DoD's $17.3M Microsoft software contract for F-35 program awarded to Dell Marketing L.P
Contract Overview
Contract Amount: $17,322,546 ($17.3M)
Contractor: Dell Marketing L.P.
Awarding Agency: Department of Defense
Start Date: 2023-07-01
End Date: 2026-05-31
Contract Duration: 1,065 days
Daily Burn Rate: $16.3K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: MICROSOFT ENTERPRISE BUSINESS SOLUTIONS SOFTWARE PRODUCTS TO SUPPORT F-35 JOINT PROGRAM OFFICE.
Place of Performance
Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $17.3 million to DELL MARKETING L.P. for work described as: MICROSOFT ENTERPRISE BUSINESS SOLUTIONS SOFTWARE PRODUCTS TO SUPPORT F-35 JOINT PROGRAM OFFICE. Key points: 1. Contract awarded through a GSA Federal Supply Schedule (FSS) BPA Call, indicating a pre-competed framework. 2. The contract is for software products, aligning with the IT sector's growing reliance on enterprise solutions. 3. A firm-fixed-price contract type suggests predictable costs for the government, mitigating cost overrun risks. 4. The duration of over 3 years provides stability for the F-35 Joint Program Office's software needs. 5. The award to Dell Marketing L.P. represents a significant portion of the software publishers' market share within defense IT. 6. No small business set-aside was utilized, suggesting the primary focus was on meeting specific technical requirements.
Value Assessment
Rating: good
The contract value of $17.3 million for Microsoft enterprise business solutions software appears reasonable given the scope and duration. Benchmarking against similar large-scale software procurements for major defense programs suggests this is within expected cost ranges. The firm-fixed-price nature of the award helps control costs, and the use of a GSA FSS BPA Call implies that pricing was likely negotiated and vetted at a broader level, contributing to value for money.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under a full and open competition via a GSA Federal Supply Schedule (FSS) Blanket Purchase Agreement (BPA) Call. This means that all responsible sources were permitted to compete. While the specific number of bidders for this BPA Call is not detailed, the FSS process itself is designed to foster competition by establishing pre-negotiated terms and conditions. The use of a BPA Call suggests that the underlying FSS contract underwent a competitive process, and this specific call likely leveraged that established competition.
Taxpayer Impact: Full and open competition, especially through established schedules like GSA FSS, generally leads to better price discovery and ensures taxpayers benefit from competitive market rates for software products.
Public Impact
The F-35 Joint Program Office benefits from access to essential Microsoft software for its operations. This contract ensures the continued availability of critical software supporting the F-35 fighter jet program. The geographic impact is primarily within the Department of Defense's operational and support infrastructure. Workforce implications include IT support personnel and end-users within the F-35 program who rely on these software solutions.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in with Microsoft enterprise solutions, requiring careful management of future software needs.
- Reliance on a single vendor for core enterprise software could pose risks if the vendor's product strategy shifts.
- The scale of the contract may limit opportunities for smaller, specialized software providers to integrate with the F-35 ecosystem.
Positive Signals
- Award to a reputable vendor (Dell Marketing L.P.) with established experience in government IT solutions.
- The use of a firm-fixed-price contract provides cost certainty for the duration of the award.
- Leveraging a GSA FSS BPA Call indicates adherence to established procurement procedures and potentially pre-negotiated favorable terms.
Sector Analysis
This contract falls within the Software Publishers industry (NAICS 511210), a significant segment of the broader Information Technology sector. The IT sector is characterized by rapid innovation and substantial government spending, particularly within defense for mission-critical systems. The market for enterprise business solutions software is large and competitive, with major players like Microsoft dominating. This contract represents a specific application of enterprise software within a high-priority defense program, aligning with overall government IT spending trends focused on modernization and operational efficiency.
Small Business Impact
This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses explicitly detailed in the provided data. The award to Dell Marketing L.P., a large entity, suggests that the primary focus was on fulfilling the extensive software requirements of the F-35 program. While large prime contractors often engage small businesses for subcontracting, the absence of a set-aside indicates that direct opportunities for small businesses to bid on this specific contract were limited. This could mean that the ecosystem of small businesses supporting the F-35 program would likely engage with Dell or other prime contractors indirectly.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices, specifically within the F-35 Joint Program Office. As a GSA FSS BPA Call, there is an inherent level of oversight embedded in the GSA schedule program itself, which vets vendors and pricing. Transparency is facilitated through contract award databases like FPDS. Accountability measures are tied to the firm-fixed-price terms, requiring delivery of specified software products. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.
Related Government Programs
- F-35 Joint Strike Fighter Program
- Department of Defense Enterprise IT Services
- GSA Federal Supply Schedule Contracts
- Microsoft Software Licensing Agreements
- Defense Software Procurement
Risk Flags
- Potential for vendor lock-in
- Dependency on a single software provider
- Complexity of enterprise software licensing
Tags
it, defense, department-of-defense, f-35-program, software-publishers, enterprise-software, gsa-fss, bpa-call, firm-fixed-price, full-and-open-competition, dell-marketing-lp, microsoft
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $17.3 million to DELL MARKETING L.P.. MICROSOFT ENTERPRISE BUSINESS SOLUTIONS SOFTWARE PRODUCTS TO SUPPORT F-35 JOINT PROGRAM OFFICE.
Who is the contractor on this award?
The obligated recipient is DELL MARKETING L.P..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $17.3 million.
What is the period of performance?
Start: 2023-07-01. End: 2026-05-31.
What is the track record of Dell Marketing L.P. in fulfilling similar large-scale software contracts for the Department of Defense?
Dell Marketing L.P. has a substantial track record of providing IT hardware, software, and services to the Department of Defense and other federal agencies. They are a frequent awardee of large contracts, often through GSA schedules, for enterprise solutions. Their experience typically includes delivering a wide range of products, from operating systems and productivity software to specialized business applications. For defense contracts, Dell often partners with software manufacturers like Microsoft to deliver comprehensive solutions. While specific details on past F-35 related software contracts awarded directly to Dell are not in this data snippet, their general history suggests a capacity to manage and deliver on contracts of this magnitude and complexity, adhering to stringent government requirements for security and performance.
How does the pricing of this Microsoft software compare to commercial market rates or other government contracts for similar products?
The pricing for this contract, awarded via a GSA FSS BPA Call, is expected to be competitive, as GSA schedules typically involve pre-negotiated discounts and favorable terms compared to commercial list prices. However, without specific line-item pricing data, a direct comparison is challenging. Enterprise agreements for software like Microsoft's can vary significantly based on the specific products, user counts, licensing models (e.g., perpetual vs. subscription), and support levels. Government-wide agreements or other agency-specific contracts for Microsoft products might offer different pricing structures. Generally, large volume purchases through established government channels aim to achieve significant cost savings over commercial equivalents, but the exact value proposition requires detailed analysis of the specific software licenses and support included.
What are the primary risks associated with this contract, and how are they being mitigated?
Key risks include potential vendor lock-in with Microsoft's ecosystem, which could limit future flexibility and increase long-term costs if alternative solutions become more advantageous. Another risk is the dependency on a single software provider for critical F-35 program functions, which could be impacted by the vendor's product roadmap, support changes, or financial stability. Mitigation strategies likely involve careful contract management, including defining clear deliverables and performance standards, and potentially incorporating clauses for future flexibility or transition support. The firm-fixed-price nature mitigates cost overrun risks. Furthermore, the F-35 JPO likely has internal IT strategies and contingency plans to manage software dependencies and ensure operational continuity.
How effective is the use of GSA FSS BPA Calls for procuring enterprise software for major defense programs like the F-35?
Using GSA FSS BPA Calls for enterprise software procurement, as seen in this contract, is generally considered an effective method for defense programs. It leverages pre-competed contracts (the underlying FSS) and allows agencies to establish specific agreements (BPA Calls) tailored to their needs, often with expedited timelines and established pricing. This approach streamlines the acquisition process, reduces administrative burden, and ensures compliance with federal procurement regulations. For enterprise software, where requirements can be complex and evolve, the flexibility of a BPA allows for adjustments within the scope of the FSS. The competition inherent in the FSS process helps ensure reasonable pricing, making it a valuable tool for programs like the F-35 that require continuous access to essential IT resources.
What are the historical spending patterns for Microsoft enterprise software within the Department of Defense, and how does this contract compare?
The Department of Defense is a massive consumer of IT products and services, including extensive licensing for Microsoft enterprise software, which underpins much of its daily operations and command and control systems. Historical spending patterns show consistent, multi-billion dollar annual expenditures on software licenses, support, and related services across various agencies and programs. This $17.3 million contract for the F-35 JPO is a significant but relatively small component within the DoD's overall IT budget. It aligns with typical spending for enterprise software supporting major weapon systems. Compared to broader DoD-wide Microsoft agreements, this contract is specific in its application and scope, reflecting the ongoing need for updated software solutions to maintain the operational readiness and technological edge of advanced platforms like the F-35.
Industry Classification
NAICS: Information › Software Publishers › Software Publishers
Product/Service Code: IT AND TELECOM - APLLICATIONS
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: Francisco Partners Management, L.P.
Address: ONE DELL WAY, ROUND ROCK, TX, 78682
Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $17,322,546
Exercised Options: $17,322,546
Current Obligation: $17,322,546
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N6600121A0083
IDV Type: BPA
Timeline
Start Date: 2023-07-01
Current End Date: 2026-05-31
Potential End Date: 2026-05-31 00:00:00
Last Modified: 2025-12-01
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