DoD's Army Awards $60M Cloud Support Contract to Carahsoft, Raising Questions on Value and Competition

Contract Overview

Contract Amount: $59,939,890 ($59.9M)

Contractor: Carahsoft Technology Corp

Awarding Agency: Department of Defense

Start Date: 2020-07-23

End Date: 2023-03-08

Contract Duration: 958 days

Daily Burn Rate: $62.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: PROGRAM MANAGER - LOGISTICS MANAGEMENT PROGRAM (LMP) CLOUD MIGRATION AND HOSTING SUPPORT SERVICES

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $59.9 million to CARAHSOFT TECHNOLOGY CORP for work described as: PROGRAM MANAGER - LOGISTICS MANAGEMENT PROGRAM (LMP) CLOUD MIGRATION AND HOSTING SUPPORT SERVICES Key points: 1. Significant contract value of $59.9M over 3 years. 2. Competition method (BPA Call) may limit price discovery. 3. Potential risk in vendor lock-in and cost escalation. 4. IT sector spending is high, but specific cloud migration costs vary.

Value Assessment

Rating: questionable

The contract value of $59.9M for cloud migration and hosting support is substantial. Benchmarking against similar large-scale cloud services contracts is difficult without more granular data on services provided, but the duration and scope suggest a potentially high but not necessarily unreasonable price point.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

Awarded via a BPA Call under a full and open competition, this method allows for competition among pre-qualified vendors. However, the specific call mechanism might not achieve the same level of price discovery as a direct, open solicitation for this specific requirement.

Taxpayer Impact: Taxpayer funds are being utilized for critical IT infrastructure modernization. The effectiveness of the competition method in securing the best value for taxpayer money is a key consideration.

Public Impact

Modernization of critical Army logistics systems through cloud migration. Ensures continued operational support for the Logistics Management Program. Potential for improved efficiency and scalability of IT services. Impacts Army's ability to leverage advanced cloud technologies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited transparency on specific cloud services and pricing.
Potential for cost overruns if scope expands.
Dependence on a single vendor for critical cloud infrastructure.

Positive Signals

Supports modernization of essential defense logistics systems.
Utilizes existing contract vehicles (BPA Call) for efficiency.
Contract awarded under a full and open competition framework.

Sector Analysis

This contract falls within the IT sector, specifically cloud computing services. Government spending on cloud services has been rapidly increasing as agencies modernize. Benchmarks for similar large-scale cloud migration and hosting contracts are highly variable based on specific requirements and service level agreements.

Small Business Impact

The contract was awarded to Carahsoft Technology Corp, a reseller, and the underlying services are likely provided by cloud infrastructure providers. There is no explicit indication of small business participation in this specific award, which is common for large IT contracts managed through resellers.

Oversight & Accountability

Oversight would typically involve program managers within the Department of the Army ensuring contract deliverables are met and costs remain within budget. Accountability rests with the contracting officer and the program executive office responsible for the Logistics Management Program.

Related Government Programs

Software Publishers
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Lack of detailed service breakdown for cost analysis.
Potential for vendor lock-in with cloud services.
BPA Call competition may not be optimal for this scale.
No clear indication of small business subcontracting.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $59.9 million to CARAHSOFT TECHNOLOGY CORP. PROGRAM MANAGER - LOGISTICS MANAGEMENT PROGRAM (LMP) CLOUD MIGRATION AND HOSTING SUPPORT SERVICES

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 $59.9 million.

What is the period of performance?

Start: 2020-07-23. End: 2023-03-08.

What specific cloud services are being procured, and how do their costs compare to industry benchmarks for similar scale and performance?

The data does not specify the exact cloud services (e.g., IaaS, PaaS, SaaS, specific vendor platforms) or performance metrics. A detailed breakdown is needed to compare costs against industry benchmarks. Factors like data migration complexity, security requirements, and required uptime significantly influence pricing, making direct comparisons challenging without granular details.

What mechanisms are in place to mitigate the risk of cost escalation or vendor lock-in, given the long-term nature of cloud hosting?

Mitigation strategies could include phased migration, clear exit clauses in the contract, regular performance reviews, and competitive re-solicitation at key milestones. The contract's fixed-price nature for certain components may offer some cost control, but ongoing hosting fees and potential scope creep require diligent oversight to prevent escalation and lock-in.

How effectively does the BPA Call mechanism ensure the best possible price and technical solution for the Army's cloud migration needs compared to other contracting methods?

BPA Calls can offer efficiency by leveraging pre-negotiated terms. However, they may not always yield the most competitive pricing or the most tailored technical solution compared to a dedicated, open solicitation for a large, complex requirement like cloud migration. The effectiveness depends on the specific BPA's terms and the number of qualified vendors competing on the call.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

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: 3

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: $59,939,890

Exercised Options: $59,939,890

Current Obligation: $59,939,890

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: N6600119A0010

IDV Type: BPA

Timeline