State Dept. Spends $89M on Microsoft Licenses via BPA Call, Awarded in 2009

Contract Overview

Contract Amount: $89,112,660 ($89.1M)

Contractor: CDW Government LLC

Awarding Agency: Department of State

Start Date: 2009-12-29

End Date: 2016-09-30

Contract Duration: 2,467 days

Daily Burn Rate: $36.1K/day

Competition Type: NOT COMPETED

Sector: IT

Official Description: BPA CALL S-AQMMA-10-L-0229 UNDER CDWG BPA S-AQMMA-10-A-0057, AWARDED DECEMBER 30, 2009 (EFFECTIVE 12/29/2009) FOR MICROSOFT ENTERPRISE LICENSE AGREEMENT FOR NEW LICENSES AND SOFTWARE ASSURANCE FOR GROWTH OF THE BASELINE.

Place of Performance

Location: VERNON HILLS, LAKE County, ILLINOIS, 60061

State: Illinois Government Spending

Plain-Language Summary

Department of State obligated $89.1 million to CDW GOVERNMENT LLC for work described as: BPA CALL S-AQMMA-10-L-0229 UNDER CDWG BPA S-AQMMA-10-A-0057, AWARDED DECEMBER 30, 2009 (EFFECTIVE 12/29/2009) FOR MICROSOFT ENTERPRISE LICENSE AGREEMENT FOR NEW LICENSES AND SOFTWARE ASSURANCE FOR GROWTH OF THE BASELINE. Key points: 1. Significant expenditure on enterprise software licenses over a multi-year period. 2. Awarded under a pre-existing BPA, limiting initial competition. 3. Long contract duration (2009-2016) may indicate potential for price escalation. 4. Focus on IT infrastructure highlights reliance on commercial software vendors.

Value Assessment

Rating: fair

The total award amount of $89.1M for Microsoft Enterprise Licenses suggests a substantial investment. Benchmarking against similar large-scale government Microsoft agreements is necessary to assess if the pricing was competitive at the time of award and throughout the contract's life.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This BPA call was not competed, relying on an existing BPA. While this can expedite procurement, it limits price discovery and competition for this specific call, potentially leading to less favorable pricing than a fully competed contract.

Taxpayer Impact: Taxpayer funds were used for this significant software acquisition. The lack of competition raises questions about whether the best possible price was secured for the government.

Public Impact

Government reliance on major software vendors like Microsoft for essential IT functions. The long-term nature of such agreements impacts agency IT roadmaps and budgets. Potential for vendor lock-in with enterprise-wide software deployments. Ensuring cost-effectiveness of software licenses is crucial for efficient government operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition for the BPA call
Long contract duration
High dollar value for software licenses

Positive Signals

Utilized an existing BPA for potentially faster acquisition
Secured enterprise-wide software for a large agency

Sector Analysis

This contract falls within the Information Technology sector, specifically software licensing. Government spending on enterprise software is substantial, with major vendors often dominating large agreements. Benchmarks for similar Microsoft Enterprise Agreements would provide context for this expenditure.

Small Business Impact

This contract was awarded to CDW Government LLC, a large reseller, and there is no indication of small business participation. The nature of large enterprise software agreements often favors established large vendors or resellers.

Oversight & Accountability

The award was made under a BPA call, suggesting some level of pre-negotiated terms. However, the lack of competition for this specific call warrants scrutiny regarding oversight of price reasonableness and adherence to procurement regulations.

Related Government Programs

Computer and Software Stores
Department of State Contracting
Department of State Programs

Risk Flags

Lack of Competition
Long Contract Duration
High Dollar Value
Potential for Price Escalation
Limited Transparency on Pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $89.1 million to CDW GOVERNMENT LLC. BPA CALL S-AQMMA-10-L-0229 UNDER CDWG BPA S-AQMMA-10-A-0057, AWARDED DECEMBER 30, 2009 (EFFECTIVE 12/29/2009) FOR MICROSOFT ENTERPRISE LICENSE AGREEMENT FOR NEW LICENSES AND SOFTWARE ASSURANCE FOR GROWTH OF THE BASELINE.

Who is the contractor on this award?

The obligated recipient is CDW GOVERNMENT LLC.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $89.1 million.

What is the period of performance?

Start: 2009-12-29. End: 2016-09-30.

Was the pricing for this Microsoft Enterprise Agreement competitive given the volume and duration?

Assessing the competitiveness requires comparing the per-unit costs and total value against other government-wide Microsoft Enterprise Agreements awarded around 2009-2010. Factors like specific software versions, included Software Assurance, and negotiated discounts would be critical. Without access to detailed pricing schedules and comparative data, it's difficult to definitively state if the price was optimal, though the lack of competition suggests potential for improvement.

What are the risks associated with a non-competed BPA call for such a large software expenditure?

The primary risk is paying a non-competitive price, as the government did not leverage the full potential of market competition to drive down costs. There's also a risk of vendor lock-in, making it difficult and costly to switch software providers later. Furthermore, without a competitive process, there's less assurance that the specific software configuration meets the evolving needs of the agency at the best value.

How effective was this agreement in meeting the Department of State's long-term IT needs?

The effectiveness hinges on whether the acquired Microsoft licenses and software assurance adequately supported the Department of State's operational requirements throughout the contract period (2009-2016). If the software enabled critical functions, facilitated necessary upgrades, and maintained security, it was effective. However, without performance metrics or user feedback, assessing true effectiveness beyond basic provision is challenging.

Industry Classification

NAICS: Retail Trade › Electronics and Appliance Stores › Computer and Software Stores

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Evaluated Preference: NONE

Contractor Details

Parent Company: CDW Corporation (UEI: 808068253)

Address: 230 N MILWAUKEE AVE, VERNON HILLS, IL, 60061

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

Financial Breakdown

Contract Ceiling: $89,112,660

Exercised Options: $89,112,660

Current Obligation: $89,112,660

Parent Contract

Parent Award PIID: SAQMMA10A0057

IDV Type: BPA

Timeline