WAY, ROUND ROCK, TX, 78682

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $83,817,023

Exercised Options: $83,817,023

Current Obligation: $83,817,023

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: HSHQDC15A00017

IDV Type: BPA

Timeline