IRS Spends $24.18M on Microsoft Licenses via Softchoice Corp Under Full and Open Competition
Contract Overview
Contract Amount: $24,176,541 ($24.2M)
Contractor: Softchoice Corp
Awarding Agency: Department of the Treasury
Start Date: 2014-06-19
End Date: 2016-06-19
Contract Duration: 731 days
Daily Burn Rate: $33.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: MICROSOFT SOFTWARE LICENSES AND SUBSCRIPTIONS FOR IRS
Place of Performance
Location: CHICAGO, COOK County, ILLINOIS, 60654
State: Illinois Government Spending
Plain-Language Summary
Department of the Treasury obligated $24.2 million to SOFTCHOICE CORP for work described as: MICROSOFT SOFTWARE LICENSES AND SUBSCRIPTIONS FOR IRS Key points: 1. Significant expenditure on essential software for a major government agency. 2. Competition was open, suggesting potential for competitive pricing. 3. Risk is moderate, tied to software vendor lock-in and future upgrade costs. 4. IT sector spending, common for government operations.
Value Assessment
Rating: good
The $24.18 million contract for Microsoft licenses and subscriptions appears reasonable given the duration and the nature of enterprise software. Benchmarking against similar large-scale government software procurements would provide a more precise valuation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This method generally promotes price discovery and competitive pricing, although specific pricing details are not provided.
Taxpayer Impact: Taxpayer funds are utilized for essential software supporting IRS operations. The competitive nature of the award aims to ensure efficient use of these funds.
Public Impact
Ensures IRS employees have access to necessary Microsoft software for tax administration. Supports critical IT infrastructure for a vital government function. The use of established software vendors like Microsoft is common across government.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in with Microsoft products.
- Future costs for upgrades and new versions not detailed.
- Reliance on a single software provider.
Positive Signals
- Awarded through full and open competition.
- Supports critical government operations.
- Firm fixed price contract limits cost escalation.
Sector Analysis
This contract falls within the Information Technology sector, specifically software licensing. Government spending on IT, including software, is substantial and ongoing, driven by the need for modern operational capabilities and cybersecurity.
Small Business Impact
While the award was under full and open competition, it's unclear if small businesses participated as subcontractors or prime vendors. Large software license agreements often favor established resellers.
Oversight & Accountability
The contract was awarded by the Department of the Treasury for the IRS, indicating standard procurement processes. Oversight would involve monitoring software usage, license compliance, and vendor performance.
Related Government Programs
- Computer and Software Stores
- Department of the Treasury Contracting
- Internal Revenue Service Programs
Risk Flags
- Vendor lock-in
- Potential for future cost increases
- Reliance on a single software ecosystem
- Limited visibility into per-unit costs
Tags
computer-and-software-stores, department-of-the-treasury, il, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $24.2 million to SOFTCHOICE CORP. MICROSOFT SOFTWARE LICENSES AND SUBSCRIPTIONS FOR IRS
Who is the contractor on this award?
The obligated recipient is SOFTCHOICE CORP.
Which agency awarded this contract?
Awarding agency: Department of the Treasury (Internal Revenue Service).
What is the total obligated amount?
The obligated amount is $24.2 million.
What is the period of performance?
Start: 2014-06-19. End: 2016-06-19.
What is the total cost of ownership for these Microsoft licenses over their lifecycle, including support and future upgrades?
The provided data only covers the initial procurement cost of $24.18 million for licenses and subscriptions over two years. A comprehensive total cost of ownership analysis would need to factor in ongoing support fees, potential price increases for renewals, and the cost of future software versions or upgrades that the IRS may require.
How does the per-unit cost of these Microsoft licenses compare to other federal agencies or commercial entities?
Without specific per-unit pricing details (e.g., cost per user, per device, or per specific software title), a direct per-unit cost comparison is not possible. Benchmarking would require access to the detailed pricing structure within the contract and comparison with similar volume agreements across government or the commercial sector.
What is the strategy for managing software license compliance and preventing over- or under-licensing?
Effective software license management typically involves regular audits, asset tracking, and clear policies on software deployment. For the IRS, this would likely be managed by their IT asset management team, ensuring that the number of licenses procured aligns with actual user needs and that compliance with Microsoft's licensing terms is maintained throughout the contract period.
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: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Softchoice Corporation (UEI: 202812707)
Address: 314 W SUPERIOR ST, STE 400, CHICAGO, IL, 60654
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $30,734,536
Exercised Options: $27,213,861
Current Obligation: $24,176,541
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: GS35F0196M
IDV Type: FSS
Timeline
Start Date: 2014-06-19
Current End Date: 2016-06-19
Potential End Date: 2016-06-19 00:00:00
Last Modified: 2017-09-19
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