DoD's DHA Awards $25.3M AWS Credits Contract to Strategic Communications LLC
Contract Overview
Contract Amount: $25,335,318 ($25.3M)
Contractor: Strategic Communications LLC
Awarding Agency: Department of Defense
Start Date: 2025-03-31
End Date: 2026-03-30
Contract Duration: 364 days
Daily Burn Rate: $69.6K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: AMAZON WEB SERVICE CREDITS
Place of Performance
Location: JBSA FT SAM HOUSTON, BEXAR County, TEXAS, 78234
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $25.3 million to STRATEGIC COMMUNICATIONS LLC for work described as: AMAZON WEB SERVICE CREDITS Key points: 1. Significant award for cloud computing services, indicating reliance on AWS. 2. Competition method suggests potential for better pricing, but source exclusion needs scrutiny. 3. Risk of vendor lock-in and cost escalation with cloud credits. 4. IT services sector, specifically cloud infrastructure support.
Value Assessment
Rating: fair
The contract value of $25.3M for AWS credits over one year appears high. Benchmarking against similar large-scale cloud credit procurements is difficult without detailed usage breakdowns, but the price per unit is not provided, making direct comparison challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which implies a limited competition. This method can lead to higher prices if the exclusion was not fully justified, as it restricts the pool of potential bidders.
Taxpayer Impact: Taxpayer funds are being used for cloud services. The effectiveness of the competition method in securing the best value for taxpayers is questionable due to the limited nature of the bidding process.
Public Impact
Government reliance on major cloud providers like AWS continues to grow. Potential for cost savings through strategic negotiation of cloud credits. Ensuring fair competition and avoiding excessive spending on cloud services is crucial. Impact on smaller cloud service providers who may be excluded from such contracts.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition raises concerns about price reasonableness.
- Lack of per-unit cost benchmark hinders value assessment.
- Potential for cost overruns if credit usage is not managed effectively.
Positive Signals
- Awarded to a single entity, potentially simplifying contract management.
- Fixed-price contract provides some cost certainty.
Sector Analysis
This contract falls within the IT services sector, specifically focusing on cloud computing infrastructure. Spending benchmarks for cloud credits vary widely based on usage and negotiated discounts, but $25.3M represents a substantial investment.
Small Business Impact
The contract does not indicate any specific set-asides for small businesses. The nature of large cloud credit procurements often favors established providers or resellers, potentially limiting opportunities for small businesses in this specific award.
Oversight & Accountability
Oversight will be critical to ensure the AWS credits are utilized efficiently and effectively, preventing waste. The DHA must monitor usage against the awarded amount and ensure the 'exclusion of sources' was justified to maintain accountability.
Related Government Programs
- Other Computer Related Services
- Department of Defense Contracting
- Defense Health Agency Programs
Risk Flags
- Limited competition may result in suboptimal pricing.
- Lack of detailed usage data makes value assessment difficult.
- Potential for vendor lock-in with a single cloud provider.
- Risk of unused or underutilized credits leading to waste.
- Need for strong oversight to ensure effective utilization.
Tags
other-computer-related-services, department-of-defense, tx, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $25.3 million to STRATEGIC COMMUNICATIONS LLC. AMAZON WEB SERVICE CREDITS
Who is the contractor on this award?
The obligated recipient is STRATEGIC COMMUNICATIONS LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Health Agency).
What is the total obligated amount?
The obligated amount is $25.3 million.
What is the period of performance?
Start: 2025-03-31. End: 2026-03-30.
What was the justification for excluding other sources in this full and open competition, and how does it ensure fair pricing?
The justification for excluding other sources is not detailed in the provided data. Typically, such exclusions are based on specific technical requirements, existing infrastructure compatibility, or unique service offerings. Without this justification, it's difficult to assess if the limited competition truly served the government's best interest or potentially led to a higher price than a broader competition might have yielded.
How will the Defense Health Agency ensure that the $25.3M in AWS credits are used cost-effectively and not subject to price creep?
Effective cost management will require robust internal controls and monitoring by the DHA. This includes tracking credit utilization against projected needs, negotiating favorable terms for future credit purchases, and potentially exploring alternative cloud solutions or on-premises options if costs become prohibitive. Regular performance reviews with Strategic Communications LLC are also essential.
What is the expected impact of this large AWS credit award on the broader IT services market, particularly for competitors to AWS?
This significant award reinforces AWS's dominant position in the government cloud market. It may make it more challenging for competing cloud providers to gain market share within the DoD, especially for services that are tightly integrated with AWS. However, it could also spur innovation from competitors seeking to offer differentiated services or more attractive pricing models.
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 › IT AND TELECOM - STORAGE
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: HT001525Q0009
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 310 EVERGREEN RD # 100, LOUISVILLE, KY, 40243
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Joint Venture Women Owned Small Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, Indian (Subcontinent) American Owned Business, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business
Financial Breakdown
Contract Ceiling: $25,335,318
Exercised Options: $25,335,318
Current Obligation: $25,335,318
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: NNG15SC90B
IDV Type: GWAC
Timeline
Start Date: 2025-03-31
Current End Date: 2026-03-30
Potential End Date: 2026-03-30 00:00:00
Last Modified: 2025-03-28
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