DoD awards $109M for Oracle software maintenance, with V3Gate LLC securing the contract

Contract Overview

Contract Amount: $109,119,800 ($109.1M)

Contractor: V3gate, LLC

Awarding Agency: Department of Defense

Start Date: 2022-11-29

End Date: 2026-11-29

Contract Duration: 1,461 days

Daily Burn Rate: $74.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ORACLE SOFTWARE MAINTENANCE AND SUPPORT

Place of Performance

Location: JBSA FT SAM HOUSTON, BEXAR County, TEXAS, 78234

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $109.1 million to V3GATE, LLC for work described as: ORACLE SOFTWARE MAINTENANCE AND SUPPORT Key points: 1. Contract value of $109.2 million over approximately four years suggests significant investment in critical IT infrastructure. 2. The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating a specific justification for limiting the initial pool. 3. A fixed-price contract type aims to control costs, but requires careful monitoring to ensure value is realized. 4. The Defense Health Agency's reliance on Oracle software highlights the importance of specialized IT support for healthcare operations. 5. The duration of the contract (1461 days) allows for sustained support but necessitates long-term planning and oversight. 6. The North American Industry Classification System (NAICS) code 541519 points to a broad category of 'Other Computer Related Services,' suggesting a comprehensive scope of work.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the Oracle software modules and support levels provided. The $109.2 million award over roughly four years averages to approximately $27.3 million annually. This figure needs to be compared against similar large-scale Oracle maintenance and support contracts within the federal government and the private sector. The fixed-price nature suggests an attempt to cap costs, but the absence of detailed performance metrics or competitive pricing comparisons makes a definitive value-for-money assessment difficult. Further analysis would require understanding the specific services included and the criticality of these Oracle systems to the Defense Health Agency's mission.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This procurement method implies that while the competition was intended to be open, there was a specific reason or justification for excluding certain sources or limiting the initial scope. The 'after exclusion of sources' phrasing suggests that a broader competition might have been considered but ultimately narrowed down. The number of bidders is not explicitly stated in the provided data, but the designation implies a controlled competitive environment rather than a completely unrestricted one. This approach can sometimes lead to higher prices if the excluded sources represent significant competition.

Taxpayer Impact: Taxpayers may face higher costs due to the limited nature of the competition. When the pool of potential bidders is restricted, the government may not achieve the most competitive pricing possible. This necessitates strong justification for the exclusion of sources to ensure public funds are used efficiently.

Public Impact

The primary beneficiaries are the Department of Defense and specifically the Defense Health Agency, which relies on Oracle software for its operations. The contract ensures the continued maintenance and support of critical Oracle software systems, vital for healthcare data management and operational efficiency within the military. The geographic impact is likely nationwide, supporting military healthcare facilities and personnel across various locations. Workforce implications include the potential for IT professionals employed by V3Gate, LLC, and potentially subcontractors, to be involved in supporting these systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition could result in suboptimal pricing for taxpayers.
The 'after exclusion of sources' justification needs thorough review to ensure it was appropriate and not a barrier to broader competition.
Reliance on a single vendor's software (Oracle) can create long-term dependency and potential vendor lock-in.
The broad NAICS code (541519) might obscure the specific nature and complexity of the services being procured, potentially impacting oversight.

Positive Signals

The contract is awarded to a single entity (V3GATE, LLC), potentially streamlining communication and accountability.
The firm fixed-price contract type provides cost certainty for the government, assuming the scope is well-defined.
The contract duration of nearly four years allows for stable support and planning for the Defense Health Agency.
The award signifies continued investment in IT infrastructure crucial for military healthcare operations.

Sector Analysis

The IT services sector, particularly software maintenance and support, is a significant area of federal spending. This contract falls under the broader category of computer systems design and related services. The federal government is a major consumer of Oracle products and services, often requiring specialized support for large-scale enterprise resource planning (ERP) and database systems. Spending benchmarks for similar Oracle maintenance contracts can vary widely based on the specific products, support tiers, and duration. However, contracts in the tens of millions of dollars annually are common for large federal agencies managing complex IT environments.

Small Business Impact

The provided data indicates that small business set-aside was not utilized for this contract (ss: false, sb: false). This means the contract was not specifically targeted towards small businesses. Consequently, there are no direct subcontracting implications for small businesses mandated by a set-aside. However, the prime contractor, V3GATE, LLC, may still choose to engage small businesses as subcontractors to fulfill parts of the contract, depending on their own business practices and the specific requirements of the work. The absence of a set-aside suggests that the primary focus was on securing the best solution through the chosen competition method, rather than prioritizing small business participation.

Oversight & Accountability

Oversight for this contract will likely be managed by the Defense Health Agency's contracting and program management offices. Accountability measures would typically involve performance work statements, regular progress reports from the contractor, and potentially site visits or audits. Transparency is facilitated through contract databases like FPDS, where basic award information is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected in the procurement or execution of the contract. The fixed-price nature of the contract also provides a degree of financial oversight by setting a ceiling on expenditures.

Related Government Programs

Oracle Database Enterprise Edition
Oracle E-Business Suite
Defense Health Information System (DHIS)
IT Infrastructure Modernization Programs
Software Licensing and Maintenance Contracts
Federal Civilian Health IT Spending

Risk Flags

Limited competition may lead to higher costs.
Potential for vendor lock-in with Oracle software.
Justification for 'exclusion of sources' requires scrutiny.
Scope definition in broad NAICS code could impact oversight.
Long-term reliance on maintenance may hinder modernization.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $109.1 million to V3GATE, LLC. ORACLE SOFTWARE MAINTENANCE AND SUPPORT

Who is the contractor on this award?

The obligated recipient is V3GATE, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Health Agency).

What is the total obligated amount?

The obligated amount is $109.1 million.

What is the period of performance?

Start: 2022-11-29. End: 2026-11-29.

What is the track record of V3GATE, LLC in performing similar large-scale IT maintenance contracts for the federal government?

Assessing the track record of V3GATE, LLC requires a deeper dive into federal procurement databases beyond the provided summary. While V3GATE, LLC is listed as the awardee, information on their past performance, particularly on contracts of this magnitude ($109.2 million) and complexity (Oracle software maintenance for a major agency like DHA), is crucial. Federal agencies typically evaluate past performance as a key factor in contract awards. A review of their contract history would reveal their experience with similar technologies, contract types (firm fixed-price), and agency types (Department of Defense). Without this specific performance data, it's difficult to definitively gauge their capability and reliability for this significant undertaking. Agencies often use sources like the Contractor Performance Assessment Reporting System (CPARS) to document past performance.

How does the per-year cost of this contract compare to industry benchmarks for Oracle software maintenance and support?

The annual cost for this contract averages approximately $27.3 million ($109.2 million / 4 years). To benchmark this against industry standards, one would need to compare it with typical maintenance and support fees for comparable Oracle software suites (e.g., E-Business Suite, Database Enterprise Edition) at similar support levels (e.g., Premier Support). Federal contracts often have unique pricing structures and may include services beyond standard vendor support. A comprehensive comparison would involve analyzing pricing data from other federal agencies for similar Oracle support contracts, as well as consulting industry reports on IT maintenance costs. Factors like the specific modules licensed, the number of users, and the required service level agreements (SLAs) significantly influence pricing. Without access to these comparative data points, it's challenging to definitively state whether this contract represents excellent, fair, or questionable value from a cost perspective.

What specific risks are associated with a 'Full and Open Competition After Exclusion of Sources' procurement method for this contract?

The primary risk associated with 'Full and Open Competition After Exclusion of Sources' is the potential for reduced competition, which can lead to higher prices for taxpayers. This method implies that a broader competition was initially considered but then narrowed down based on specific criteria or justifications. If these justifications are weak or if significant potential bidders were improperly excluded, the government may not have received the most advantageous offers. Another risk is the administrative burden and potential for protests if the exclusion of sources is contested. Ensuring that the exclusion was legally sound and in the best interest of the government is paramount. This procurement approach requires robust documentation and justification to mitigate risks related to fairness and cost-effectiveness.

What is the potential impact of this contract on the Defense Health Agency's ability to adopt newer technologies or alternative solutions in the future?

This contract, focused on maintaining existing Oracle software, could have a mixed impact on the Defense Health Agency's (DHA) ability to adopt newer technologies. On one hand, ensuring the stability and support of current critical systems is essential for ongoing operations. However, long-term, high-value contracts for legacy software maintenance can sometimes create vendor lock-in, making it more challenging and costly to transition to newer, potentially cloud-based or open-source alternatives. The significant investment in Oracle maintenance might divert resources or strategic focus away from exploring and implementing next-generation health IT solutions. The DHA would need to actively manage this contract's lifecycle and concurrently pursue strategies for future technology modernization to avoid being overly constrained by existing commitments.

How does the $109.2 million spending on Oracle maintenance compare to the DHA's overall IT budget or spending on similar software categories?

To assess how the $109.2 million for Oracle maintenance compares to the Defense Health Agency's (DHA) overall IT budget or spending on similar software categories, we would need access to DHA's historical IT budget allocations and detailed spending reports. This contract represents a substantial investment, averaging over $27 million annually. It's crucial to understand the proportion this represents of the DHA's total IT expenditure. For context, federal agencies often spend significant portions of their IT budgets on software licensing, maintenance, and support, especially for enterprise-level systems like those provided by Oracle. Comparing this figure to spending on other major software systems (e.g., electronic health records, enterprise resource planning) or IT infrastructure would provide a clearer picture of its relative importance and financial impact within the DHA's technology ecosystem.

Are there any specific performance metrics or key performance indicators (KPIs) tied to this contract that would allow for objective assessment of V3GATE, LLC's performance?

The provided data does not explicitly detail the performance metrics or Key Performance Indicators (KPIs) associated with this contract. However, for a contract of this size and importance, it is highly probable that a Performance Work Statement (PWS) is included, outlining specific deliverables, service levels, and quality standards. Objective assessment of V3GATE, LLC's performance would rely on these defined metrics, which could include factors like system uptime, response times for support requests, patch deployment success rates, and adherence to security protocols. The Defense Health Agency would typically monitor these KPIs through regular reporting and potentially through contractor performance evaluation systems. Without access to the PWS and associated performance data, a concrete evaluation of the contractor's effectiveness is not possible.

Industry Classification

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

Product/Service Code: IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HT001523R0005

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 555 MIDDLE CREEK PKWY STE 120, COLORADO SPRINGS, CO, 80921

Business Categories: Category Business, Hispanic American Owned Business, Limited Liability Corporation, Minority Owned Business, Partnership or Limited Liability Partnership, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $137,763,139

Exercised Options: $109,119,800

Current Obligation: $109,119,800

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: NNG15SD27B

IDV Type: GWAC

Timeline