DoD's $99M Red Hat Software/Maintenance contract awarded to DLT Solutions shows strong competition and fair value

Contract Overview

Contract Amount: $99,036,239 ($99.0M)

Contractor: DLT Solutions, LLC

Awarding Agency: Department of Defense

Start Date: 2017-01-30

End Date: 2021-01-27

Contract Duration: 1,458 days

Daily Burn Rate: $67.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: DON ELA - RED HAT SOFTWARE/MAINTENANCE

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $99.0 million to DLT SOLUTIONS, LLC for work described as: DON ELA - RED HAT SOFTWARE/MAINTENANCE Key points: 1. Contract demonstrates effective price competition with a full and open solicitation. 2. Value for money appears favorable given the firm-fixed-price structure and duration. 3. No small business set-aside was utilized, indicating a focus on broad market participation. 4. The contract's performance period spans over four years, suggesting a stable need. 5. Spending aligns with IT infrastructure and software maintenance needs within the Defense sector. 6. The award was made via a BPA Call, suggesting a streamlined procurement process for existing agreements.

Value Assessment

Rating: good

The contract's firm-fixed-price nature suggests predictable costs for the government. Benchmarking against similar software maintenance contracts is challenging without specific service level agreements or detailed product breakdowns. However, the competitive award process implies that DLT Solutions' pricing was deemed reasonable relative to other potential bidders. The total award amount of approximately $99 million over four years indicates a significant but potentially justified investment for enterprise-level software support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. The solicitation method, a BPA Call, suggests that DLT Solutions was likely one of several awardees on a broader Blanket Purchase Agreement, and this specific call represented a competitive task order. The presence of full and open competition generally fosters robust price discovery and encourages multiple vendors to offer competitive terms.

Taxpayer Impact: Taxpayers benefit from the competitive pricing that full and open competition typically yields, ensuring that the government is not overpaying for essential software and maintenance services.

Public Impact

The Department of Defense benefits from access to critical Red Hat software and ongoing maintenance, ensuring operational continuity for its IT systems. This contract supports the IT infrastructure and software needs of various branches within the Department of the Navy. The services delivered are primarily software licenses and technical support, crucial for maintaining secure and up-to-date operating systems and platforms. While specific geographic impacts are not detailed, the contract supports a federal agency with a widespread presence. The contract likely supports IT professionals and system administrators within the DoD who manage and maintain these software environments.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if alternative solutions are not explored in future procurements.
Reliance on a single software vendor for critical operating system components can pose long-term strategic risks.

Positive Signals

Firm-fixed-price contract provides cost certainty for the duration of the award.
Full and open competition ensures a competitive environment, driving better pricing and service.
Award through a BPA Call suggests efficient procurement leveraging existing agreements.

Sector Analysis

This contract falls within the broader Information Technology sector, specifically focusing on software licensing and maintenance for operating systems. The market for enterprise Linux distributions and associated support is dominated by a few key players, including Red Hat. Government spending in this area is substantial, driven by the need for secure, stable, and scalable IT infrastructure across various agencies. Comparable spending benchmarks would involve analyzing other large-scale software maintenance agreements for similar enterprise solutions.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the procurement was aimed at attracting a wide range of bidders, potentially including large system integrators and software vendors. While there is no direct small business set-aside, the prime contractor, DLT Solutions, may engage small businesses as subcontractors, though this is not explicitly detailed in the provided data. The absence of a set-aside means opportunities for small businesses to directly compete for this prime contract were limited.

Oversight & Accountability

The contract was awarded by the Department of the Navy, a component of the Department of Defense. Oversight would typically be managed by contracting officers and program managers within the Navy. Transparency is facilitated through contract award databases like FPDS. Accountability measures are inherent in the firm-fixed-price contract type, requiring the contractor to deliver specified software and maintenance. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

DoD Enterprise Software Agreements
General Services Administration (GSA) Schedule Contracts
IT Software Licensing and Maintenance
Department of the Navy IT Procurement

Risk Flags

Potential for vendor lock-in
Reliance on single-source software vendor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $99.0 million to DLT SOLUTIONS, LLC. DON ELA - RED HAT SOFTWARE/MAINTENANCE

Who is the contractor on this award?

The obligated recipient is DLT SOLUTIONS, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $99.0 million.

What is the period of performance?

Start: 2017-01-30. End: 2021-01-27.

What is the track record of DLT Solutions in fulfilling federal contracts, particularly for software maintenance?

DLT Solutions has a significant history of serving the federal government, including the Department of Defense and Department of the Navy. Their portfolio often includes software licensing, maintenance, and IT solutions. Analyzing their past performance on similar contracts, including on-time delivery, quality of service, and adherence to budget, would provide a clearer picture of their reliability. Publicly available contract data and performance reviews, where accessible, can offer insights into their track record. However, without specific performance metrics for this particular contract, a definitive assessment relies on broader historical data and industry reputation.

How does the $99 million award compare to other similar software maintenance contracts within the federal government?

Comparing this $99 million award requires context regarding the scope, duration, and specific software covered. For enterprise-level operating system software and maintenance, especially for a large entity like the Department of Defense, this figure can represent fair market value. For instance, other agencies procure similar large-scale software licenses and support, often running into tens or hundreds of millions of dollars over several years. The firm-fixed-price nature and the full and open competition suggest that the pricing was vetted against market alternatives. A detailed comparison would necessitate analyzing contracts with similar software vendors (e.g., Microsoft, Oracle) for comparable service levels and user bases across federal agencies.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks include potential vendor lock-in with Red Hat software, limiting future flexibility and potentially increasing costs if alternatives are not considered. There's also a risk of performance issues if maintenance and support are not delivered effectively, impacting DoD's IT operations. Mitigation strategies likely involve the firm-fixed-price structure, which caps costs, and the full and open competition, which encourages competitive service levels. The contract's duration (over 4 years) also implies a need for stable, reliable support. Future procurements should actively explore competitive alternatives to mitigate long-term vendor dependency.

How effective has this contract been in ensuring the Department of the Navy has up-to-date and secure Red Hat software?

Assessing the effectiveness requires specific performance data not provided here, such as uptime metrics, patch deployment rates, and security vulnerability remediation times. However, the contract's structure, awarded under full and open competition with a firm-fixed-price, suggests an intent to secure reliable service at a competitive rate. The multi-year duration implies a sustained effort to maintain software currency. The Department of the Navy's continued reliance on this type of contract indicates a perceived level of effectiveness in meeting their operational needs for Red Hat software and maintenance.

What are the historical spending patterns for Red Hat software and maintenance within the Department of Defense?

Historical spending patterns for Red Hat software and maintenance within the DoD are likely substantial and have grown over time as Linux adoption has increased across various platforms and agencies. The DoD often consolidates software purchases through enterprise agreements or blanket purchase agreements to leverage economies of scale and improve management. This $99 million contract represents a significant, but potentially typical, portion of that spending for a specific period and entity (Department of the Navy). Analyzing broader DoD IT budgets and specific software procurement data over the past decade would reveal trends in Linux-based solutions and associated support costs.

What is the significance of this contract being awarded via a BPA Call?

Awarding this contract via a BPA Call signifies that it was likely executed under a pre-existing Blanket Purchase Agreement. BPAs are typically established with vendors to streamline the procurement of commonly purchased items or services, often leveraging ceiling prices negotiated during the initial BPA award. This method can significantly reduce administrative burden and lead time compared to a full, open-ended solicitation for each individual requirement. For the government, it implies a more efficient way to acquire necessary software and maintenance, while for the contractor, it represents a confirmed channel for sales under an established agreement.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

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: Exitcertified Corp

Address: 2411 DULLES CORNER PARK STE 800, HERNDON, VA, 20171

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

Financial Breakdown

Contract Ceiling: $99,036,239

Exercised Options: $99,036,239

Current Obligation: $99,036,239

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0018917AQ002

IDV Type: BPA

Timeline