DoD's $23.3M Microsoft Contract for Account Management Lacks Competition
Contract Overview
Contract Amount: $23,327,413 ($23.3M)
Contractor: Microsoft Corporation
Awarding Agency: Department of Defense
Start Date: 2009-09-30
End Date: 2013-09-29
Contract Duration: 1,460 days
Daily Burn Rate: $16.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: ACCOUNT MANAGEMENT AND SUPPORT
Place of Performance
Location: QUANTICO, PRINCE WILLIAM County, VIRGINIA, 22134
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $23.3 million to MICROSOFT CORPORATION for work described as: ACCOUNT MANAGEMENT AND SUPPORT Key points: 1. Significant spending on account management and support services. 2. Solely awarded to Microsoft Corporation, raising competition concerns. 3. Long contract duration (4 years) with a substantial value. 4. Services fall under 'Other Computer Related Services' NAICS code.
Value Assessment
Rating: questionable
The contract value of $23.3M for account management and support over four years appears high, especially given the lack of competitive bidding. Benchmarking against similar IT support contracts would be necessary to determine fair pricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Microsoft Corporation. This limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition likely resulted in a higher price than could have been achieved through a competitive process, impacting taxpayer funds.
Public Impact
Taxpayers may be overpaying for essential account management services due to the absence of competitive bidding. Reliance on a single vendor for critical IT support can create long-term dependencies and limit future flexibility. The Department of Defense is spending a significant amount on software support, potentially diverting funds from other critical areas.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- High contract value
- Lack of competition
- Long contract duration
Positive Signals
- Services provided by a well-established vendor
- Firm fixed price contract type can offer cost predictability
Sector Analysis
The IT services sector, particularly software account management and support, is a significant area of government spending. Benchmarks for similar contracts are often difficult to establish due to vendor-specific licensing and support structures.
Small Business Impact
This contract was awarded directly to Microsoft Corporation and does not indicate any subcontracting opportunities for small businesses. The sole-source nature limits potential for small business participation.
Oversight & Accountability
The lack of competition raises questions about the oversight of this procurement. Further review is needed to understand why this contract was not competed and if adequate justification exists for a sole-source award.
Related Government Programs
- Other Computer Related Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- Potential for overpayment
- Vendor lock-in
- Limited oversight evident
Tags
other-computer-related-services, department-of-defense, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $23.3 million to MICROSOFT CORPORATION. ACCOUNT MANAGEMENT AND SUPPORT
Who is the contractor on this award?
The obligated recipient is MICROSOFT CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $23.3 million.
What is the period of performance?
Start: 2009-09-30. End: 2013-09-29.
What is the justification for awarding this contract on a sole-source basis to Microsoft Corporation, and were alternative solutions considered?
The provided data indicates the contract was 'NOT COMPETED'. A sole-source award typically requires a documented justification, such as the unique capabilities of the vendor or the absence of adequate competition. Without this justification, it's unclear why alternative solutions or a competitive process were not pursued, potentially leading to suboptimal value for the government.
How does the per-unit cost of these services compare to industry benchmarks for similar account management and support contracts, especially considering the lack of competition?
Benchmarking is challenging without specific details on the services provided and their unit breakdown. However, sole-source contracts are inherently at a disadvantage in price discovery compared to competitive ones. The absence of competition suggests the $23.3M price may not reflect the best possible value, and a thorough cost analysis against comparable market rates is warranted.
What is the potential long-term impact of this sole-source award on the Department of Defense's ability to manage its IT infrastructure and vendor relationships effectively?
A long-term sole-source contract can create vendor lock-in, reducing the agency's flexibility and bargaining power in the future. It may also stifle innovation by limiting exposure to alternative technologies or service providers. This dependency could impact the DoD's ability to adapt to evolving IT needs and potentially increase costs over time.
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: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: ONE MICROSOFT WAY, REDMOND, WA, 98052
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $26,202,288
Exercised Options: $23,458,213
Current Obligation: $23,327,413
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W91QUZ09D0038
IDV Type: IDC
Timeline
Start Date: 2009-09-30
Current End Date: 2013-09-29
Potential End Date: 2013-09-29 00:00:00
Last Modified: 2022-02-09
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