DoD's $104M Microsoft Unified Support Contract Lacks Competition, Raises Value Concerns

Contract Overview

Contract Amount: $104,437,925 ($104.4M)

Contractor: Microsoft Corporation

Awarding Agency: Department of Defense

Start Date: 2022-09-26

End Date: 2024-05-31

Contract Duration: 613 days

Daily Burn Rate: $170.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MICROSOFT UNIFIED SUPPORT (MUS)

Place of Performance

Location: REDMOND, KING County, WASHINGTON, 98052

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $104.4 million to MICROSOFT CORPORATION for work described as: MICROSOFT UNIFIED SUPPORT (MUS) Key points: 1. High contract value ($104M) for a single vendor. 2. Sole reliance on Microsoft for unified support limits negotiation leverage. 3. Lack of competition poses a significant risk to achieving best value. 4. IT services sector often sees bundled support contracts, but transparency is key.

Value Assessment

Rating: questionable

The contract's value is difficult to assess without competitive benchmarks. Given the sole-source nature, it's unclear if the pricing reflects market rates or if significant discounts were achieved through negotiation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as competitive pressures are absent.

Taxpayer Impact: The lack of competition means taxpayers may be overpaying for unified support services.

Public Impact

Taxpayers are potentially overpaying for essential software support. Government reliance on a single vendor can stifle innovation and flexibility. Lack of transparency in pricing makes public scrutiny difficult.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for overpayment
Limited vendor options

Positive Signals

Essential IT support for DoD operations
Long-term vendor relationship

Sector Analysis

This contract falls within the IT services sector, specifically custom computer programming and related services. Benchmarks for unified support contracts can vary widely, but competitive bidding typically drives down costs.

Small Business Impact

This contract does not appear to involve small businesses, as it is awarded directly to Microsoft Corporation. There is no indication of subcontracting opportunities for small businesses within this data.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure the pricing is fair and reasonable. Accountability for the decision not to compete is crucial.

Related Government Programs

Custom Computer Programming Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competition
Potential for price inflation
Vendor lock-in
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $104.4 million to MICROSOFT CORPORATION. MICROSOFT UNIFIED SUPPORT (MUS)

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 $104.4 million.

What is the period of performance?

Start: 2022-09-26. End: 2024-05-31.

What is the justification for awarding this contract sole-source instead of competing it?

The justification for a sole-source award typically involves unique capabilities, critical urgency, or a lack of viable alternatives. Without further documentation, it's difficult to ascertain the specific reasons. However, such awards necessitate rigorous justification to ensure taxpayer funds are used efficiently and that competition was genuinely not feasible.

How does the per-unit cost of this support compare to similar contracts or commercial offerings?

A direct per-unit cost comparison is challenging without knowing the specific services included and the volume. However, given the sole-source nature, it is highly probable that the cost is higher than if the contract had been competitively bid. Benchmarking against other government agencies or commercial entities for similar unified support packages would be necessary.

What measures are in place to ensure the effectiveness and value of this support despite the lack of competition?

Effectiveness and value in sole-source contracts rely heavily on robust contract management and performance monitoring. The Department of Defense should have clear performance metrics, regular reviews, and mechanisms for addressing any service deficiencies. Transparency in reporting and regular stakeholder feedback are also critical to ensure value is being delivered.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0003922R7903

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1 MICROSOFT WAY, REDMOND, WA, 98052

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $107,614,825

Exercised Options: $104,614,325

Current Obligation: $104,437,925

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6600119D0019

IDV Type: IDC

Timeline