OPM's $13.5M Microsoft ELA with Dell: A 6-Year Contract with Questionable Value
Contract Overview
Contract Amount: $13,472,764 ($13.5M)
Contractor: Dell Marketing L.P.
Awarding Agency: Office of Personnel Management
Start Date: 2009-06-30
End Date: 2015-04-10
Contract Duration: 2,110 days
Daily Burn Rate: $6.4K/day
Competition Type: COMPETITIVE DELIVERY ORDER
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: MICROSOFT ELA
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20415, UNITED STATES OF AMERICA
Plain-Language Summary
Office of Personnel Management obligated $13.5 million to DELL MARKETING L.P. for work described as: MICROSOFT ELA Key points: 1. The contract awarded to Dell Marketing L.P. for Microsoft ELA represents a significant expenditure over six years. 2. Competition was limited, with the contract type being a 'Competitive Delivery Order', suggesting potential for better pricing. 3. The lack of small business participation is noted. 4. The sector is IT, specifically Electronic Computer Manufacturing, with a substantial dollar amount. 5. The duration of the contract (2110 days) is considerable.
Value Assessment
Rating: questionable
The $13.5M price tag for a Microsoft ELA over six years warrants scrutiny. Benchmarking against similar enterprise agreements for software licensing is crucial to determine if this represents fair market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
Classified as a 'Competitive Delivery Order', the competition method is not fully detailed. The limited nature of the competition may have impacted price discovery and potentially led to a higher cost than a fully open competition.
Taxpayer Impact: Taxpayer funds are being utilized for this software licensing agreement. The value proposition and cost-effectiveness directly impact the efficient use of these funds.
Public Impact
Federal employees rely on Microsoft software for daily operations, making this ELA critical for agency functionality. The cost of software licensing is a recurring expense for government agencies, impacting IT budgets. The duration of the contract suggests a long-term commitment to specific software, potentially limiting flexibility. The award to a large vendor like Dell highlights the significant role of major IT providers in government procurement.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition
- No small business participation
- Long contract duration
Positive Signals
- Firm Fixed Price contract type
- Delivery Order under a competitive framework
Sector Analysis
This contract falls within the Information Technology sector, specifically related to software licensing for electronic computer manufacturing. Government spending on IT, particularly software, is a substantial portion of the federal budget, with ELAs being a common procurement vehicle.
Small Business Impact
The data indicates no small business participation in this contract. This is a common trend in large IT procurements where specialized software and extensive support requirements may favor larger, established vendors.
Oversight & Accountability
The Office of Personnel Management is responsible for overseeing this contract. Standard procurement regulations and oversight mechanisms should be in place to ensure compliance and value for money.
Related Government Programs
- Electronic Computer Manufacturing
- Office of Personnel Management Contracting
- Office of Personnel Management Programs
Risk Flags
- Limited competition may have inflated costs.
- Lack of small business participation.
- Long contract duration could lead to vendor lock-in or obsolescence.
- Potential for overpayment if not benchmarked effectively.
- Transparency regarding the competitive process is lacking.
Tags
electronic-computer-manufacturing, office-of-personnel-management, dc, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Office of Personnel Management awarded $13.5 million to DELL MARKETING L.P.. MICROSOFT ELA
Who is the contractor on this award?
The obligated recipient is DELL MARKETING L.P..
Which agency awarded this contract?
Awarding agency: Office of Personnel Management (Office of Personnel Management).
What is the total obligated amount?
The obligated amount is $13.5 million.
What is the period of performance?
Start: 2009-06-30. End: 2015-04-10.
What was the specific justification for the 'Competitive Delivery Order' classification, and what measures were taken to ensure robust competition within that framework?
The classification as a 'Competitive Delivery Order' suggests that the contract was awarded under a pre-existing framework or agreement where competition was solicited. However, the specifics of this competition, including the number of bidders and the evaluation criteria, are not detailed. Further inquiry would be needed to understand the extent of price discovery and whether alternative solutions were adequately considered.
How does the $13.5M cost compare to industry benchmarks for similar Microsoft Enterprise Agreements over a six-year period, considering the specific software and user base?
Benchmarking this $13.5M cost against similar Microsoft ELAs is essential for assessing value. Factors like the specific software suite, number of users, support levels, and negotiated discounts significantly influence pricing. Without detailed comparison data, it's difficult to definitively state if this represents a good or fair price, but the 'questionable' rating suggests potential for overpayment.
What is the long-term strategy for software licensing and vendor management, and how does this six-year ELA align with potential future technology shifts or consolidation efforts?
A six-year commitment to a specific software vendor through an ELA requires careful consideration of future technology trends. Agencies must assess if this locks them into outdated technology or prevents adoption of more cost-effective or innovative solutions. The long duration necessitates proactive planning for potential contract renegotiations or transitions to ensure continued alignment with agency needs and technological advancements.
Industry Classification
NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing
Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT
Competition & Pricing
Extent Competed: COMPETITIVE DELIVERY ORDER
Solicitation Procedures: SIMPLIFIED ACQUISITION
Offers Received: 4
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Dell Technologies Inc. (UEI: 601839660)
Address: ONE DELL WAY, ROUND ROCK, TX, 78682
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $13,472,764
Exercised Options: $13,472,764
Current Obligation: $13,472,764
Parent Contract
Parent Award PIID: GS35F4076D
IDV Type: FSS
Timeline
Start Date: 2009-06-30
Current End Date: 2015-04-10
Potential End Date: 2015-04-10 00:00:00
Last Modified: 2015-03-16
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