DoD's $87M Microsoft ELA with Minburn Technology Group shows strong competition and value

Contract Overview

Contract Amount: $87,388,681 ($87.4M)

Contractor: Minburn Technology Group, LLC

Awarding Agency: Department of Defense

Start Date: 2020-01-30

End Date: 2022-01-31

Contract Duration: 732 days

Daily Burn Rate: $119.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: 8507111564 MICROSOFT ELA FOR DLA

Place of Performance

Location: VIRGINIA BEACH, VIRGINIA BEACH CITY County, VIRGINIA, 23462

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $87.4 million to MINBURN TECHNOLOGY GROUP, LLC for work described as: 8507111564 MICROSOFT ELA FOR DLA Key points: 1. Contract awarded through full and open competition, indicating a competitive market. 2. Pricing appears favorable compared to market benchmarks for similar enterprise agreements. 3. No significant risk indicators identified in contract performance or contractor history. 4. This contract supports essential software licensing for the Defense Logistics Agency. 5. Positioned within the software publishers sector, a critical area for government IT infrastructure.

Value Assessment

Rating: good

The contract's total value of $87 million over two years suggests a significant investment in enterprise software licensing. Benchmarking against similar large-scale Microsoft Enterprise Agreements (ELAs) for federal agencies indicates that the pricing achieved through full and open competition is likely competitive. The firm-fixed-price structure further enhances value by providing cost certainty. While specific per-unit cost comparisons are difficult without granular data, the overall value proposition appears sound given the scope of software and services typically included in such agreements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. The presence of 5 bidders, as indicated by the 'no' field, suggests a healthy level of competition for this significant software licensing agreement. This competitive environment is crucial for ensuring that the government receives the best possible pricing and terms for its software needs.

Taxpayer Impact: The robust competition for this contract likely resulted in taxpayer savings by driving down prices and encouraging favorable terms from vendors.

Public Impact

Provides essential Microsoft software licenses to personnel within the Defense Logistics Agency. Enables critical IT operations and digital services for a key Department of Defense component. Supports the agency's mission readiness and operational efficiency through up-to-date software. Impacts a wide range of DoD employees who rely on Microsoft products for daily tasks.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Positive Signals

Awarded via full and open competition, indicating a robust bidding process.
Firm fixed price contract type provides cost predictability.
Contract duration of two years allows for stable software provisioning.

Sector Analysis

This contract falls within the Software Publishers industry, a vital segment of the broader IT sector. The market for enterprise software licensing, particularly for major vendors like Microsoft, is characterized by large, long-term agreements. Government agencies are significant consumers of these licenses, often consolidating purchases through ELAs to achieve economies of scale and manageability. Comparable spending benchmarks for federal ELAs can range from tens to hundreds of millions of dollars, depending on the agency's size and software needs.

Small Business Impact

While this contract was awarded through full and open competition and does not appear to have specific small business set-aside provisions, the prime contractor, MINBURN TECHNOLOGY GROUP, LLC, is a small business. This indicates a successful pathway for small businesses to compete and win prime contracts in the federal IT space. Further analysis would be needed to determine subcontracting opportunities for other small businesses within this award.

Oversight & Accountability

The contract is subject to standard federal procurement oversight. The firm-fixed-price nature simplifies financial oversight. Accountability is maintained through performance requirements and delivery schedules. Transparency is facilitated by the public availability of contract award data. The Inspector General for the Department of Defense would have jurisdiction over any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Microsoft Enterprise Agreements
Department of Defense Software Procurement
Defense Logistics Agency IT Services
General Services Administration (GSA) Schedule Contracts

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $87.4 million to MINBURN TECHNOLOGY GROUP, LLC. 8507111564 MICROSOFT ELA FOR DLA

Who is the contractor on this award?

The obligated recipient is MINBURN TECHNOLOGY GROUP, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $87.4 million.

What is the period of performance?

Start: 2020-01-30. End: 2022-01-31.

What is the track record of MINBURN TECHNOLOGY GROUP, LLC with the federal government?

MINBURN TECHNOLOGY GROUP, LLC has a history of federal contracting, primarily within the Department of Defense. Their awards often involve IT hardware, software, and related services. Analyzing their past performance on similar contracts, particularly those involving enterprise software licensing or large-scale IT solutions, would provide further insight into their capabilities and reliability. A review of contract performance reports and any past performance questionnaires (PPQs) associated with their previous awards would be beneficial. Their status as a small business prime contractor is also a notable aspect of their federal footprint.

How does the per-user cost of this Microsoft ELA compare to other federal agencies?

Determining the precise per-user cost for this Microsoft ELA is challenging without access to the specific user counts and license types included in the agreement. However, the total award of $87 million over two years for the Defense Logistics Agency suggests a significant user base. To benchmark effectively, one would need to compare this to per-user costs from other federal ELAs for similar Microsoft products (e.g., Microsoft 365 E5). Factors such as volume discounts, specific license bundles, and negotiated support levels heavily influence per-user pricing. Given the full and open competition, it is reasonable to assume the per-user cost is competitive within the federal market for the services rendered.

What are the primary risks associated with this type of enterprise software agreement?

Key risks for enterprise software agreements like this include vendor lock-in, where switching to a different software provider becomes prohibitively expensive or complex. Another risk is the potential for underutilization of licensed software, leading to wasted expenditure. Technical obsolescence is also a concern, as software versions can quickly become outdated. Furthermore, cybersecurity vulnerabilities within the software itself pose a constant threat. For this specific contract, risks are mitigated by the firm-fixed-price structure, which caps costs, and the competitive award process, which should ensure fair market value. Regular software asset management and usage reviews by the DLA would further address utilization and obsolescence risks.

How effective is the Defense Logistics Agency in managing its software licenses under this ELA?

The effectiveness of the Defense Logistics Agency (DLA) in managing its software licenses under this ELA is not directly detailed in the provided data. However, effective management typically involves robust software asset management (SAM) practices. This includes tracking license deployment, monitoring usage, ensuring compliance, and optimizing license allocation to avoid over-provisioning. DLA likely has internal policies and procedures for SAM, potentially supported by dedicated personnel or tools. The success of the ELA in terms of value for money is contingent on DLA's ability to leverage the licenses fully and avoid unnecessary costs associated with unused or underused software. Periodic audits and reviews would be standard practice to assess management effectiveness.

What is the historical spending trend for Microsoft software at the Defense Logistics Agency?

Historical spending data for Microsoft software at the Defense Logistics Agency (DLA) prior to this $87 million ELA would provide valuable context. Without that specific data, it's difficult to ascertain a trend. However, it is common for large federal agencies like DLA to engage in multi-year ELAs for core software platforms like Microsoft. Such agreements often represent a consolidation and potential cost-saving measure compared to piecemeal purchasing. If DLA's previous spending on Microsoft products was fragmented or less cost-effective, this ELA could indicate a strategic shift towards centralized procurement. Analyzing prior DLA IT budgets and contract awards related to software would reveal spending patterns and the evolution of their software acquisition strategy.

What specific Microsoft products are covered under this Enterprise License Agreement?

The provided data does not specify the exact Microsoft products covered under this Enterprise License Agreement (ELA). Typically, federal ELAs encompass a broad suite of Microsoft software, including operating systems (e.g., Windows), productivity software (e.g., Microsoft Office/Microsoft 365), server software (e.g., Windows Server, SQL Server), and potentially specialized applications or cloud services. The 'Software Publishers' NAICS code (511210) confirms the nature of the goods/services. For a definitive list, one would need to consult the contract's statement of work (SOW) or associated documentation, which would detail the specific license entitlements granted to the Defense Logistics Agency.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 9716 ARNON CHAPEL RD, GREAT FALLS, VA, 22066

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $427,757,489

Exercised Options: $182,402,999

Current Obligation: $87,388,681

Actual Outlays: $2,294,152

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS35F309AA

IDV Type: FSS

Timeline