Army's $263M VMware software maintenance contract awarded to Dell Marketing L.P. under full and open competition
Contract Overview
Contract Amount: $263,399,879 ($263.4M)
Contractor: Dell Marketing L.P.
Awarding Agency: Department of Defense
Start Date: 2019-01-30
End Date: 2022-01-27
Contract Duration: 1,093 days
Daily Burn Rate: $241.0K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: VMWARE SOFTWARE LICENSE MAINTENANCE FOR THE ARMY
Place of Performance
Location: ROUND ROCK, WILLIAMSON County, TEXAS, 78682
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $263.4 million to DELL MARKETING L.P. for work described as: VMWARE SOFTWARE LICENSE MAINTENANCE FOR THE ARMY Key points: 1. The contract represents a significant investment in essential software infrastructure for the Army. 2. Dell Marketing L.P. secured this award, indicating strong market presence and competitive bidding. 3. The duration of the contract suggests a long-term need for these software services. 4. The firm-fixed-price structure aims to provide cost certainty for the government. 5. Analysis of value for money will depend on comparing performance and uptime against market benchmarks. 6. The contract's value places it within a substantial spending category for software licensing and maintenance.
Value Assessment
Rating: good
The total award amount of approximately $263 million over three years for VMware software license maintenance is substantial. Benchmarking this against similar large-scale enterprise software agreements is crucial. While specific performance metrics are not detailed here, the price appears to be within a reasonable range for comprehensive software support and maintenance for a large federal agency like the Army, assuming it covers a broad user base and critical functionalities. Further analysis would require comparing per-user or per-instance costs against industry standards and the pricing of comparable software maintenance contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but the designation implies a robust competitive process. This level of competition is generally expected to drive more favorable pricing and ensure the government receives the best value. The award to Dell Marketing L.P. indicates they were the most advantageous offer.
Taxpayer Impact: Taxpayers benefit from a competitive bidding process that aims to secure the most cost-effective solution for essential software maintenance, preventing potential overpayment.
Public Impact
The primary beneficiaries are the U.S. Army personnel who rely on VMware software for critical operations and data management. The contract ensures the continued availability, support, and updates for essential VMware software licenses. This spending supports the operational readiness and technological infrastructure of the Army across its various commands. The contract has implications for the IT workforce within the Army, ensuring they have the tools and support needed to perform their duties.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in with proprietary software, requiring ongoing significant investment.
- Risk of price increases in future renewals if competitive landscape shifts.
- Dependence on a single vendor for critical software maintenance and support.
Positive Signals
- Awarded under full and open competition, suggesting a competitive pricing environment.
- Firm-fixed-price contract provides cost predictability for the duration.
- Long-term contract indicates a stable and ongoing need, potentially leading to economies of scale.
Sector Analysis
This contract falls within the Software Publishers industry (NAICS 511210), a sector characterized by high innovation and significant government spending on enterprise solutions. The market for virtualization and cloud infrastructure software, like VMware, is substantial, with major players competing for large federal contracts. The Army's reliance on such software is typical for large organizations seeking efficient IT resource management. Comparable spending benchmarks would involve looking at other large federal agencies' software licensing and maintenance agreements.
Small Business Impact
The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large enterprise software agreement, it is unlikely that small businesses would be primary awardees. However, Dell Marketing L.P. may engage small businesses as subcontractors for specific services or support, though this is not detailed in the provided data. The primary impact is on the large software vendor ecosystem.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the relevant program executive office within the Department of the Army. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified software licenses and maintenance services. Transparency is generally maintained through federal procurement databases like FPDS, where contract awards are reported. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Army IT Modernization Programs
- Department of Defense Software Enterprise Licenses
- Federal Civilian Agency Software Procurement
- Cloud Computing Infrastructure Contracts
- Enterprise Resource Planning (ERP) System Support
Risk Flags
- Potential for vendor lock-in
- Long-term reliance on a single software provider
- Need for ongoing budget allocation for maintenance and upgrades
Tags
it, software, vmware, maintenance, department-of-defense, department-of-the-army, firm-fixed-price, full-and-open-competition, large-contract, enterprise-it, texas
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $263.4 million to DELL MARKETING L.P.. VMWARE SOFTWARE LICENSE MAINTENANCE FOR THE ARMY
Who is the contractor on this award?
The obligated recipient is DELL MARKETING L.P..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $263.4 million.
What is the period of performance?
Start: 2019-01-30. End: 2022-01-27.
What is the historical spending trend for VMware software maintenance within the Department of the Army?
Analyzing historical spending on VMware software maintenance within the Department of the Army requires accessing detailed procurement data over multiple fiscal years. While this specific contract award covers a three-year period from 2019 to 2022, the Army likely has ongoing or prior contracts for similar VMware products and services. Trends could reveal increasing or decreasing reliance on VMware, fluctuations in pricing, and the impact of competitive bidding over time. Without access to a broader dataset, it's difficult to establish a definitive trend, but the $263 million award suggests a consistent and significant requirement for these services.
How does the per-unit cost of this VMware maintenance contract compare to commercial market rates or other federal agencies?
Determining the precise per-unit cost requires knowing the number of licenses, users, or specific product tiers covered by this $263 million contract. However, federal agencies often negotiate bulk discounts. Comparing this to commercial rates requires understanding the specific VMware products and support levels. Generally, large federal contracts aim for pricing competitive with or better than commercial enterprise agreements due to volume. Benchmarking against other agencies' similar VMware contracts would provide a more direct comparison, revealing if the Army secured favorable terms relative to its peers for comparable software and maintenance.
What are the key performance indicators (KPIs) used to measure the success of this VMware maintenance contract?
Specific Key Performance Indicators (KPIs) for this contract are not detailed in the provided data. However, typical KPIs for software maintenance contracts include software uptime and availability, response times for technical support, resolution times for reported issues, successful delivery of software updates and patches, and adherence to service level agreements (SLAs). The contracting officer and relevant Army IT personnel would monitor these metrics to ensure Dell Marketing L.P. is meeting its contractual obligations and providing the expected value for the $263 million investment.
What is Dell Marketing L.P.'s track record with large federal IT contracts, particularly for software maintenance?
Dell Marketing L.P., as a major technology vendor, has a significant track record of securing and performing on large federal IT contracts. Their experience likely encompasses a wide range of hardware, software, and services across various government agencies. For software maintenance specifically, their ability to secure this substantial Army contract suggests a proven capability in managing complex licensing agreements and providing reliable support. A deeper dive into their contract history would reveal past performance ratings, any significant issues encountered, and their overall success rate in fulfilling similar large-scale government IT requirements.
What are the potential risks associated with relying on a single vendor for critical VMware software maintenance?
Relying on a single vendor like Dell Marketing L.P. for critical VMware software maintenance presents several risks. Firstly, there's the risk of vendor lock-in, where switching to a different provider becomes technically difficult and prohibitively expensive. Secondly, future price increases could be harder to negotiate if competition diminishes. Thirdly, the Army's operational continuity is dependent on the vendor's financial stability and continued commitment to supporting the specific software versions. Finally, a lack of competitive pressure might reduce the incentive for the vendor to innovate or offer superior support levels over the long term.
How does this contract align with the Army's broader IT modernization and digital transformation goals?
This contract for VMware software maintenance directly supports the Army's IT modernization and digital transformation goals by ensuring the stability and performance of a foundational virtualization platform. VMware technology is often central to private cloud infrastructure, enabling agility, scalability, and efficient resource utilization – all key aspects of modernization. By maintaining current licenses and support, the Army can continue to leverage these capabilities for deploying new applications, migrating workloads, and enhancing its overall IT infrastructure, paving the way for more advanced digital solutions.
Industry Classification
NAICS: Information › Software Publishers › Software Publishers
Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Dell Technologies Inc.
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: $263,399,879
Exercised Options: $263,399,879
Current Obligation: $263,399,879
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Parent Contract
Parent Award PIID: 47QTCA19A0001
IDV Type: BPA
Timeline
Start Date: 2019-01-30
Current End Date: 2022-01-27
Potential End Date: 2022-01-27 00:00:00
Last Modified: 2023-03-06
More Contracts from Dell Marketing L.P.
- Microsoft ESA Agreement — $1.3B (Department of Defense)
- Microsoft Products — $508.0M (Department of Defense)
- Microsoft M365 E5 — $477.2M (Department of Defense)
- 200410!000781!5700!GV90 !ssg/Pk !gs35f4076d !C!N! !n!fa877104f8320! !20040630!20040709!114315195!114315195!114315195!n!dell Marketing L P !ONE Dell WAY !round Rock !tx!78682!63500!491!48!round Rock !williamson !texas !+000012313462!n!n!000000000000!7030!adp Software !A7 !electronics and Communication Equip !000 !* !511210!E! !6! ! ! ! ! !99990909!B!A!Y! ! !A! ! ! !000! ! ! ! ! ! ! ! !C!N! ! ! ! ! ! ! !00 ! ! ! ! ! ! ! ! ! !0001! ! — $471.3M (Department of Defense)
- Microsoft Enterprise Products — $354.9M (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)