DoD's $32.5M Software Maintenance Contract with Solvendum Raises Questions on Value and Competition

Contract Overview

Contract Amount: $32,465,452 ($32.5M)

Contractor: Solventum Health Information Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2009-10-01

End Date: 2014-09-30

Contract Duration: 1,825 days

Daily Burn Rate: $17.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: 3M CARE INNOVATION LICENSED SOFTWARE MNTC/SUPPORT

Place of Performance

Location: SALT LAKE CITY, SALT LAKE County, UTAH, 84123

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $32.5 million to SOLVENTUM HEALTH INFORMATION SYSTEMS, INC. for work described as: 3M CARE INNOVATION LICENSED SOFTWARE MNTC/SUPPORT Key points: 1. The contract awarded to Solvendum Health Information Systems, Inc. for software maintenance and support represents a significant expenditure. 2. Lack of competition is a major concern, potentially leading to inflated prices and reduced innovation. 3. The IT sector, particularly software licensing and support, often presents opportunities for cost savings through competitive bidding. 4. Oversight is crucial to ensure the government receives fair value for its investment in this critical software.

Value Assessment

Rating: questionable

The contract's value of over $32 million for software maintenance and support lacks a clear benchmark due to the absence of competitive bidding. Without comparison to similar contracts or market rates, assessing its fairness is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This significantly limits price discovery and negotiation leverage for the government, potentially resulting in higher costs than if multiple vendors had bid.

Taxpayer Impact: The lack of competition may lead to taxpayers paying more than necessary for this software maintenance and support.

Public Impact

Taxpayers may be overpaying for essential software maintenance due to a lack of competitive bidding. The Department of Defense relies on this software, making its cost and effectiveness critical to operational readiness. Limited competition can stifle innovation and reduce the availability of advanced solutions in the future.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of Competition
Potential for Overpricing
Limited Vendor Options

Positive Signals

Essential Software Maintenance
Long-Term Support Contract

Sector Analysis

The IT sector, specifically software publishers, is characterized by rapid innovation and diverse pricing models. Contracts for maintenance and support can vary widely, making benchmarks essential, especially when competition is absent.

Small Business Impact

The data does not indicate whether small businesses were involved in this contract. Sole-source awards often bypass opportunities for small business participation.

Oversight & Accountability

The absence of competition raises concerns about oversight. Robust oversight is needed to ensure the government is receiving adequate value and that the vendor is meeting all contractual obligations effectively.

Related Government Programs

Software Publishers
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source award lacks competitive pricing.
Potential for overpayment due to lack of market validation.
Limited transparency in pricing justification.
Risk of vendor lock-in and reduced innovation.
Need for enhanced oversight on performance and value.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.5 million to SOLVENTUM HEALTH INFORMATION SYSTEMS, INC.. 3M CARE INNOVATION LICENSED SOFTWARE MNTC/SUPPORT

Who is the contractor on this award?

The obligated recipient is SOLVENTUM HEALTH INFORMATION SYSTEMS, 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 $32.5 million.

What is the period of performance?

Start: 2009-10-01. End: 2014-09-30.

What is the justification for awarding this contract sole-source, and what steps were taken to ensure fair pricing without competition?

The justification for a sole-source award is critical. Agencies must demonstrate that only one responsible source can provide the required supplies or services. Without competition, agencies should conduct thorough market research and potentially use cost-price analysis techniques to validate the reasonableness of the proposed price, ensuring taxpayers are not unduly burdened.

How does the government ensure the effectiveness and quality of software maintenance and support under a sole-source contract?

Ensuring effectiveness and quality in sole-source contracts relies heavily on strong contract management and performance metrics. The government should establish clear performance standards, conduct regular reviews, and utilize user feedback to monitor the vendor's adherence to service level agreements. Robust communication channels and defined escalation procedures are also vital.

What is the long-term strategy for acquiring this software maintenance and support to potentially introduce competition in the future?

A long-term strategy should involve planning for future procurements to foster competition. This could include breaking down the contract into smaller, more manageable components, exploring alternative solutions, or conducting market research to identify potential new vendors. Phased transitions or competitive follow-on contracts can encourage market entry and innovation.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

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

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

Parent Company: 3M Company (UEI: 006173082)

Address: 575 MURRAY BLVD, SALT LAKE CITY, UT, 90

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: $32,465,452

Exercised Options: $32,465,452

Current Obligation: $32,465,452

Contract Characteristics

Cost or Pricing Data: NO

Timeline