DoD's $7.8M Siemens Teamcenter Software Maintenance contract awarded to Sterling Computers Corporation
Contract Overview
Contract Amount: $7,818,486 ($7.8M)
Contractor: Sterling Computers Corporation
Awarding Agency: Department of Defense
Start Date: 2024-12-05
End Date: 2026-12-06
Contract Duration: 731 days
Daily Burn Rate: $10.7K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: SIEMENS TEAMCENTER SOFTWARE MAINTENANCE
Place of Performance
Location: PATUXENT RIVER, SAINT MARYS County, MARYLAND, 20670
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $7.8 million to STERLING COMPUTERS CORPORATION for work described as: SIEMENS TEAMCENTER SOFTWARE MAINTENANCE Key points: 1. Value for money assessed through benchmarking against similar software maintenance agreements. 2. Competition dynamics indicate a full and open competition after exclusion of sources, suggesting a potentially competitive process. 3. Risk indicators include contract duration and the specific nature of software maintenance, which can be prone to price creep. 4. Performance context relies on the successful delivery of software maintenance services by Sterling Computers Corporation. 5. Sector positioning places this contract within the IT services sector, specifically supporting defense-related software needs.
Value Assessment
Rating: fair
The contract value of $7.8 million for two years of Siemens Teamcenter software maintenance appears within a reasonable range for enterprise-level software support. Benchmarking against similar large-scale software maintenance contracts for complex PLM (Product Lifecycle Management) systems suggests that the annual cost is not excessively high. However, without specific details on the scope of support (e.g., number of users, level of support required, included services), a definitive value-for-money assessment is challenging. The firm-fixed-price structure provides cost certainty, but ongoing vigilance is needed to ensure the services delivered align with the price paid.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
This contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This procurement method implies that while the competition was intended to be open, specific sources were excluded, potentially limiting the number of eligible bidders. The exact reasons for exclusion are not detailed, but it suggests a deliberate selection process. The number of bidders is not specified, but the 'limited' nature of the competition could impact price discovery and potentially lead to higher prices compared to a truly unrestricted full and open competition.
Taxpayer Impact: The limited competition may mean taxpayers did not benefit from the lowest possible price that could have been achieved through a broader bidding process. This could result in a higher overall cost for the government.
Public Impact
The Department of Defense benefits from continued access to and support for the Siemens Teamcenter software, crucial for its engineering and product lifecycle management processes. This contract ensures the operational continuity of critical software used in defense projects, supporting design, development, and manufacturing. The geographic impact is primarily within the Department of the Navy's operations, likely supporting personnel and facilities involved in defense acquisition and sustainment. Workforce implications include ensuring that defense engineers and technical staff have reliable access to the necessary software tools, maintaining productivity and project timelines.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in with specialized software maintenance.
- Risk of price increases in future renewals if competition remains limited.
- Dependence on a single contractor for critical software support.
Positive Signals
- Firm-fixed-price contract provides cost predictability.
- Award to an established IT services provider.
- Contract duration allows for stable support over a defined period.
Sector Analysis
This contract falls within the broader IT services sector, specifically focusing on software maintenance and support for Product Lifecycle Management (PLM) software. The market for PLM software and its associated maintenance is significant, driven by industries requiring complex design, engineering, and manufacturing processes, such as aerospace, automotive, and defense. Spending in this area is critical for organizations to maintain the functionality and security of their software investments. Comparable spending benchmarks would involve analyzing other large government contracts for enterprise software maintenance, particularly for specialized engineering or design tools.
Small Business Impact
The data indicates that small business participation was not a primary consideration for this contract, as the 'small business set-aside' field is false. Sterling Computers Corporation, the awardee, is not explicitly identified as a small business in the provided data. Therefore, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. The contract does not appear to be structured to specifically benefit the small business ecosystem.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the program management office within the Department of the Navy. Accountability measures are embedded in the firm-fixed-price contract terms, requiring Sterling Computers Corporation to deliver specified maintenance services. Transparency is facilitated through contract databases like FPDS, which record award details. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.
Related Government Programs
- Defense Software Licensing and Support
- Product Lifecycle Management (PLM) Systems
- IT Services for Department of Defense
- Enterprise Software Maintenance Contracts
- Siemens Software Maintenance Agreements
Risk Flags
- Limited competition may lead to higher costs.
- Potential for service level degradation under fixed-price contract.
- Dependence on a single vendor for critical software support.
Tags
it-services, software-maintenance, department-of-defense, department-of-the-navy, firm-fixed-price, limited-competition, enterprise-software, plm-software, siemens-teamcenter, maryland, other-computer-related-services
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $7.8 million to STERLING COMPUTERS CORPORATION. SIEMENS TEAMCENTER SOFTWARE MAINTENANCE
Who is the contractor on this award?
The obligated recipient is STERLING COMPUTERS 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 $7.8 million.
What is the period of performance?
Start: 2024-12-05. End: 2026-12-06.
What is the track record of Sterling Computers Corporation in providing similar software maintenance services to the federal government?
Sterling Computers Corporation has a history of receiving federal contracts, primarily for IT hardware and software. While specific details on their performance for Siemens Teamcenter software maintenance are not immediately available in this dataset, their past awards suggest experience in fulfilling government IT requirements. A deeper dive into their contract history, including past performance reviews and any reported issues, would be necessary for a comprehensive assessment. Analyzing their success rate in similar maintenance contracts, particularly for complex enterprise software, would provide further insight into their capabilities and reliability in this specific service area.
How does the annual cost of this Siemens Teamcenter maintenance compare to industry benchmarks for similar enterprise software?
The annual cost for this contract is approximately $3.9 million ($7.8M / 2 years). Benchmarking this against industry standards for enterprise PLM software maintenance is complex due to variations in support levels, user counts, and included services. However, for large-scale deployments, annual maintenance fees typically range from 15% to 25% of the initial software license cost. Without knowing the original license cost or the specific support tier, a precise comparison is difficult. Anecdotal evidence suggests that government contracts for specialized enterprise software maintenance can sometimes be at the higher end of this range due to procurement processes and specific requirements. Further analysis would require comparing this rate against publicly available data for similar government or large commercial contracts for Siemens Teamcenter or comparable PLM solutions.
What are the primary risks associated with a two-year firm-fixed-price contract for specialized software maintenance?
A primary risk is the potential for the contractor to provide only the minimum required level of service to maximize profit under the fixed-price structure, potentially impacting the quality or responsiveness of support. Another risk is vendor lock-in; if the government becomes heavily reliant on Sterling Computers for Teamcenter maintenance, future contract renewals could face limited competition and potentially higher prices. Furthermore, if unforeseen technical issues arise with the software that require extensive support beyond the standard maintenance agreement, the fixed-price nature might not adequately cover these emergent needs without renegotiation, potentially leading to disputes or additional costs. Ensuring clear service level agreements (SLAs) and performance metrics is crucial to mitigate these risks.
What is the strategic importance of Siemens Teamcenter software for the Department of Defense, and how does this contract support that?
Siemens Teamcenter is a Product Lifecycle Management (PLM) software that is critical for managing complex engineering data, product designs, and manufacturing processes. For the Department of Defense (DoD), such systems are vital for developing, maintaining, and upgrading sophisticated defense systems, from aircraft to naval vessels. This contract ensures that the DoD has continuous access to and support for this essential software, enabling its engineers and program managers to effectively design, collaborate, and manage the lifecycle of defense assets. Without this maintenance, the software could become outdated, unsupported, and potentially unusable, jeopardizing critical defense programs and innovation.
How has federal spending on 'Other Computer Related Services' (NAICS 541519) evolved, and where does this contract fit within that trend?
Federal spending on 'Other Computer Related Services' (NAICS 541519) has generally shown an upward trend over the past decade, reflecting the increasing reliance of government agencies on a wide array of IT services beyond traditional software development or hardware maintenance. This category often encompasses specialized IT consulting, system integration, data management, and support services. This specific contract for Siemens Teamcenter software maintenance fits within this trend as a specialized support service essential for maintaining critical IT infrastructure. While this single contract is a small part of the overall federal spending in this category, it highlights the ongoing need for specialized software support to ensure the operational effectiveness of complex government systems.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: N6852024R0042
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 303 CENTENIAL DR, NORTH SIOUX CITY, SD, 57049
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business
Financial Breakdown
Contract Ceiling: $33,302,204
Exercised Options: $7,818,486
Current Obligation: $7,818,486
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: NNG15SC89B
IDV Type: GWAC
Timeline
Start Date: 2024-12-05
Current End Date: 2026-12-06
Potential End Date: 2029-12-06 00:00:00
Last Modified: 2025-12-05
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