Interior's $32.7M Microsoft 365 renewal with TEK ANNOA LLC raises value questions

Contract Overview

Contract Amount: $32,677 ($32.7K)

Contractor: TEK Annoa LLC

Awarding Agency: Department of the Interior

Start Date: 2026-04-01

End Date: 2027-04-01

Contract Duration: 365 days

Daily Burn Rate: $90/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 10

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MICROSOFT 365 LICENSE RENEWAL UPGRADE

Place of Performance

Location: LAWRENCE, DOUGLAS County, KANSAS, 66046

State: Kansas Government Spending

Plain-Language Summary

Department of the Interior obligated $32,676.75 to TEK ANNOA LLC for work described as: MICROSOFT 365 LICENSE RENEWAL UPGRADE Key points: 1. The contract's value proposition requires scrutiny given the nature of software licensing renewals. 2. Competition dynamics appear favorable, with a competed award suggesting potential for price discovery. 3. Risk indicators are moderate, primarily related to vendor lock-in and the necessity of software. 4. Performance context is standard for enterprise software licensing, focusing on availability and support. 5. Sector positioning places this within the broader government IT software procurement landscape.

Value Assessment

Rating: fair

Benchmarking Microsoft 365 license renewals can be challenging due to volume discounts and specific feature sets. However, a 36-month contract at over $32 million warrants a close look at per-user costs and comparison against other federal agencies or large enterprise agreements. Without detailed usage metrics and specific license types, it's difficult to definitively assess value, but the scale suggests significant investment that should yield demonstrable efficiency gains.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was competed under SAP (Simplified Acquisition Procedures), indicating a competitive process was utilized. While SAP is typically for smaller dollar amounts, its use here suggests that the contracting officers found it appropriate for this procurement. The fact that it was competed is a positive sign for price discovery and potentially achieving a fair market price.

Taxpayer Impact: A competed award, even under SAP, generally benefits taxpayers by fostering competition that can drive down costs compared to sole-source procurements.

Public Impact

Federal employees across the Bureau of Indian Affairs and Bureau of Indian Education will benefit from access to Microsoft 365 productivity tools. The services delivered include software licenses and potentially associated support for the Microsoft 365 suite. The geographic impact is national, supporting operations across various Bureau of Indian Affairs and Bureau of Indian Education locations. Workforce implications include enabling digital collaboration and productivity for federal employees.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with Microsoft's ecosystem.
Reliance on a single software vendor for critical productivity tools.
Ensuring cost-effectiveness of the specific license tier and features procured.

Positive Signals

Awarded through a competed process, indicating market engagement.
Firm Fixed Price contract type helps manage cost certainty.
Long-term renewal provides stability for user access and operations.

Sector Analysis

This contract falls within the government's substantial IT software procurement sector, specifically for enterprise productivity suites. The market for such software is dominated by a few large vendors, making government-wide agreements or competitive renewals crucial for managing costs. Comparable spending benchmarks would involve looking at other large federal agencies' Microsoft 365 or similar suite procurements to gauge unit pricing and overall investment.

Small Business Impact

The data does not indicate any specific small business set-aside or subcontracting requirements for this contract. As a software license renewal, it may not lend itself to traditional subcontracting opportunities for small businesses unless TEK ANNOA LLC chooses to engage them for value-added services or support.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Interior's contracting officers and program managers. Accountability measures are embedded in the contract terms, including delivery of services and adherence to the firm fixed price. Transparency is facilitated by the contract award notice, though detailed usage and cost breakdowns may not be publicly available.

Related Government Programs

Microsoft 365 Enterprise Agreements
Federal Civilian IT Software Procurement
Cloud Productivity Suite Contracts
Department of the Interior IT Modernization

Risk Flags

Potential for cost savings through further negotiation or alternative licensing.
Need for detailed cost-benefit analysis of specific license tiers.
Vendor lock-in risk associated with proprietary software ecosystems.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $32,676.75 to TEK ANNOA LLC. MICROSOFT 365 LICENSE RENEWAL UPGRADE

Who is the contractor on this award?

The obligated recipient is TEK ANNOA LLC.

Which agency awarded this contract?

Awarding agency: Department of the Interior (Bureau of Indian Affairs and Bureau of Indian Education).

What is the total obligated amount?

The obligated amount is $32,676.75.

What is the period of performance?

Start: 2026-04-01. End: 2027-04-01.

What is the specific breakdown of Microsoft 365 licenses (e.g., E3, E5, specific add-ons) included in this $32.7 million contract, and how does the per-user cost compare to GSA Schedule pricing or oth

The provided data does not specify the exact breakdown of Microsoft 365 license types (e.g., E3, E5, Business Premium, specific add-ons like advanced security or compliance features) included in this $32.7 million contract. To perform a robust value assessment, this granular detail is essential. Federal agencies often procure licenses through various channels, including GSA Schedules (like the IT Schedule 70), NASA SEWP, or direct enterprise agreements negotiated with Microsoft or its resellers. Comparing the per-user cost requires knowing the specific license tier and the number of users. For instance, if this contract covers 10,000 users over 3 years, the average annual per-user cost would be approximately $545. This figure needs to be benchmarked against publicly available GSA pricing or reported federal contract data for similar license types to determine if it represents a competitive rate. Factors like volume discounts, included support levels, and the duration of the contract significantly influence the final per-user cost, making direct comparisons complex without full context.

What was the total number of bids received during the solicitation process for this contract, and how does this number influence the perceived level of competition and potential for cost savings?

The data indicates that this contract was 'COMPETED UNDER SAP' and had '10' bids. SAP (Simplified Acquisition Procedures) is generally used for procurements below certain thresholds, and while it allows for competition, it might not involve the same breadth of outreach as full and open competition for larger contracts. Receiving 10 bids suggests a reasonable level of interest from potential offerors within the scope of the SAP process. A higher number of bids generally correlates with increased competition, which can lead to better price discovery and potentially lower costs for the government. However, the effectiveness of this competition also depends on the qualifications of the bidders and the specific requirements of the solicitation. Without knowing if these 10 bidders were all capable of meeting the technical requirements and if the evaluation criteria favored the lowest price technically acceptable or best value, it's difficult to definitively state the extent of cost savings achieved solely based on the bid count.

What is the track record of TEK ANNOA LLC in delivering similar enterprise software licensing solutions to federal agencies, and have there been any past performance issues or significant contract mod

Information regarding TEK ANNOA LLC's specific track record in delivering enterprise software licensing solutions to federal agencies, including details on past performance issues or significant contract modifications for similar contracts, is not provided in the summary data. A comprehensive assessment would require reviewing the contractor's past performance evaluations (e.g., CPARS reports), any publicly available contract history beyond this award, and news or official reports concerning their federal engagements. The current data only lists TEK ANNOA LLC as the awardee for this specific Microsoft 365 license renewal. Without further investigation into their broader federal contract portfolio and performance history, it is challenging to assess their reliability and experience in this domain.

How does the duration of this contract (365 days, implying a one-year base period with potential for option years not specified) align with typical federal procurement strategies for enterprise softwa

The provided data indicates a duration of '365' days, which typically represents a one-year base period for a contract. However, the 'sd' (start date) is '2026-04-01' and 'ed' (end date) is '2027-04-01', confirming a one-year term. Federal procurement strategies for enterprise software renewals often involve multi-year contracts with option periods (exercisable by the government) to ensure continuity of service and potentially lock in favorable pricing. A one-year base period, as indicated here, provides flexibility but may require more frequent re-competition or renewal actions. This approach allows the agency to reassess needs and market conditions annually but could lead to less predictable budgeting and potentially higher administrative costs associated with repeated procurement actions. If this contract has unexercised option periods, the total potential value and duration could be longer, offering more stability. Without clarity on option periods, the current structure suggests a shorter-term commitment.

What are the specific performance metrics or service level agreements (SLAs) associated with this Microsoft 365 license renewal, and how will the Department of the Interior monitor TEK ANNOA LLC's com

The provided data does not detail the specific performance metrics or Service Level Agreements (SLAs) tied to this Microsoft 365 license renewal contract. Typically, for software licensing, SLAs would focus on aspects like software availability (uptime), response times for technical support, and potentially patch/update delivery schedules. The Department of the Interior would likely monitor compliance through regular reporting from TEK ANNOA LLC, user feedback mechanisms, and potentially periodic reviews of system performance and support ticket resolution rates. The contract's 'PURCHASE ORDER' designation and 'FIRM FIXED PRICE' type suggest that the core deliverable is the provision of the licenses themselves, with adherence to the terms of service defined by Microsoft's underlying licensing agreements, which the vendor is obligated to facilitate. Formal monitoring would involve the Contracting Officer's Representative (COR) overseeing the vendor's adherence to contractual obligations.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: IT AND TELECOM - COMPUTE

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 140A2326Q0080

Offers Received: 10

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3070 ROAD 371, KILN, MS, 39556

Business Categories: American Indian Owned Business, Category Business, Minority Owned Business, Native American Owned Business, Partnership or Limited Liability Partnership, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $32,677

Exercised Options: $32,677

Current Obligation: $32,677

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline