DoD awards $92.6M IDIQ for VMware software, with Carahsoft Technology Corp. as the sole provider

Contract Overview

Contract Amount: $92,656,817 ($92.7M)

Contractor: Carahsoft Technology Corp

Awarding Agency: Department of Defense

Start Date: 2025-01-22

End Date: 2026-07-22

Contract Duration: 546 days

Daily Burn Rate: $169.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IN SUPPORT OF CHESS IN CONJUNCTION WITH HQDA OCIO, ACC-RI HEREBY ACCEPTS AND INCORPORATES CARAHSOFT TECHNOLOGY CORP. FOR REQUEST FOR PROPOSAL W519TC-25-R-6129 AND HEREBY AWARDS THIS SINGLE, IDIQ FFP CONTRACT W519TC-25-D-0012 FOR VMWARE BY BROADCOM

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $92.7 million to CARAHSOFT TECHNOLOGY CORP for work described as: IN SUPPORT OF CHESS IN CONJUNCTION WITH HQDA OCIO, ACC-RI HEREBY ACCEPTS AND INCORPORATES CARAHSOFT TECHNOLOGY CORP. FOR REQUEST FOR PROPOSAL W519TC-25-R-6129 AND HEREBY AWARDS THIS SINGLE, IDIQ FFP CONTRACT W519TC-25-D-0012 FOR VMWARE BY BROADCOM Key points: 1. This contract focuses on essential software licensing and support, indicating a critical need for VMware by Broadcom within Army IT infrastructure. 2. The award to Carahsoft Technology Corp. suggests a reliance on established vendors for specialized software solutions. 3. The single-award nature of this IDIQ contract warrants scrutiny regarding potential price escalations and limited market engagement. 4. The contract duration of 546 days points to a medium-term need for these software services. 5. The absence of small business set-asides indicates the contract likely targets large, established software publishers. 6. The contract's value of over $92 million highlights the significant investment in enterprise software by the Department of the Army.

Value Assessment

Rating: questionable

The contract value of $92.6 million for VMware by Broadcom software over approximately 1.5 years is substantial. Benchmarking this against similar IDIQ contracts for enterprise software licenses and support is challenging without more specific details on the software versions and support levels. However, the lack of competition raises concerns about whether the government is achieving the best possible price. The per-unit cost is not readily available, but the overall value suggests a significant investment in maintaining critical IT infrastructure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source IDIQ, meaning it was not competed. This approach is typically used when a specific vendor or product is uniquely required, or when market research indicates only one source can meet the requirement. The lack of competition means that potential alternative vendors or more cost-effective solutions were not explored through a competitive bidding process. This can limit price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced likelihood of benefiting from competitive pricing that could drive down costs. The government may be paying a premium due to the absence of competing bids.

Public Impact

The Department of the Army's IT infrastructure and operations are the primary beneficiaries, ensuring continued access to critical VMware software. This contract supports the delivery of essential software licenses and technical support services. The geographic impact is likely nationwide, supporting Army installations and personnel across various locations. Workforce implications may include IT personnel responsible for managing and maintaining the VMware environment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Lack of competition may reduce incentives for the contractor to offer the most favorable terms.
Reliance on a single vendor for critical software can create vendor lock-in and limit future flexibility.
The specific software versions and support levels are not detailed, making it difficult to assess true value for money.
The contract's significant value raises questions about the necessity and scope of the software requirements.

Positive Signals

Ensures continuity of essential IT services by providing access to critical VMware software.
Award to a known entity, Carahsoft Technology Corp., may streamline procurement and delivery processes.
The IDIQ structure allows for flexibility in ordering as needs arise over the contract period.
The contract supports the Army's stated IT modernization and operational requirements.

Sector Analysis

This contract falls within the Software Publishers industry, a segment of the broader IT sector. The market for enterprise virtualization software, such as VMware, is dominated by a few key players. Spending in this area is critical for government agencies to maintain secure, efficient, and scalable IT infrastructures. Comparable spending benchmarks for enterprise software licenses and support can vary widely based on the specific products, quantities, and support tiers involved. The government often procures such software through IDIQ contracts or GSA schedules to leverage existing relationships and streamline acquisition.

Small Business Impact

This contract does not appear to include any small business set-asides, as indicated by 'sb': false. The award to Carahsoft Technology Corp., a large reseller, suggests that the primary focus is on acquiring specific software from a major publisher. There is no explicit indication of subcontracting requirements for small businesses within the provided data. This means that the direct economic impact on the small business ecosystem from this specific contract is likely minimal, unless Carahsoft has its own internal small business subcontracting initiatives.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures would be tied to the terms and conditions of the IDIQ contract, including delivery schedules and performance standards. Transparency is facilitated through contract award databases, though detailed justifications for sole-source awards may not always be publicly accessible. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

CHESS (Computer Hardware, Enterprise Software and Solutions)
Army IT Modernization Programs
Enterprise Software Licensing
Virtualization Software Procurement
Department of Defense IT Spending

Risk Flags

Sole-source award
Lack of competition
Potential for overpayment
Vendor lock-in risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $92.7 million to CARAHSOFT TECHNOLOGY CORP. IN SUPPORT OF CHESS IN CONJUNCTION WITH HQDA OCIO, ACC-RI HEREBY ACCEPTS AND INCORPORATES CARAHSOFT TECHNOLOGY CORP. FOR REQUEST FOR PROPOSAL W519TC-25-R-6129 AND HEREBY AWARDS THIS SINGLE, IDIQ FFP CONTRACT W519TC-25-D-0012 FOR VMWARE BY BROADCOM

Who is the contractor on this award?

The obligated recipient is CARAHSOFT TECHNOLOGY CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $92.7 million.

What is the period of performance?

Start: 2025-01-22. End: 2026-07-22.

What is the specific justification for awarding this contract as sole-source to Carahsoft Technology Corp. for VMware by Broadcom software?

The provided data indicates the contract was awarded as 'NOT COMPETED' and is a 'sole-source' type. While the specific justification is not detailed in the abbreviated data, sole-source awards are typically made when a particular product or service is uniquely available from a single source, or when the government determines that only one source can meet the requirement. For specialized software like VMware by Broadcom, this could be due to proprietary technology, existing infrastructure dependencies, or specific licensing agreements that limit distribution channels. Agencies must document a compelling reason for not conducting a full and open competition, often citing urgency, unique capabilities, or lack of viable alternatives. Without further documentation, it's presumed that the Army's contracting officers determined that Carahsoft was the only entity capable of fulfilling this specific requirement for VMware by Broadcom software under the given terms.

How does the $92.6 million contract value compare to historical spending on similar VMware software by the Department of the Army?

Comparing the $92.6 million contract value to historical spending requires access to historical contract data for the Department of the Army specifically for VMware software. The provided data only includes details for this single IDIQ contract. To perform a historical comparison, one would need to query databases like FPDS or USAspending for previous awards to Carahsoft Technology Corp. or directly to VMware/Broadcom for similar software licenses and support over past fiscal years. Factors such as the number of users, specific product versions (e.g., vSphere, Horizon), support levels (e.g., standard, premier), and contract types (e.g., IDIQ, BPA, direct purchase) would need to be considered for an accurate apples-to-apples comparison. Without this historical context, it is difficult to ascertain if this award represents an increase, decrease, or stable level of spending.

What are the potential risks associated with a sole-source award for critical enterprise software like VMware?

The primary risk associated with a sole-source award for critical enterprise software like VMware is the lack of price competition. This can lead to the government paying a premium compared to what might be achieved in a competitive environment. Another significant risk is vendor lock-in, where the agency becomes heavily reliant on a single vendor's technology and pricing structure, making it difficult and costly to switch to alternative solutions in the future. Furthermore, sole-source contracts may offer less incentive for the contractor to provide exceptional service or innovative solutions, as the competitive pressure is absent. There's also a risk that the scope of work or the specific software versions procured might not be the most efficient or cost-effective options available in the broader market.

What is the role of Carahsoft Technology Corp. in this contract, and how does it differ from a direct award to VMware/Broadcom?

Carahsoft Technology Corp. acts as a technology reseller and aggregator. In this contract, they are likely facilitating the procurement of VMware by Broadcom software and support. This often involves leveraging existing government-wide acquisition contracts (GWACs) or other contract vehicles that Carahsoft holds, which may include specific agreements with software publishers like Broadcom. Awarding through a reseller like Carahsoft can sometimes streamline the acquisition process for government agencies, as they may offer a consolidated purchasing platform and handle complex licensing agreements. However, it also introduces a layer of distribution, and the final price paid by the government includes Carahsoft's markup in addition to the publisher's costs. A direct award to VMware/Broadcom would bypass the reseller, potentially offering different pricing structures or negotiation leverage.

What are the performance expectations and metrics for this IDIQ contract?

The provided data indicates this is a Firm Fixed Price (FFP) IDIQ contract with a duration of 546 days. While specific performance metrics are not detailed in the abbreviated data, FFP contracts generally tie payment to the successful delivery of specified goods or services. For software licensing and support, performance expectations would typically include timely delivery of licenses, availability of software updates and patches, provision of technical support within agreed-upon response times (e.g., for critical issues), and adherence to any service level agreements (SLAs) that may be incorporated into the contract. The Department of the Army would monitor Carahsoft's performance against these terms. Failure to meet performance standards could result in contract remedies, though the specifics would be outlined in the full contract document.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: IT AND TELECOM - COMPUTE

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 11493 SUNSET HILLS RD, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $92,656,817

Exercised Options: $92,656,817

Current Obligation: $92,656,817

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W519TC25D0012

IDV Type: IDC

Timeline