VA Renews Salesforce Licenses for $30.2M, Affecting Over 83,000 Users

Contract Overview

Contract Amount: $30,258,427 ($30.3M)

Contractor: V3gate, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2017-09-28

End Date: 2019-09-25

Contract Duration: 727 days

Daily Burn Rate: $41.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF THIS ACTION IS FOR THE RENEWAL OF 47680 SALESFORCE SUBSCRIPTION LICENSES AND UPGRADE OF AN ADDITIONAL 35490 SALESFORCE SUBSCRIPTION LICENSES FOR CONTINUED ACCESS TO THE SALESFORCE SOFTWARE INCLUDING CUSTOMER COMMUNITY, CUSTOMER COMMUNITY PLUS, FORCE.COM RESTRICTED AND UNRESTRICTED, WAVE ANALYTICS CLOUD RESTRICTED AND UNRESTRICTED, AND SERVICE CLOUD RESTRICTED AND UNRESTRICTED. SALESFORCE IS A MULTI TENANT ARCHITECTURE PAAS WITH SOFTWARE DELIVERED VIA THE INTERNET THROUGH A SUBSCRIPTION SERVICE DELIVERY MODEL, COMMONLY REFERRED TO AS SAAS. INCLUDED IN THE PAAS AND SAAS ARE SOFTWARE PATCHES, UPDATES, AND HELPDESK SUPPORT IN A FEDRAMP CERTIFIED GOVERNMENT CLOUD TO SUSTAIN VAS SALESFORCE APPLICATION SUITE. VA ALSO REQUIRES ASSOCIATED SOFTWARE MAINTENANCE AND SUPPORT TO ENSURE THE SOFTWARE REMAINS OPERATIONAL. THE PERIOD OF PERFORMANCE SHALL BE 12 MONTHS WITH ONE 12 MONTH OPTION FOR CONTINUED ACCESS TO THE SALESFORCE SUBSCRIPTION SOFTWARE AND ASSOCIATED SOFTWARE MAINTENANCE AND SUPPORT. THIS PROCUREMENT ALSO INCLUDES OPTIONAL QUANTITIES OF THE AFOREMENTIONED LICENSES THAT MAY BE EXERCISED IN BOTH THE BASE AND OPTION PERIOD.

Place of Performance

Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80918

State: Colorado Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $30.3 million to V3GATE, LLC for work described as: IGF::OT::IGF THIS ACTION IS FOR THE RENEWAL OF 47680 SALESFORCE SUBSCRIPTION LICENSES AND UPGRADE OF AN ADDITIONAL 35490 SALESFORCE SUBSCRIPTION LICENSES FOR CONTINUED ACCESS TO THE SALESFORCE SOFTWARE INCLUDING CUSTOMER COMMUNITY, CUSTOMER COMMUNITY PLUS, FORCE.COM RESTRICTED AN… Key points: 1. Significant investment in a widely used SaaS platform for VA operations. 2. Competition was full and open after exclusion of sources, suggesting a structured procurement. 3. Risk of vendor lock-in and potential cost increases with future renewals. 4. IT sector spending, specifically on cloud-based CRM and analytics solutions.

Value Assessment

Rating: good

The contract value of $30.2M for approximately 83,000 licenses over two years appears reasonable given the scope of Salesforce services (CRM, analytics, community). Pricing should be benchmarked against other federal Salesforce contracts and commercial enterprise agreements.

Cost Per Unit: Approximately $182 per user per year (estimated).

Competition Analysis

Competition Level: full-and-open

The procurement method 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' indicates that while other sources were considered, the final award was made under specific conditions. This method aims for competitive pricing but requires justification for excluding certain sources.

Taxpayer Impact: Taxpayer funds are used to ensure VA staff have access to critical software for managing veteran services, aiming for efficient operations.

Public Impact

Ensures continuity of critical VA services reliant on Salesforce for customer relationship management and data analytics. Supports over 83,000 VA users, impacting daily operations and veteran interactions. Provides access to essential tools for community engagement and service delivery.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future renewals.
Dependence on a single vendor for critical software infrastructure.
Need for ongoing monitoring of license utilization and cost-effectiveness.

Positive Signals

Secures essential software for a large user base.
Utilizes a FedRAMP certified government cloud environment.
Includes software updates and support, reducing internal IT burden.

Sector Analysis

This contract falls within the IT sector, specifically for Software as a Service (SaaS) and Platform as a Service (PaaS) solutions. Federal spending on enterprise software like Salesforce is substantial, driven by the need for integrated CRM, data analytics, and citizen engagement platforms.

Small Business Impact

The data does not explicitly mention small business participation. Large enterprise software contracts like this often involve prime contractors who may or may not subcontract to small businesses. Further analysis would be needed to determine SMB involvement.

Oversight & Accountability

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' suggesting a degree of oversight in the procurement process. However, ongoing oversight is crucial to ensure continued value and appropriate license management.

Related Government Programs

Other Computer Related Services
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Vendor Lock-in
Potential for Price Escalation
Reliance on Third-Party Cloud Infrastructure
Data Security and Privacy Concerns
Need for Continuous Software Updates and Patching

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $30.3 million to V3GATE, LLC. IGF::OT::IGF THIS ACTION IS FOR THE RENEWAL OF 47680 SALESFORCE SUBSCRIPTION LICENSES AND UPGRADE OF AN ADDITIONAL 35490 SALESFORCE SUBSCRIPTION LICENSES FOR CONTINUED ACCESS TO THE SALESFORCE SOFTWARE INCLUDING CUSTOMER COMMUNITY, CUSTOMER COMMUNITY PLUS, FORCE.COM RESTRICTED AND UNRESTRICTED, WAVE ANALYTICS CLOUD RESTRICTED AND UNRESTRICTED, AND SERVICE CLOUD RESTRICTED AND UNRESTRICTED. SALESFORCE IS A MULTI TENANT ARCHITECTURE PAAS WITH SOFTWARE DELIVERED VIA THE INTERNET THROUGH A SUBSCRIP

Who is the contractor on this award?

The obligated recipient is V3GATE, LLC.

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 $30.3 million.

What is the period of performance?

Start: 2017-09-28. End: 2019-09-25.

Is the current Salesforce subscription and upgrade cost competitive compared to similar federal agency contracts or commercial enterprise agreements for equivalent services and user counts?

Benchmarking against similar federal contracts and commercial rates is essential. While the contract specifies 'full and open competition after exclusion of sources,' a detailed cost-benefit analysis comparing this award to market rates for Salesforce Enterprise, Unlimited, or specific cloud editions is needed to confirm optimal value. Factors like negotiated discounts, included support levels, and specific feature sets must be considered.

What are the primary risks associated with the long-term reliance on Salesforce for the VA's critical functions, and are mitigation strategies in place?

Key risks include vendor lock-in, potential for significant price escalations upon renewal, and the impact of Salesforce's strategic product roadmap on VA requirements. Mitigation strategies could involve exploring alternative solutions periodically, negotiating multi-year agreements with price caps, and ensuring robust data export capabilities to facilitate future transitions if necessary.

How effectively are the Salesforce licenses being utilized across the VA to ensure the $30.2M investment is maximizing operational efficiency and service delivery?

Effective utilization requires ongoing monitoring of license allocation, feature usage, and user adoption rates. The VA should implement regular audits to identify underutilized licenses or features, reallocate licenses where needed, and provide adequate training to maximize the benefits derived from the platform. This ensures the investment directly supports mission objectives.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: VA11817Q2548

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6060 HOLLOW TREE COURT, COLORADO SPRINGS, CO, 80918

Business Categories: Category Business, Hispanic American Owned Business, Limited Liability Corporation, Minority Owned Business, Partnership or Limited Liability Partnership, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $60,533,133

Exercised Options: $30,258,427

Current Obligation: $30,258,427

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: NNG15SD27B

IDV Type: GWAC

Timeline