Department of State spent over $33M on Oracle software licenses via a sole-source BPA

Contract Overview

Contract Amount: $33,207,522 ($33.2M)

Contractor: Affigent, LLC

Awarding Agency: Department of State

Start Date: 2010-05-31

End Date: 2016-05-30

Contract Duration: 2,191 days

Daily Burn Rate: $15.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: DEPARTMENT OF STATE ORACLE ENTERPRISE LICENSE AGREEMENTS UNDER SMARTBUY BPA W91QUZ09A0001 - AWARDED TO TKC INTEGRATION SERVICES LLC

Place of Performance

Location: VERNON HILLS, LAKE County, ILLINOIS, 60061, UNITED STATES OF AMERICA

State: Illinois Government Spending

Plain-Language Summary

Department of State obligated $33.2 million to AFFIGENT, LLC for work described as: DEPARTMENT OF STATE ORACLE ENTERPRISE LICENSE AGREEMENTS UNDER SMARTBUY BPA W91QUZ09A0001 - AWARDED TO TKC INTEGRATION SERVICES LLC Key points: 1. The contract utilized a Blanket Purchase Agreement (BPA) established under a previous solicitation, indicating potential for streamlined procurement. 2. The award was made to TKC Integration Services LLC, suggesting a specific vendor relationship or capability. 3. The contract duration of approximately 6 years (2191 days) allowed for sustained software access. 4. The firm-fixed-price contract type provided cost certainty for the government. 5. The absence of competition raises questions about potential overpayment and lack of market pressure on pricing. 6. The software publishers NAICS code (511210) places this within the software industry.

Value Assessment

Rating: questionable

Benchmarking the value of this Oracle Enterprise License Agreement is challenging without specific details on the software modules and user counts. However, given the sole-source nature of the award, it's difficult to assess if the $33.2 million spent represents a competitive market price. Typically, sole-source contracts can lead to higher costs compared to competitively bid agreements due to the lack of price pressure from multiple vendors. Further analysis would require comparing the per-user or per-module costs against industry benchmarks for similar Oracle enterprise licenses.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a sole-source basis, meaning it was not competed among multiple vendors. The data indicates it was awarded under a Blanket Purchase Agreement (BPA) previously established under solicitation W91QUZ09A0001. While BPAs can offer efficiency, a sole-source award within a BPA limits the opportunity for new vendors to offer their solutions and for the government to benefit from competitive pricing. The lack of competition means the Department of State did not receive multiple price quotes or proposals, potentially missing out on cost savings.

Taxpayer Impact: Taxpayers may have paid a premium for these Oracle software licenses due to the absence of competitive bidding. Without a competitive process, there is less assurance that the government secured the best possible price for the software.

Public Impact

The Department of State benefits from access to Oracle enterprise software licenses, crucial for its IT infrastructure and operations. These licenses likely support various departmental functions, including data management, application hosting, and business process automation. The geographic impact is primarily within the Department of State's operational locations, likely concentrated in Washington D.C. and other federal facilities. The contract supports the IT workforce within the Department of State by providing the necessary tools for their roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings for taxpayers.
Lack of competition may result in above-market pricing for Oracle software licenses.
Contract duration of 6 years could lock the government into specific software versions or vendor support, potentially hindering adoption of newer technologies.

Positive Signals

Utilized a BPA, which can streamline procurement for recurring needs.
Firm-fixed-price contract provides budget certainty.
Award to a specific vendor (TKC Integration Services LLC) suggests a potentially established relationship or specialized capability.

Sector Analysis

This contract falls within the Software Publishers sector (NAICS 511210). The market for enterprise software licenses, particularly from major vendors like Oracle, is characterized by high upfront costs, complex licensing models, and significant vendor lock-in potential. Government spending on enterprise software is substantial, with agencies relying on these solutions for critical operations. Comparable spending benchmarks would typically involve analyzing per-user or per-module costs for similar Oracle products across different federal agencies or large enterprises.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract, nor does it specify subcontracting goals for small businesses. The award was made to TKC Integration Services LLC. Without further information on subcontracting plans or performance, the direct impact on the small business ecosystem is unclear, but the lack of a set-aside suggests it was not specifically targeted to small businesses.

Oversight & Accountability

Oversight for this contract would fall under the Department of State's internal procurement and financial management controls. As a sole-source award under a BPA, the justification for not competing would be subject to review. Transparency is limited by the sole-source nature; however, contract award data is generally available through federal procurement databases. Inspector General jurisdiction would apply if any issues of fraud, waste, or abuse were identified.

Related Government Programs

Department of State IT Modernization Initiatives
Oracle Software Enterprise Agreements
Blanket Purchase Agreements (BPAs)
Software Licensing and Maintenance Contracts

Risk Flags

Sole-source award lacks competitive pricing.
Potential for vendor lock-in with enterprise software.
Lack of specific software details hinders value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $33.2 million to AFFIGENT, LLC. DEPARTMENT OF STATE ORACLE ENTERPRISE LICENSE AGREEMENTS UNDER SMARTBUY BPA W91QUZ09A0001 - AWARDED TO TKC INTEGRATION SERVICES LLC

Who is the contractor on this award?

The obligated recipient is AFFIGENT, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $33.2 million.

What is the period of performance?

Start: 2010-05-31. End: 2016-05-30.

What specific Oracle software products and versions were covered under this $33.2 million agreement?

The provided data identifies the contract as being for 'Oracle Enterprise License Agreements' but does not specify the exact products, modules, or versions included. This level of detail is crucial for a comprehensive value assessment. Oracle offers a vast suite of products, including database software, middleware, enterprise resource planning (ERP) systems, customer relationship management (CRM) tools, and more. Without knowing the specific software, it's impossible to benchmark pricing against industry standards or understand the functional scope of the licenses acquired by the Department of State. Further investigation into contract line item details or associated documentation would be necessary to ascertain the specific software covered.

What was the justification for awarding this Oracle Enterprise License Agreement on a sole-source basis?

The data indicates the contract was 'NOT COMPETED,' implying a sole-source award. The justification for sole-sourcing typically stems from reasons such as the urgency of need, the unavailability of comparable products from other sources, or the existence of a prior contract or agreement that limits competition. In the context of enterprise software licenses, sole-sourcing might be justified if the agency has heavily invested in a particular vendor's ecosystem, requiring specialized support or compatibility that only that vendor can provide. However, such justifications are often scrutinized to ensure they do not circumvent fair competition. The reference to 'SMARTBUY BPA W91QUZ09A0001' suggests this award was made under a pre-existing BPA, which itself might have had specific competitive parameters or limitations that led to this sole-source action.

How does the $33.2 million spending compare to historical Oracle software spending by the Department of State or similar agencies?

Comparing the $33.2 million expenditure requires context regarding the period it covers and the scope of licenses. This contract spanned approximately six years (May 2010 - May 2016). To assess its comparability, one would need to analyze the Department of State's historical spending on Oracle software, looking at trends in license acquisition, maintenance renewals, and support costs. Additionally, benchmarking against other large federal agencies (e.g., DoD, HHS, GSA) that utilize similar Oracle enterprise solutions would provide valuable insights. Without access to detailed historical spending data and specific license metrics (like user counts or processor value units), a precise comparison is difficult. However, the significant dollar amount suggests a substantial investment in Oracle's enterprise software portfolio.

What were the key performance indicators (KPIs) or service level agreements (SLAs) associated with this Oracle license agreement?

The provided data does not include information on Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. Typically, software license agreements, especially those involving enterprise-level deployments, would include terms related to software availability, support response times, patch delivery, and potentially performance guarantees. The absence of this information makes it difficult to assess the vendor's performance and the value delivered beyond simply providing the licenses. Understanding the SLAs would be critical for evaluating whether the Department of State received adequate support and service commensurate with the $33.2 million investment.

What is the potential for vendor lock-in with this type of Oracle enterprise license agreement?

Oracle enterprise license agreements inherently carry a significant risk of vendor lock-in. This is due to the deep integration of Oracle's software into an organization's IT infrastructure and business processes. Migrating away from Oracle products can be technically complex, time-consuming, and extremely costly, often requiring substantial re-engineering of systems and retraining of personnel. The long duration of this contract (6 years) further entrenches the Department of State within the Oracle ecosystem. Without explicit provisions for data portability or interoperability, or a clear exit strategy outlined in the contract, the government may face considerable challenges and expenses if it decides to transition to alternative software solutions in the future.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Nana Regional Corporation Inc (UEI: 079253761)

Address: 13873 PARK CENTER RD STE 127, HERNDON, VA, 20171

Business Categories: Alaskan Native Corporation Owned Firm, Category Business, DoT Certified Disadvantaged Business Enterprise, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Not Designated a Small Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations

Financial Breakdown

Contract Ceiling: $49,178,718

Exercised Options: $33,207,522

Current Obligation: $33,207,522

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91QUZ09A0001

IDV Type: IDC

Timeline