DoD's $16.4M Microsoft Software Purchase from Softmart Government Services Shows Moderate Value
Contract Overview
Contract Amount: $16,419,604 ($16.4M)
Contractor: Softmart Government Services, Inc
Awarding Agency: Department of Defense
Start Date: 2010-09-16
End Date: 2011-09-21
Contract Duration: 370 days
Daily Burn Rate: $44.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: MICROSOFT SOFTWARE
Place of Performance
Location: DOWNINGTOWN, CHESTER County, PENNSYLVANIA, 19335
Plain-Language Summary
Department of Defense obligated $16.4 million to SOFTMART GOVERNMENT SERVICES, INC for work described as: MICROSOFT SOFTWARE Key points: 1. The contract represents a significant investment in essential software for the Department of Defense. 2. Competition dynamics indicate a full and open process, suggesting potential for competitive pricing. 3. Risk indicators appear low given the nature of software procurement and established vendor. 4. Performance context is tied to the ongoing need for Microsoft software within military operations. 5. The contract positions the DoD within the broader IT software procurement sector. 6. Value for money is assessed by comparing unit costs to market benchmarks and similar contracts.
Value Assessment
Rating: good
The contract's value is considered good, with a total award of $16.4 million for Microsoft software. Benchmarking against similar government software procurements and market rates for Microsoft licenses would provide a more precise value assessment. The firm fixed-price structure helps control costs, but the absence of specific per-unit pricing in the provided data limits a granular analysis. However, the competitive award process suggests a reasonable price was achieved.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 3 bidders suggests a healthy level of competition for this software procurement. This competitive environment is generally favorable for price discovery and achieving a fair market price for the government.
Taxpayer Impact: A full and open competition ensures that taxpayer dollars are likely being used efficiently by fostering a competitive environment that drives down prices.
Public Impact
The Department of Defense benefits from access to critical Microsoft software licenses. Essential software services are delivered to support military operations and administrative functions. The geographic impact is national, supporting DoD operations across various locations. Workforce implications include enabling military and civilian personnel to utilize standard productivity and operating system software.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in with proprietary software.
- Reliance on a single software vendor can create long-term dependency.
- Ensuring ongoing support and updates are competitively priced over the software lifecycle.
Positive Signals
- Procurement through full and open competition mitigates some pricing risks.
- Firm fixed-price contract provides cost certainty for the awarded period.
- Use of widely adopted software ensures broad user familiarity and reduces training needs.
Sector Analysis
This contract falls within the Information Technology sector, specifically software procurement. The market for enterprise software, particularly operating systems and productivity suites like Microsoft's, is dominated by a few large vendors. Government spending in this area is substantial and ongoing, reflecting the critical role of IT infrastructure. Comparable spending benchmarks would involve analyzing other large-scale Microsoft license agreements across federal agencies.
Small Business Impact
The provided data does not indicate any small business set-aside or subcontracting requirements for this contract. As a large software purchase, it is unlikely to have been specifically targeted towards small businesses, though larger prime contractors may engage small businesses for related IT services. The absence of set-asides means the primary focus was on obtaining the software from the most competitive source.
Oversight & Accountability
The contract was awarded under a firm fixed-price structure, which provides a degree of cost control and accountability. Oversight would typically involve contract management by the Department of the Navy to ensure delivery and compliance with terms. Transparency is facilitated by public contract databases, allowing for scrutiny of award details. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Microsoft Enterprise Agreements
- Department of Defense Software Licensing
- Federal IT Procurement
- General Services Administration (GSA) Schedule Contracts
Risk Flags
- Potential for cost increases in future renewals or upgrades.
- Dependency on a single vendor for critical software.
- Need for ongoing validation of software utilization and licensing compliance.
Tags
it, defense, department-of-defense, department-of-the-navy, software, microsoft, full-and-open-competition, firm-fixed-price, large-contract, information-technology, procurement, usa
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $16.4 million to SOFTMART GOVERNMENT SERVICES, INC. MICROSOFT SOFTWARE
Who is the contractor on this award?
The obligated recipient is SOFTMART GOVERNMENT SERVICES, INC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $16.4 million.
What is the period of performance?
Start: 2010-09-16. End: 2011-09-21.
What was the specific breakdown of Microsoft software products purchased under this contract?
The provided data does not specify the exact Microsoft software products procured. It broadly categorizes the purchase as 'MICROSOFT SOFTWARE.' To understand the precise value and utility, a detailed breakdown of licenses (e.g., Windows operating systems, Office suite, server software) and their respective quantities would be necessary. This level of detail is crucial for assessing if the $16.4 million expenditure aligns with the actual software needs and usage within the Department of the Navy.
How does the $16.4 million contract value compare to historical spending on Microsoft software by the Department of the Navy?
Without historical spending data specific to the Department of the Navy's Microsoft software procurements, a direct comparison is not possible. However, $16.4 million represents a substantial investment. Analyzing trends over several years would reveal whether this contract is an outlier, an increase, or a decrease in spending. Factors such as enterprise-wide license agreements, software version upgrades, and changes in user base could influence historical spending patterns. Understanding these trends is key to evaluating the long-term cost-effectiveness of software acquisition strategies.
What were the key performance metrics or deliverables expected from this software contract?
As this contract is for the procurement of software licenses, the primary deliverable is the provision of valid, functional licenses for the specified Microsoft products. Key performance metrics would likely revolve around timely delivery of license keys or media, and ensuring the software is compliant with the terms of the agreement. While not explicitly detailed in the summary data, the contract would typically include clauses regarding software functionality, support (if included), and adherence to licensing terms. The firm fixed-price nature suggests a focus on delivering the agreed-upon software without cost overruns.
What is the track record of Softmart Government Services, Inc. in fulfilling similar federal software contracts?
Information on Softmart Government Services, Inc.'s specific track record with similar federal software contracts is not detailed in the provided data. A comprehensive assessment would require reviewing their past performance on contracts of comparable size and scope, particularly those involving Microsoft products. Factors to consider include on-time delivery, adherence to budget, customer satisfaction ratings, and any past performance issues or awards. Their ability to successfully execute this $16.4 million contract suggests a level of capability, but a deeper dive into their contract history would provide a more robust understanding of their reliability.
Were there any specific justifications provided for choosing Microsoft software over potential open-source or alternative solutions?
The provided data does not include justifications for the choice of Microsoft software. Typically, such decisions are based on factors like existing infrastructure compatibility, standardization requirements, user familiarity, available technical support, and total cost of ownership, including training and integration. The Department of Defense often standardizes on specific platforms for interoperability and security reasons. A full analysis would investigate whether a formal analysis of alternatives (AoA) was conducted and documented.
What is the anticipated lifespan or upgrade cycle for the Microsoft software procured under this contract?
The contract duration is listed as 370 days (approximately one year), with an award date of September 16, 2010, and an end date of September 21, 2011. This suggests the contract was for a specific period, likely covering immediate licensing needs or a defined subscription term. It does not inherently dictate the long-term lifespan or upgrade cycle of the software itself. Microsoft's product lifecycle and the DoD's technology refresh policies would determine when upgrades or replacements are necessary, potentially leading to future procurements.
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
Offers Received: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Softmart, Inc. (UEI: 050383223)
Address: 450 ACORN LN, DOWNINGTOWN, PA, 06
Business Categories: Category Business, Small Business
Financial Breakdown
Contract Ceiling: $19,795,395
Exercised Options: $16,419,604
Current Obligation: $16,419,604
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0010402AZE84
IDV Type: IDC
Timeline
Start Date: 2010-09-16
Current End Date: 2011-09-21
Potential End Date: 2013-09-27 00:00:00
Last Modified: 2013-09-27
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