VA's $12.9M Dell PC Lease Contract: A Look at Enterprise-Wide IT Procurement

Contract Overview

Contract Amount: $12,943,279 ($12.9M)

Contractor: Dell Marketing L.P.

Awarding Agency: Department of Veterans Affairs

Start Date: 2009-01-09

End Date: 2010-01-08

Contract Duration: 364 days

Daily Burn Rate: $35.6K/day

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ENTERPRISE WIDE DELL PC LEASE TO 14

Place of Performance

Location: ROUND ROCK, WILLIAMSON County, TEXAS, 78682

State: Texas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $12.9 million to DELL MARKETING L.P. for work described as: ENTERPRISE WIDE DELL PC LEASE TO 14 Key points: 1. Analysis focuses on the value and performance of a significant IT hardware lease agreement. 2. Examines the competitive landscape for enterprise PC leasing to government agencies. 3. Identifies potential risks and performance indicators associated with long-term hardware leases. 4. Provides context on how this contract fits within the VA's broader IT infrastructure strategy. 5. Assesses the contract's positioning within the IT hardware and services sector.

Value Assessment

Rating: fair

This contract for Dell PCs represents a substantial investment in end-user computing for the VA. Benchmarking against similar enterprise-wide PC leases is challenging without more granular data on specifications and lease terms. However, the fixed price suggests a degree of cost certainty. The value proposition hinges on the total cost of ownership over the lease period, including maintenance, support, and refresh cycles, which are not fully detailed here. Compared to outright purchase, leasing can offer flexibility but may incur higher long-term costs if not managed strategically.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

The competition level for this contract is not specified in the provided data. Typically, large enterprise-wide IT procurements can be competed through various mechanisms, including full and open competition, GSA schedules, or specific government-wide acquisition contracts (GWACs). The number of bidders and the specific solicitation process would determine the extent of price discovery and innovation. Without this information, it's difficult to assess if the VA achieved the best possible pricing and terms.

Taxpayer Impact: The level of competition directly impacts taxpayer value. Robust competition generally leads to lower prices and better terms, ensuring that federal funds are used efficiently. Limited or sole-source awards may result in higher costs for taxpayers.

Public Impact

Veterans Affairs employees benefit from access to updated computing hardware, potentially improving productivity and service delivery. The contract supports the VA's operational needs by providing essential end-user devices. Geographic impact is likely nationwide, covering VA facilities and personnel across the United States. Workforce implications include IT support staff managing the deployment, maintenance, and eventual refresh of these leased PCs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with Dell hardware and services.
Risk of obsolescence if lease terms do not align with technology refresh cycles.
Challenges in managing a large, dispersed fleet of leased devices.
Dependency on Dell for timely support and maintenance, impacting user productivity.
Uncertainty regarding end-of-lease disposition and potential hidden costs.

Positive Signals

Provides access to potentially newer technology compared to aging owned assets.
Fixed pricing offers budget predictability for the lease term.
Leasing can simplify asset management by shifting some responsibility to the vendor.
Standardized hardware can streamline IT support and reduce complexity.
Potential for bundled support and maintenance services to enhance reliability.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on computer hardware procurement and leasing. The market for enterprise IT hardware is dominated by a few major manufacturers, including Dell, HP, and Lenovo. Government agencies often leverage large-scale contracts, sometimes through GSA schedules or direct solicitations, to procure these essential assets. Spending benchmarks for similar enterprise PC leases vary widely based on quantity, specifications, lease duration, and included services, but multi-million dollar agreements are common for large federal agencies like the VA.

Small Business Impact

The provided data does not indicate if this contract included small business set-asides or subcontracting requirements. Large enterprise IT procurements, especially those with major manufacturers like Dell, may not always prioritize small business participation directly, although Dell itself may utilize small businesses in its supply chain or service delivery. Further analysis would be needed to determine the extent of small business involvement and its impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically reside within the Department of Veterans Affairs' procurement and IT management divisions. Accountability measures would include adherence to the contract terms, service level agreements (SLAs) for delivery and support, and financial reporting. Transparency is generally facilitated through contract databases like FPDS-NG, which provide public access to contract awards. Inspector General oversight may be involved if performance issues or potential fraud arise.

Related Government Programs

VA IT Modernization Initiatives
Federal End-User Computing Contracts
GSA IT Schedule Programs
Enterprise Resource Planning (ERP) Systems Support

Risk Flags

Lack of detailed specifications hinders value assessment.
Competition level is unknown, impacting price discovery analysis.
Performance metrics and SLAs are not publicly available.
Limited insight into small business participation.
Potential for higher long-term costs compared to direct purchase.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $12.9 million to DELL MARKETING L.P.. ENTERPRISE WIDE DELL PC LEASE TO 14

Who is the contractor on this award?

The obligated recipient is DELL MARKETING L.P..

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $12.9 million.

What is the period of performance?

Start: 2009-01-09. End: 2010-01-08.

What were the specific technical specifications and configurations of the Dell PCs leased under this contract?

The provided data does not detail the specific technical specifications or configurations of the Dell PCs leased. This information is crucial for a comprehensive value assessment, as it dictates the performance capabilities, intended use cases, and potential for obsolescence. Without knowing if the leased machines were standard desktops, high-performance workstations, or laptops, and their associated components (CPU, RAM, storage), it's difficult to benchmark the lease cost against market rates for comparable hardware. Future analysis should seek to obtain the solicitation document or contract modifications that outline these specifications.

How does the total cost of this lease compare to purchasing similar Dell PCs outright over the same period, considering maintenance and disposal?

Directly comparing the total lease cost ($12.9M over 364 days) to an outright purchase is complex without detailed cost breakdowns for maintenance, support, and end-of-life disposal. Leasing often includes these services, potentially offering a bundled value. However, leasing typically incurs a premium over direct purchase to account for the vendor's residual risk and financing costs. If the VA retained ownership, it would bear the costs of maintenance, potential repairs, and the eventual disposal or resale of the assets. A thorough analysis would require estimating these ownership costs and comparing them to the lease payments.

What were the key performance indicators (KPIs) and service level agreements (SLAs) associated with this Dell PC lease contract?

The provided data does not specify the key performance indicators (KPIs) or service level agreements (SLAs) for this contract. For an enterprise-wide PC lease, critical SLAs would likely include hardware delivery timelines, response times for technical support and repairs, system uptime guarantees, and potentially performance benchmarks for the leased equipment. The absence of this information makes it difficult to assess the contractor's performance and the overall effectiveness of the lease in meeting the VA's operational needs. These details are typically found in the contract's statement of work or performance work statement.

What is the historical spending pattern of the Department of Veterans Affairs on enterprise-wide PC leasing or procurement from Dell?

The provided data only covers a single contract award for $12.9 million with Dell Marketing L.P. for an enterprise-wide PC lease lasting 364 days, awarded in 2009. To understand historical spending patterns, a broader analysis of VA's procurement history for similar IT hardware, specifically from Dell and other vendors, over multiple fiscal years would be necessary. This would involve querying federal procurement databases for contracts related to desktops, laptops, and related leasing services awarded to the VA. Such an analysis could reveal trends in spending, vendor reliance, and shifts in procurement strategies (e.g., from leasing to purchasing).

Were there any identified risks or challenges during the performance of this contract, and how were they mitigated?

The provided data does not contain information regarding specific risks or challenges encountered during the performance of this contract, nor does it detail any mitigation strategies employed. Typical risks associated with large IT hardware leases include delivery delays, hardware failures, inadequate support, cybersecurity vulnerabilities, and issues related to asset management and end-of-lease returns. Without performance reports, contract modifications, or audit findings, it is impossible to assess how effectively these potential risks were managed by either the VA or Dell Marketing L.P. under this specific agreement.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing

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

Contractor Details

Parent Company: Dell Computer Corporation (UEI: 114315195)

Address: ONE DELL WAY, ROUND ROCK, TX, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $12,943,543

Exercised Options: $12,943,279

Current Obligation: $12,943,279

Parent Contract

Parent Award PIID: V200P1869

IDV Type: BPA

Timeline