DoD's $29M software subscription contract with Metgreen Solutions Inc. shows fair value but limited competition

Contract Overview

Contract Amount: $28,961,880 ($29.0M)

Contractor: Metgreen Solutions Inc

Awarding Agency: Department of Defense

Start Date: 2019-12-12

End Date: 2023-12-12

Contract Duration: 1,461 days

Daily Burn Rate: $19.8K/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: ANNUAL SOFTWARE LICENSE SUBSCRIPTIONS

Place of Performance

Location: OMAHA, DOUGLAS County, NEBRASKA, 68130

State: Nebraska Government Spending

Plain-Language Summary

Department of Defense obligated $29.0 million to METGREEN SOLUTIONS INC for work described as: ANNUAL SOFTWARE LICENSE SUBSCRIPTIONS Key points: 1. The contract's value appears reasonable given the duration and nature of software licensing. 2. Limited competition raises questions about optimal price discovery and potential cost savings. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. Performance is tied to delivery orders, suggesting a phased approach to software deployment. 5. This contract falls within the 'Other Computer Related Services' NAICS code, indicating a broad IT support category. 6. The contract's duration of nearly four years suggests a long-term need for the software.

Value Assessment

Rating: fair

The annual cost of approximately $7.2 million for software licenses appears within a reasonable range for enterprise-level solutions, especially considering the nearly four-year duration. Benchmarking against similar large-scale software subscription contracts is challenging without specific details on the software's functionality and user base. However, the absence of a more competitive bidding process suggests that the government may not have achieved the lowest possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while competition was sought, certain sources were excluded. The presence of only two bidders suggests a limited competitive landscape for this specific requirement. This level of competition may not fully leverage market forces to drive down prices as effectively as a broader solicitation.

Taxpayer Impact: With only two bidders, taxpayers may have missed out on potentially lower prices that could have resulted from a wider range of offers. The limited competition could lead to higher overall spending for the government.

Public Impact

The Department of the Navy benefits from access to essential software licenses, supporting its operational needs. The services delivered are annual software license subscriptions, crucial for ongoing IT functions. The geographic impact is likely nationwide, supporting naval operations across various bases and units. Workforce implications include enabling personnel to utilize necessary software tools for their duties.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may result in higher costs for taxpayers.
Exclusion of sources could prevent potentially better offers from reaching the government.
Lack of detailed performance metrics makes it difficult to assess software utility and value.

Positive Signals

The firm fixed-price contract type protects against cost overruns.
The contract duration suggests a stable, long-term need for the software.
The award was made under a competitive process, albeit with exclusions.

Sector Analysis

This contract falls under the broader IT services sector, specifically 'Other Computer Related Services.' The market for enterprise software licenses is vast and competitive, with numerous vendors offering solutions across various functionalities. The Department of Defense is a significant consumer of IT services and software, often procuring large-scale licenses to support its complex operations. Benchmarking this specific contract's value is difficult without knowing the exact software, but annual subscription costs for enterprise solutions can range from thousands to millions of dollars depending on the scope and user base.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract, nor does it mention subcontracting plans specifically targeting small businesses. Given the nature of enterprise software licensing and the potential scale of such contracts, it is less common for them to be exclusively set aside for small businesses unless the software itself is a niche product developed by a small firm. The impact on the small business ecosystem is likely minimal unless Metgreen Solutions Inc. has a robust small business subcontracting program.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program executive office within the Department of the Navy. Accountability measures are embedded in the contract terms, particularly the firm fixed-price structure and the delivery order system, which allows for monitoring of performance against specific deliverables. Transparency is facilitated through contract databases like FPDS, though detailed justifications for source exclusions are not always publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense IT Services
Navy Software Procurement
Annual Software License Subscriptions
Information Technology Support Services

Risk Flags

Limited competition
Potential for higher costs due to restricted bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.0 million to METGREEN SOLUTIONS INC. ANNUAL SOFTWARE LICENSE SUBSCRIPTIONS

Who is the contractor on this award?

The obligated recipient is METGREEN SOLUTIONS INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $29.0 million.

What is the period of performance?

Start: 2019-12-12. End: 2023-12-12.

What specific software is being licensed under this contract, and what is its primary function for the Department of the Navy?

The provided data does not specify the exact software being licensed. However, the NAICS code '541519 - Other Computer Related Services' suggests it could encompass a wide range of IT support, custom software development, or IT consulting services. The contract's purpose is 'ANNUAL SOFTWARE LICENSE SUBSCRIPTIONS,' indicating that the Department of the Navy is acquiring the right to use specific software for a defined period. Without knowing the software's name or vendor, its precise function and criticality to naval operations cannot be determined from the available information. This lack of specificity hinders a deeper analysis of the contract's value and necessity.

How does the awarded price of $28,961,880 over approximately 4 years compare to market benchmarks for similar enterprise software licenses?

Comparing the awarded price of approximately $28.96 million over 1461 days (roughly 4 years) to market benchmarks for similar enterprise software licenses is challenging without knowing the specific software, its features, the number of users, and the vendor. Enterprise software costs vary dramatically. For instance, a Customer Relationship Management (CRM) suite for a large organization could cost millions annually, while specialized engineering software might have a different pricing structure. The average annual cost here is roughly $7.24 million. If this contract is for a widely used operating system, database, or productivity suite for a large segment of the Navy, this figure might be competitive. However, the limited competition (2 bidders) suggests that a more robust bidding process could potentially have yielded better pricing for the government.

What were the specific reasons for excluding certain sources in the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award?

The specific reasons for excluding certain sources in a 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award are typically detailed in the contract's justification and approval (J&A) document, which is often not publicly released or is redacted. Common reasons for excluding sources in such scenarios include: 1) Only one or a limited number of sources possess the unique capabilities or proprietary technology required; 2) The requirement is a follow-on to a previous contract where only the incumbent contractor has the necessary knowledge or specialized equipment; 3) Urgent and compelling circumstances that do not permit a full and open competition; or 4) Specific statutory restrictions. Without access to the J&A, it's impossible to determine the exact rationale, but it implies that the government believed only the selected bidders could meet the requirement adequately, potentially limiting price discovery.

What is the track record of Metgreen Solutions Inc. in performing similar large-scale IT service contracts for the federal government?

Metgreen Solutions Inc. has a track record of receiving federal contracts, as indicated by this award. However, assessing their performance on 'similar large-scale IT service contracts' requires a deeper dive into their contract history beyond this single data point. Information on past performance, contract values, agencies served, and any reported issues or successes would be necessary. A review of contract databases might reveal if they have a history of delivering complex IT solutions, managing large software licenses, or providing ongoing support services. Without this broader context, it's difficult to definitively gauge their experience and reliability for this specific type of procurement.

Given the $28.96 million total value and a duration of nearly 4 years, what is the implied annual spending trend for this type of software subscription within the Department of the Navy?

The total contract value of $28,961,880 spread over 1461 days (approximately 4 years) implies an average annual spending of roughly $7,240,470 for these software license subscriptions. This figure represents a consistent, significant investment in software resources by the Department of the Navy. It suggests that the Navy has a sustained need for the licensed software, integrating it into its operational workflows. This annual spending level places it within the category of substantial IT procurements, requiring careful management and oversight to ensure continued value for money and alignment with evolving technological needs and budget constraints.

Industry Classification

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

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6426720R0002

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3203 KOENIGSTEIN AVE, NORFOLK, NE, 68701

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $36,849,200

Exercised Options: $28,961,880

Current Obligation: $28,961,880

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SD87B

IDV Type: GWAC

Timeline