VA awards $81.9M for enterprise-wide PC and monitor refresh to Dell, highlighting a significant investment in IT infrastructure

Contract Overview

Contract Amount: $81,868,888 ($81.9M)

Contractor: Dell Marketing L.P.

Awarding Agency: Department of Veterans Affairs

Start Date: 2013-09-28

End Date: 2017-02-07

Contract Duration: 1,228 days

Daily Burn Rate: $66.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ENTERPRISE-WIDE PC AND MONITOR REFRESH CONTRACT

Place of Performance

Location: ROUND ROCK, WILLIAMSON County, TEXAS, 78682

State: Texas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $81.9 million to DELL MARKETING L.P. for work described as: ENTERPRISE-WIDE PC AND MONITOR REFRESH CONTRACT Key points: 1. The contract value of $81.9 million represents a substantial commitment to upgrading essential IT hardware for the Department of Veterans Affairs. 2. Awarded under full and open competition, this contract suggests a competitive bidding process that likely influenced pricing and vendor selection. 3. The firm-fixed-price structure indicates that the contractor, Dell Marketing L.P., bears the primary risk for cost overruns. 4. The contract duration of 1228 days (approximately 3.3 years) suggests a phased approach to the refresh, allowing for systematic deployment. 5. The North American Industry Classification System (NAICS) code 334111 points to the manufacturing of electronic computers, aligning with the contract's purpose. 6. The contract was awarded via a delivery order, implying it was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle or a similar framework.

Value Assessment

Rating: good

The total award of $81.9 million for an enterprise-wide PC and monitor refresh over approximately 3.3 years appears reasonable given the scope. Benchmarking against similar large-scale IT hardware refresh contracts for federal agencies suggests that pricing for such comprehensive upgrades typically falls within this range. The firm-fixed-price contract type further supports value for money by shifting cost risk to the contractor. Without specific per-unit data, a precise value-for-money assessment is limited, but the overall scale and competitive award suggest a fair market price was likely achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 8 bids (no=8) suggests a healthy level of competition for this significant IT hardware refresh. A competitive environment like this typically drives down prices and encourages vendors to offer their best value propositions, benefiting the agency.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best possible pricing and technology for the VA's critical IT infrastructure needs.

Public Impact

Veterans Affairs employees across various departments and locations will benefit from updated and reliable computing hardware, improving productivity and service delivery. The contract ensures the provision of essential IT equipment, including PCs and monitors, to support the daily operations of the VA. The geographic impact is likely nationwide, covering all VA facilities requiring hardware upgrades. This contract supports jobs within the IT hardware manufacturing and distribution sectors, primarily through Dell Marketing L.P. and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for technology obsolescence if refresh cycles are not consistently maintained beyond this contract's period.
Dependence on a single vendor (Dell) for a large portion of the VA's PC and monitor needs could create future lock-in risks.
The effectiveness of the refresh depends on proper deployment and integration with existing VA IT systems.
Ensuring adequate cybersecurity measures are integrated into the new hardware is crucial.

Positive Signals

Awarded through full and open competition, indicating a robust selection process.
Firm-fixed-price contract shifts cost overrun risk to the contractor.
Significant investment in IT infrastructure demonstrates commitment to operational efficiency.
The contract duration suggests a planned and systematic approach to hardware replacement.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on computer hardware procurement. The market for enterprise IT hardware is large and highly competitive, dominated by major manufacturers like Dell, HP, and Lenovo. Federal agencies are significant buyers in this market, often leveraging large-scale contracts for refreshes and upgrades to maintain operational readiness and employee productivity. The spending benchmark for such contracts can vary widely based on quantity, specifications, and duration, but multi-million dollar awards for agency-wide refreshes are common.

Small Business Impact

This contract was awarded under full and open competition and does not indicate any specific small business set-aside provisions. While Dell Marketing L.P. is a large business, there is no explicit information provided regarding subcontracting plans for small businesses. The impact on the small business ecosystem would depend on whether Dell utilizes small businesses in its supply chain or for any subcontracted services related to deployment or support, which is not detailed in the provided data.

Oversight & Accountability

The contract is subject to standard federal procurement oversight mechanisms. As a firm-fixed-price contract awarded through full and open competition, oversight would focus on delivery timelines, adherence to specifications, and final acceptance of goods. The Department of Veterans Affairs' own contracting officers and potentially its Office of Inspector General would provide oversight. Transparency is generally maintained through contract databases like FPDS, which provide details on awards, though specific performance metrics might be internal.

Related Government Programs

General Services Administration (GSA) Schedule IT Hardware Contracts
Department of Defense (DoD) Enterprise IT Procurement
Other Agency-Specific IT Modernization Initiatives

Risk Flags

Potential for technology obsolescence
Vendor lock-in risk
Integration challenges with existing systems
Cybersecurity vulnerabilities in new hardware

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $81.9 million to DELL MARKETING L.P.. ENTERPRISE-WIDE PC AND MONITOR REFRESH CONTRACT

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 $81.9 million.

What is the period of performance?

Start: 2013-09-28. End: 2017-02-07.

What was the specific unit cost for the PCs and monitors procured under this contract?

The provided data does not include specific per-unit costs for the PCs and monitors. The total award amount of $81.9 million covers the entire enterprise-wide refresh over the contract period. To determine unit costs, one would need the total number of units procured and the breakdown between PCs and monitors. Without this granular data, a precise unit cost benchmark against market rates or similar contracts is not possible. However, the overall contract value suggests a significant volume of hardware was acquired, and the firm-fixed-price nature implies Dell absorbed the risk of fluctuating component costs during the contract's term.

How does the $81.9 million award compare to previous or subsequent PC refresh contracts at the VA?

Comparing this $81.9 million award to previous or subsequent PC refresh contracts at the VA requires access to historical spending data. Without that specific comparative data, it's difficult to definitively state whether this award represents an increase, decrease, or stable spending trend. However, the magnitude of the award suggests a substantial, potentially agency-wide, refresh initiative. Factors influencing such costs include the number of users, the technological specifications required, the duration of the contract, and prevailing market prices for hardware at the time of award. A trend analysis over several years would be necessary to identify patterns in VA's IT hardware investment.

What were the key performance metrics or service level agreements (SLAs) associated with this contract?

The provided data does not detail the specific Key Performance Metrics (KPMs) or Service Level Agreements (SLAs) for this contract. Typically, for IT hardware refresh contracts, SLAs would focus on delivery timelines, equipment functionality, warranty support, and potentially end-of-life disposal services. KPMs might include the percentage of devices deployed on schedule, the rate of hardware failures within a warranty period, or user satisfaction scores post-refresh. The firm-fixed-price nature suggests that meeting delivery and quality specifications would be paramount for the contractor to receive full payment.

What is the typical lifespan of PCs and monitors procured under such federal contracts?

The typical lifespan for PCs and monitors procured under federal contracts, including this VA award, is generally considered to be between 3 to 5 years. This timeframe balances the need for up-to-date technology to maintain productivity and security against the cost of frequent replacements. Agencies often establish refresh cycles based on this expected lifespan, factoring in technological advancements, vendor support availability, and the total cost of ownership. The contract duration of approximately 3.3 years aligns with this typical refresh cycle, suggesting the procured hardware was intended for use within this standard operational window.

Were there any specific cybersecurity requirements mandated for the hardware purchased?

While the provided data does not explicitly list cybersecurity requirements, federal IT hardware procurements, especially for agencies like the Department of Veterans Affairs, invariably include stringent cybersecurity mandates. These typically encompass requirements for hardware-level security features (e.g., Trusted Platform Modules - TPMs), secure boot capabilities, and compliance with federal information processing standards (FIPS). The contract likely stipulated that the delivered hardware must meet or exceed baseline security configurations defined by the VA's IT security policies and potentially NIST guidelines to protect sensitive veteran data.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Dell Technologies Inc. (UEI: 601839660)

Address: ONE DELL WAY, ROUND ROCK, TX, 78682

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $81,868,888

Exercised Options: $81,868,888

Current Obligation: $81,868,888

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA798A11P0280

IDV Type: IDC

Timeline