DoD's $20.45M AWS GovCloud contract for cloud infrastructure services awarded to Amazon Web Services

Contract Overview

Contract Amount: $20,450,000 ($20.4M)

Contractor: Amazon WEB Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-08-22

End Date: 2026-08-31

Contract Duration: 739 days

Daily Burn Rate: $27.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: 3.1 AWS GOVCLOUD IL-4/5 CLOUD NRDE

Place of Performance

Location: SEATTLE, KING County, WASHINGTON, 98109

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $20.4 million to AMAZON WEB SERVICES, INC. for work described as: 3.1 AWS GOVCLOUD IL-4/5 CLOUD NRDE Key points: 1. Value for money assessed against comparable cloud service contracts. 2. Competition dynamics indicate a robust market for cloud infrastructure. 3. Risk indicators include potential vendor lock-in and data security considerations. 4. Performance context relies on AWS's established track record in government cloud. 5. Sector positioning places this contract within the broader IT and cloud services market.

Value Assessment

Rating: good

The contract value of $20.45 million for cloud infrastructure services appears reasonable when benchmarked against similar government cloud agreements. Amazon Web Services (AWS) is a leading provider, and their pricing is generally competitive within the market. The firm-fixed-price structure helps manage cost certainty for the Department of Defense. However, a detailed cost-benefit analysis comparing specific service tiers and usage projections against alternative providers would offer a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The specific number of bidders is not detailed, but the 'full and open' designation implies a competitive process. This level of competition is generally favorable for price discovery and ensuring the government receives competitive pricing for cloud services.

Taxpayer Impact: A full and open competition process helps ensure taxpayer dollars are used efficiently by fostering a competitive environment that drives down costs.

Public Impact

The Department of Defense benefits from access to secure and scalable cloud infrastructure. Services delivered include computing, data processing, and web hosting capabilities. Geographic impact is national, supporting DoD operations across various locations. Workforce implications may involve training and upskilling personnel to manage cloud environments.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with a single cloud provider.
Reliance on AWS for critical data security and compliance.
Scalability costs need careful monitoring to avoid overspending.

Positive Signals

Leverages a proven and widely adopted cloud platform (AWS GovCloud).
Firm-fixed-price contract provides cost predictability.
Supports IL4/IL5 security requirements, crucial for defense data.

Sector Analysis

The market for cloud computing services, particularly within the government sector, is highly dynamic and dominated by a few major players. This contract falls under the broader IT services sector, specifically focusing on Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) offerings. Government adoption of cloud solutions is a significant trend, driven by the need for agility, scalability, and cost efficiency. Comparable spending benchmarks would involve analyzing other large-scale cloud contracts awarded by federal agencies to providers like Microsoft Azure and Google Cloud.

Small Business Impact

This contract does not appear to have a specific small business set-aside. While Amazon Web Services, Inc. is a large business, the nature of large-scale cloud infrastructure services often favors established providers. There is no explicit information regarding subcontracting plans for small businesses within this BPA call. The impact on the small business ecosystem would likely be indirect, potentially through opportunities with prime contractors or by enabling smaller DoD components to leverage cloud services.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are embedded in the contract terms, including performance standards and reporting requirements. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

General Services Administration (GSA) Cloud IT Schedule
Defense Information Systems Agency (DISA) Cloud Services
Other agency-specific cloud computing contracts

Risk Flags

Vendor Lock-in
Data Security and Compliance
Cost Management and Optimization
Performance and Availability Risks

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.4 million to AMAZON WEB SERVICES, INC.. 3.1 AWS GOVCLOUD IL-4/5 CLOUD NRDE

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 $20.4 million.

What is the period of performance?

Start: 2024-08-22. End: 2026-08-31.

What is Amazon Web Services' track record with the Department of Defense for cloud services?

Amazon Web Services (AWS) has a significant and established track record with the Department of Defense (DoD) and other federal agencies. They are a primary provider of cloud computing services, including their AWS GovCloud regions, which are specifically designed to meet the stringent compliance and security requirements of government entities. AWS has been awarded numerous contracts across various branches of the DoD for a wide range of applications, from data analytics and storage to mission-critical systems. Their experience includes supporting sensitive workloads at Impact Levels (IL) 2, 4, and 5, as indicated by this contract's mention of IL4/5. This extensive history suggests a deep understanding of government needs, security protocols, and operational demands within the defense sector.

How does the pricing of this AWS GovCloud contract compare to similar government cloud contracts?

Benchmarking the pricing of this specific AWS GovCloud contract requires access to detailed pricing schedules and usage data, which are not fully public. However, AWS generally offers competitive pricing within the government cloud market, especially through its GovCloud offerings tailored for federal agencies. The firm-fixed-price (FFP) nature of this BPA call provides cost certainty. When compared to other large government cloud contracts, AWS's pricing is often seen as competitive, particularly when considering the breadth of services and the security certifications (IL4/5) provided. Agencies often leverage GSA schedules or other competitive vehicles to ensure they are obtaining favorable rates. Without direct comparative data on per-unit service costs (e.g., per compute hour, per GB of storage), a definitive comparison is challenging, but AWS is a market leader known for its competitive pricing strategies in the public sector.

What are the primary risks associated with this contract for the Department of the Navy?

The primary risks associated with this AWS GovCloud contract for the Department of the Navy (DoN) include potential vendor lock-in, where migrating away from AWS in the future could be complex and costly. Data security and compliance remain a constant concern; while AWS GovCloud is designed for high security, any breach or misconfiguration could have severe consequences. There's also the risk of cost overruns if usage is not carefully managed and optimized, despite the firm-fixed-price structure for the call itself. Performance degradation or service outages, though infrequent with major providers like AWS, could impact critical DoD operations. Finally, ensuring continued alignment with evolving DoD cybersecurity policies and interoperability with other systems presents an ongoing management risk.

How effective is AWS GovCloud in meeting the specific needs of the Department of Defense?

AWS GovCloud is generally considered highly effective in meeting the specific needs of the Department of Defense (DoD) due to its robust security features, compliance certifications (including FedRAMP High and DoD IL4/5), and scalability. It provides a secure environment for processing, storing, and transmitting controlled unclassified information (CUI) and classified data up to the IL5 level. The platform's flexibility allows the DoD to rapidly deploy and scale resources for various applications, from data analytics and AI/ML workloads to operational command and control systems. Its availability in dedicated U.S. regions enhances data residency and sovereignty. The DoD's extensive use of AWS indicates a high level of perceived effectiveness in supporting its diverse and demanding mission requirements.

What are the historical spending patterns for cloud computing services within the Department of Defense?

Historical spending patterns for cloud computing services within the Department of Defense show a significant and accelerating trend towards cloud adoption over the past decade. Initially cautious, the DoD has increasingly embraced cloud solutions to modernize its IT infrastructure, improve agility, and reduce costs associated with maintaining on-premises data centers. Spending has shifted from traditional IT procurement to cloud services, with major investments in IaaS, PaaS, and SaaS from providers like AWS, Microsoft Azure, and Google Cloud. This includes large, multi-year contracts for secure cloud environments like AWS GovCloud and Azure Government. The DoD's strategic goals, such as Joint All-Domain Command and Control (JADC2), heavily rely on cloud capabilities, indicating continued growth in this spending category.

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: $30,800,000

Exercised Options: $20,450,000

Current Obligation: $20,450,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6600123A0005

IDV Type: BPA

Timeline