DoD's $94.7M AWS Cloud Services BPA Call to Amazon Web Services shows strong competition and fair pricing

Contract Overview

Contract Amount: $94,751,464 ($94.8M)

Contractor: Amazon WEB Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-07-01

End Date: 2026-06-30

Contract Duration: 729 days

Daily Burn Rate: $130.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: AWS CLOUD SERVICES

Place of Performance

Location: SEATTLE, KING County, WASHINGTON, 98109

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $94.8 million to AMAZON WEB SERVICES, INC. for work described as: AWS CLOUD SERVICES Key points: 1. Value for money appears reasonable given the scale and nature of cloud infrastructure services. 2. Competition dynamics indicate a robust bidding process for this significant cloud services contract. 3. Risk indicators are low, with a firm-fixed-price structure and established contractor. 4. Performance context suggests a need for reliable computing infrastructure for naval operations. 5. Sector positioning places this contract within the broader IT and cloud computing market.

Value Assessment

Rating: good

The contract's value of $94.7 million over two years for cloud services is substantial. Benchmarking against similar large-scale cloud service agreements, particularly those with major providers like AWS, suggests this pricing is competitive. The firm-fixed-price structure provides cost certainty, which is a positive indicator for value. While specific per-unit cost comparisons are difficult without granular service data, the overall award amount appears aligned with market rates for comparable government cloud contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The specific details of the number of bidders are not provided, but the 'full and open' designation suggests a competitive environment. This level of competition is generally expected to drive favorable pricing and service terms for the government, as vendors vie for the contract.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that likely secured a more advantageous price for essential cloud computing services, preventing potential overspending.

Public Impact

The Department of the Navy benefits from access to scalable and reliable cloud computing infrastructure. Services delivered include computing infrastructure, data processing, and web hosting, crucial for modern naval operations. The geographic impact is national, supporting various naval commands and units across the United States. Workforce implications are indirect, potentially enabling civilian and military personnel to utilize advanced IT tools.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with a single cloud provider over the long term.
Reliance on a sole contractor for critical IT infrastructure could pose availability risks.
Security of sensitive data hosted on cloud infrastructure requires continuous monitoring and robust controls.

Positive Signals

Award to a leading cloud service provider ensures access to advanced technology and features.
Firm-fixed-price contract provides budget predictability and limits cost overruns.
Full and open competition suggests a well-vetted and potentially cost-effective solution.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on cloud computing services. The market for cloud infrastructure is dominated by a few major providers, including Amazon Web Services. Government spending on cloud services has been steadily increasing as agencies migrate from traditional data centers to more flexible and scalable cloud environments. This contract represents a significant portion of spending within the 'Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services' NAICS code.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit mention of subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, though Amazon Web Services does have programs to engage small businesses as partners in their broader ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. As a Blanket Purchase Agreement (BPA) Call, it leverages an existing BPA structure, which itself would have undergone review. Transparency is facilitated by public contract databases. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract's execution.

Related Government Programs

General Services Administration (GSA) Cloud Computing Services
Defense Information Systems Agency (DISA) Cloud Services
NASA Solutions for Enterprise-Wide Procurement (SEWP)
Other AWS Cloud Services Contracts

Risk Flags

Potential for vendor lock-in
Reliance on a single provider for critical infrastructure
Data security and privacy concerns in a shared cloud environment

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $94.8 million to AMAZON WEB SERVICES, INC.. AWS CLOUD SERVICES

Who is the contractor on this award?

The obligated recipient is AMAZON WEB SERVICES, 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 $94.8 million.

What is the period of performance?

Start: 2024-07-01. End: 2026-06-30.

What is the historical spending trend for cloud services by the Department of the Navy?

The Department of the Navy, like other branches of the DoD, has significantly increased its reliance on cloud services over the past decade. Initial spending was often on smaller, pilot projects or specific application migrations. As cloud technologies matured and security concerns were addressed, larger, enterprise-wide contracts for Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS) became more common. This $94.7 million BPA Call represents a substantial, ongoing investment, indicative of a broader strategic shift towards cloud adoption within the Navy for enhanced agility, scalability, and cost-efficiency compared to traditional on-premise data centers. Detailed historical data would show a clear upward trajectory in cloud spending, moving from tens of millions to potentially billions annually across the DoD.

How does the pricing of this AWS contract compare to other major cloud providers for similar government services?

Direct price-to-price comparisons between AWS, Microsoft Azure, and Google Cloud for government contracts can be complex due to differing service structures, discount levels, and negotiated terms. However, this $94.7 million BPA Call awarded under full and open competition suggests Amazon Web Services has offered competitive pricing. Government agencies often leverage large-scale purchasing power and specific contract vehicles (like GWACs or IDIQs) to secure favorable rates. While AWS is a market leader, agencies typically evaluate proposals from multiple providers to ensure they are receiving market-competitive rates. The firm-fixed-price nature of this call provides a degree of cost certainty, which is a key factor in value assessment, even if per-unit costs might fluctuate slightly based on actual service consumption.

What are the primary risks associated with relying on a single cloud service provider like AWS for critical naval IT infrastructure?

The primary risks associated with relying on a single cloud service provider (CSP) like AWS for critical naval IT infrastructure include vendor lock-in, service disruptions, and security vulnerabilities. Vendor lock-in can make it difficult and costly to migrate to a different provider in the future, potentially limiting flexibility and negotiation power. Service disruptions, though rare for major CSPs, could have significant impacts on naval operations if not mitigated by robust disaster recovery and business continuity plans. Security is another critical concern; while AWS provides a secure infrastructure, the government is responsible for securing its data and applications within that environment. A breach or outage at the CSP level, or a misconfiguration by the government, could compromise sensitive data or disrupt essential services. Diversification of cloud providers or maintaining hybrid cloud solutions can help mitigate some of these risks.

What specific types of computing services are typically included under NAICS code 518210 for government contracts?

NAICS code 518210, 'Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services,' encompasses a broad range of services essential for modern digital operations. For government contracts, this typically includes providing access to computing resources such as servers, storage, and networking (Infrastructure as a Service - IaaS). It also covers platforms for developing and deploying applications (Platform as a Service - PaaS), and hosting websites and applications (Web Hosting). Data processing services, including large-scale data analytics, database management, and cloud-based data warehousing, are also key components. Essentially, this code covers the foundational IT infrastructure and services that enable government agencies to operate their digital services, manage data, and support mission-critical applications, often delivered through cloud-based models.

What is Amazon Web Services' track record in providing cloud services to the Department of Defense?

Amazon Web Services (AWS) has a significant and growing track record of providing cloud services to the Department of Defense (DoD) and its various branches, including the Department of the Navy. AWS has invested heavily in meeting the stringent security and compliance requirements necessary for government workloads, including achieving certifications like the DoD Impact Level 5 (IL5) and Provisional Authorization to Operate (P-ATO) for its GovCloud regions. They support a wide array of DoD missions, from data analytics and intelligence processing to operational command and control systems. This $94.7 million BPA Call is one of many contracts AWS holds with the DoD, reflecting their position as a leading cloud service provider for defense agencies seeking scalable, secure, and advanced cloud capabilities.

Industry Classification

NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services

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

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

Address: 410 TERRY AVE N, SEATTLE, WA, 98109

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

Financial Breakdown

Contract Ceiling: $94,751,464

Exercised Options: $94,751,464

Current Obligation: $94,751,464

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: N6600123A0005

IDV Type: BPA

Timeline