DoD's $22.7M software assurance contract awarded to Softmart Government Services shows fair value with 4 bidders

Contract Overview

Contract Amount: $22,678,300 ($22.7M)

Contractor: Softmart Government Services, Inc

Awarding Agency: Department of Defense

Start Date: 2011-09-26

End Date: 2014-10-31

Contract Duration: 1,131 days

Daily Burn Rate: $20.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: LICENSES AND SOFTWARE ASSURANCE

Place of Performance

Location: DOWNINGTOWN, CHESTER County, PENNSYLVANIA, 19335

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $22.7 million to SOFTMART GOVERNMENT SERVICES, INC for work described as: LICENSES AND SOFTWARE ASSURANCE Key points: 1. The contract's value appears reasonable given the scope of software licensing and assurance services. 2. Full and open competition suggests a healthy market for these types of IT services. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. Performance duration of over three years provides stability for the Army's software needs. 5. The contract falls within the broader IT procurement sector, supporting essential software infrastructure. 6. The award was made to a single vendor, Softmart Government Services, Inc.

Value Assessment

Rating: good

The $22.7 million contract for licenses and software assurance appears to represent good value. Awarded under full and open competition with four bidders, the pricing was likely competitive. The firm fixed-price structure further protects the government from cost escalations. Benchmarking against similar large-scale software licensing agreements suggests this award is within a reasonable range for the services and products provided over its duration.

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 offers. Four bids were received, suggesting a reasonable level of competition for this requirement. The presence of multiple bidders generally leads to better price discovery and ensures the government receives competitive pricing.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers, as it likely resulted in a more favorable price than a sole-source or limited competition procurement.

Public Impact

The Department of the Army benefits from this contract by securing necessary software licenses and assurance services. This contract ensures the continued availability and security of critical software for military operations. The geographic impact is primarily within the Department of the Army's operational footprint. Workforce implications are indirect, supporting IT personnel who manage and utilize the licensed software.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specific software suites become deeply integrated.
Reliance on a single vendor for assurance could pose risks if their support falters.

Positive Signals

Firm fixed-price contract minimizes budget uncertainty.
Full and open competition ensures market-driven pricing.
Longer performance period provides continuity of service.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on software licensing and assurance. The market for enterprise software licenses and support is substantial, with numerous vendors offering a wide range of products and services. Government spending in this area is consistent, driven by the need to maintain up-to-date and secure software across various agencies. Comparable spending benchmarks would involve analyzing other large federal contracts for similar software suites and maintenance agreements.

Small Business Impact

There is no indication that this contract included a small business set-aside. As a large contract for software licenses and assurance, it is likely that the prime contractor, Softmart Government Services, Inc., is a mid-to-large sized business. Subcontracting opportunities for small businesses may exist, but are not explicitly detailed in the award information. The primary impact on the small business ecosystem would be through potential subcontracting roles.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program management office within the Department of the Army. Accountability is ensured through the firm fixed-price contract terms, requiring delivery of specified software and assurance services. Transparency is facilitated by the public nature of federal contract awards, though specific performance metrics may not be publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Software and Information Technology
IT Procurement
Software Licensing
Cybersecurity Assurance

Risk Flags

Potential for vendor lock-in
Reliance on single vendor for critical assurance services

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.7 million to SOFTMART GOVERNMENT SERVICES, INC. LICENSES AND SOFTWARE ASSURANCE

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 Army).

What is the total obligated amount?

The obligated amount is $22.7 million.

What is the period of performance?

Start: 2011-09-26. End: 2014-10-31.

What is the track record of Softmart Government Services, Inc. in fulfilling federal contracts, particularly for software assurance?

Softmart Government Services, Inc. has a history of federal contract awards, primarily within the IT and software procurement space. While specific details on past performance for software assurance are not provided in this summary, their ability to win this $22.7 million contract under full and open competition suggests a demonstrated capability to meet government requirements. Further analysis would involve reviewing their contract history for similar awards, performance evaluations (if publicly available), and any past performance issues or commendations to fully assess their track record in this specific area.

How does the per-unit cost of the software licenses compare to commercial market rates?

Determining the precise per-unit cost comparison to commercial market rates is challenging without detailed line-item data for the software licenses included in this $22.7 million contract. Federal agencies often negotiate volume discounts and specific licensing terms that may differ from standard commercial offerings. However, given that the contract was awarded under full and open competition with four bidders, it implies that Softmart Government Services, Inc. offered pricing that was deemed competitive and represented good value relative to other market participants. A detailed analysis would require comparing the specific software products, quantities, and assurance levels against publicly available commercial price lists and enterprise agreement benchmarks.

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

The primary risks associated with this contract include potential vendor lock-in, where the Department of the Army becomes heavily reliant on Softmart's specific software and assurance services, making future transitions difficult. Another risk is the potential for the vendor's support quality to decline over the contract period. Mitigation strategies are in place: the firm fixed-price nature of the contract helps control costs, and the initial award under full and open competition suggests a competitive landscape that incentivizes good performance. Furthermore, the contract likely includes service level agreements (SLAs) and performance standards that Softmart must meet to receive payment, providing a mechanism for oversight and recourse.

How effective has the Department of the Army been in managing software assurance contracts of this scale historically?

The Department of the Army has extensive experience managing large-scale IT and software assurance contracts. Historically, their effectiveness has varied, with successes often tied to clear requirements definition, robust competition, and diligent contract oversight. Challenges can arise from rapidly evolving technology, complex licensing agreements, and ensuring consistent service delivery across diverse units. This particular contract, awarded under full and open competition with a fixed-price structure, suggests an attempt to leverage market forces for efficiency and cost control, which are generally positive indicators for effective management. Continuous monitoring and performance reviews are crucial for sustained effectiveness.

What are the historical spending patterns for software licenses and assurance within the Department of the Army or similar defense agencies?

Historical spending patterns for software licenses and assurance within the Department of the Army and similar defense agencies typically show significant and consistent investment. Agencies procure a wide array of software, from operating systems and productivity suites to specialized mission-critical applications. Spending often increases with the adoption of new technologies and cybersecurity mandates. Contracts like this one, valued at $22.7 million over approximately three years, are representative of the substantial budgets allocated to maintaining a secure and functional IT infrastructure. Benchmarking against previous years' spending on similar software categories would reveal trends in volume, cost, and vendor reliance.

Industry Classification

NAICS: Wholesale Trade › Professional and Commercial Equipment and Supplies Merchant Wholesalers › Computer and Computer Peripheral Equipment and Software Merchant Wholesalers

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W91QUZ09R0022

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Softmart, Inc. (UEI: 050383223)

Address: 450 ACORN LN, DOWNINGTOWN, PA, 19335

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business

Financial Breakdown

Contract Ceiling: $22,678,300

Exercised Options: $22,678,300

Current Obligation: $22,678,300

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91QUZ09A0004

IDV Type: IDC

Timeline