VA's $42.2M IT equipment lease contract with Dell Marketing L.P. shows long-term vendor relationship

Contract Overview

Contract Amount: $42,219,757 ($42.2M)

Contractor: Dell Marketing L.P.

Awarding Agency: Department of Veterans Affairs

Start Date: 2010-06-30

End Date: 2016-04-05

Contract Duration: 2,106 days

Daily Burn Rate: $20.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: EXPRESS REPORT. THIS PIID REPRESENTS CORRECTIVE INPUTS CAPTURING ALL DATES AND DOLLARS FOR ORDER 01 AS OF MODIFICATION S/A #80 FOR LEASE SERVICES PROVIDING PCS, MONITORS, AND OTHER AUXILLIARY IT EQUIPMENTS.

Place of Performance

Location: ROUND ROCK, WILLIAMSON County, TEXAS, 78682

State: Texas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $42.2 million to DELL MARKETING L.P. for work described as: EXPRESS REPORT. THIS PIID REPRESENTS CORRECTIVE INPUTS CAPTURING ALL DATES AND DOLLARS FOR ORDER 01 AS OF MODIFICATION S/A #80 FOR LEASE SERVICES PROVIDING PCS, MONITORS, AND OTHER AUXILLIARY IT EQUIPMENTS. Key points: 1. The contract, valued at $42.2 million, was awarded to Dell Marketing L.P. for IT equipment leasing. 2. This represents a long-term commitment, with a duration of 2106 days, indicating a stable vendor relationship. 3. The contract was awarded under a full and open competition, suggesting a competitive bidding process. 4. The primary service involves leasing IT equipment, including PCs and monitors, to support VA operations. 5. The firm-fixed-price contract type suggests predictable costs for the government over the contract term. 6. The contract was managed by the Department of Veterans Affairs (VA) and executed in Texas.

Value Assessment

Rating: fair

This contract, valued at over $42 million, was awarded to Dell Marketing L.P. for IT equipment leasing. While the specific per-unit costs are not detailed here, the total value over its extended duration suggests a significant investment. Benchmarking against similar large-scale IT equipment leases would be necessary to fully assess value for money. The long duration (2106 days) might indicate a favorable long-term pricing agreement or a strategic decision to lock in equipment and services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under a 'full and open competition' framework, implying that all responsible sources were permitted to submit a bid. The number of bidders is not specified, but this type of competition generally fosters price discovery and encourages competitive pricing. The fact that it was competed openly suggests the VA sought the best value through a broad market solicitation.

Taxpayer Impact: A full and open competition is beneficial for taxpayers as it increases the likelihood of obtaining competitive pricing and potentially better terms for the leased IT equipment.

Public Impact

Veterans Affairs (VA) personnel benefit from access to necessary IT equipment like PCs and monitors. The contract supports the operational efficiency of the VA by providing essential technology infrastructure. The geographic impact is primarily within Texas, where the contract was executed. The contract ensures that VA staff have up-to-date technology to perform their duties, indirectly benefiting veterans through improved service delivery.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (2106 days) may limit flexibility to adopt newer technologies if needs change.
Reliance on a single vendor for a significant IT equipment lease could pose risks if the vendor faces financial or operational issues.

Positive Signals

Awarded through full and open competition, indicating a potentially competitive price.
Firm-fixed-price contract provides cost certainty for the VA.
Long-term lease may offer predictable budgeting and stable equipment availability.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on the manufacturing and leasing of electronic computer equipment. The IT leasing market is substantial, with government agencies being significant consumers. This contract represents a portion of the VA's broader IT spending, aimed at equipping its workforce. Comparable spending benchmarks would involve analyzing other large federal IT equipment leases and their associated costs per unit or per user.

Small Business Impact

The provided data indicates that small business participation (sb: false) was not a specific set-aside for this contract. There is no explicit information on subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific contract appears limited, as it was awarded to a large corporation (Dell Marketing L.P.) under full and open competition.

Oversight & Accountability

The contract was managed by the Department of Veterans Affairs, which has its own internal oversight mechanisms for procurement and contract management. The firm-fixed-price nature of the contract provides a degree of cost control. Transparency is generally facilitated through public contract databases like FPDS. Specific Inspector General (IG) jurisdiction would typically fall under the VA's Office of Inspector General, which investigates waste, fraud, and abuse in VA programs.

Related Government Programs

IT Equipment Procurement
Leasing Services
Department of Veterans Affairs IT Modernization
Federal IT Infrastructure

Risk Flags

Long contract duration may lead to technology obsolescence.
Potential for vendor lock-in over the lease period.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $42.2 million to DELL MARKETING L.P.. EXPRESS REPORT. THIS PIID REPRESENTS CORRECTIVE INPUTS CAPTURING ALL DATES AND DOLLARS FOR ORDER 01 AS OF MODIFICATION S/A #80 FOR LEASE SERVICES PROVIDING PCS, MONITORS, AND OTHER AUXILLIARY IT EQUIPMENTS.

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 $42.2 million.

What is the period of performance?

Start: 2010-06-30. End: 2016-04-05.

What was the specific breakdown of IT equipment leased under this contract and their respective costs?

The provided data summary indicates the contract was for 'lease services providing PCS, monitors, and other auxiliary IT equipments.' However, a detailed breakdown of the specific quantities and per-unit costs for each type of equipment (PCs, monitors, etc.) is not available in this abbreviated report. Such granular detail would typically be found in the contract's line item details or subsequent modifications, which are not included here. Without this specific information, it is impossible to perform a detailed cost analysis per equipment type.

How does the total contract value of $42.2 million compare to similar IT equipment leasing contracts awarded by the VA or other federal agencies?

Comparing the $42.2 million total contract value requires context regarding the duration and scope. This contract spanned 2106 days (approximately 5.7 years). To benchmark effectively, one would need to identify similar large-scale IT equipment leasing contracts from the VA or other agencies with comparable durations and equipment types. Factors like the number of users supported, the specific models of PCs and monitors, and the inclusion of support services would influence the price. A preliminary assessment suggests that for a multi-year lease of IT equipment for a large agency like the VA, this value is substantial but potentially reasonable if it covers a significant number of endpoints and includes comprehensive service.

What are the potential risks associated with a long-term (2106 days) IT equipment lease contract?

A significant risk with a long-term IT equipment lease is technological obsolescence. Technology evolves rapidly, and equipment leased for nearly six years may become outdated, impacting user productivity and security. Another risk is vendor lock-in; the VA might be tied to Dell Marketing L.P. even if better alternatives or pricing become available elsewhere. Furthermore, if Dell Marketing L.P. experiences financial instability or service disruptions, it could significantly impact the VA's IT operations. Flexibility to adapt to changing needs or upgrade equipment mid-term might also be limited, depending on the contract's specific terms and conditions.

Given the 'full and open competition' award, what does this imply about the pricing and potential savings for taxpayers?

A 'full and open competition' award suggests that multiple vendors had the opportunity to bid on this contract. This process is designed to foster competition, which typically drives down prices and encourages vendors to offer their best terms. Therefore, the pricing achieved under this contract is likely more competitive than if it had been awarded through a sole-source or limited competition. For taxpayers, this implies that the government likely secured a more favorable price for the IT equipment leasing services, maximizing the value of the appropriated funds. However, the actual savings are relative to what might have been paid under less competitive scenarios.

What is Dell Marketing L.P.'s track record with federal IT contracts, particularly with the Department of Veterans Affairs?

Dell Marketing L.P. is a major IT vendor with a substantial history of contracting with the U.S. federal government, including the Department of Veterans Affairs. Data from federal procurement databases typically shows Dell holding numerous contracts across various agencies for hardware, software, and related services. For the VA specifically, Dell has been a consistent provider of IT equipment. This particular contract, valued at $42.2 million over 2106 days, indicates a significant and long-standing business relationship. A deeper dive into Dell's performance history with the VA, including past performance evaluations and any disputes or awards, would provide a more comprehensive view of their track record.

How does the $42.2 million spending on IT equipment leasing fit into the broader context of the VA's overall IT budget and spending patterns?

The $42.2 million expenditure on IT equipment leasing represents a specific component of the VA's overall IT budget. Federal agencies like the VA have substantial IT needs, encompassing hardware, software, cybersecurity, cloud services, and personnel. Leasing IT equipment is a common strategy to manage capital expenditures and ensure access to up-to-date technology without large upfront purchases. To understand its context, this figure should be compared against the VA's total IT spending for the relevant fiscal years (2010-2016). It should also be analyzed alongside other IT procurement methods (e.g., direct purchases) and spending categories to gauge its proportion and strategic importance within the VA's technology infrastructure investments.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

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: Dell Technologies Inc. (UEI: 601839660)

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

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

Financial Breakdown

Contract Ceiling: $43,279,669

Exercised Options: $42,219,757

Current Obligation: $42,219,757

Parent Contract

Parent Award PIID: V200P1869

IDV Type: BPA

Timeline