State Department Spends $356M on Microsoft Licenses via Full and Open Competition

Contract Overview

Contract Amount: $355,998,471 ($356.0M)

Contractor: Minburn Technology Group, LLC

Awarding Agency: Department of State

Start Date: 2024-03-01

End Date: 2027-02-28

Contract Duration: 1,094 days

Daily Burn Rate: $325.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MICROSOFT LICENSES

Place of Performance

Location: GREAT FALLS, FAIRFAX County, VIRGINIA, 22066

State: Virginia Government Spending

Plain-Language Summary

Department of State obligated $356.0 million to MINBURN TECHNOLOGY GROUP, LLC for work described as: MICROSOFT LICENSES Key points: 1. Significant investment in essential software licenses for government operations. 2. Competition method suggests a potentially competitive market for these services. 3. Risk of vendor lock-in and price increases over the contract duration. 4. IT sector spending benchmark for software licensing is highly variable.

Value Assessment

Rating: good

The total award value of $356M over 3 years for Microsoft licenses appears reasonable given the scale of government IT needs. Benchmarking against similar large-scale enterprise software agreements is crucial for a definitive assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while competition was sought, specific sources were initially excluded. This method can impact price discovery if the excluded sources represent significant market share.

Taxpayer Impact: The use of full and open competition aims to secure the best value for taxpayers, though the exclusion of sources warrants scrutiny to ensure maximum cost-effectiveness.

Public Impact

Ensures continued access to critical Microsoft software for Department of State operations. Supports government-wide IT infrastructure and employee productivity. Potential for cost savings through competitive bidding processes.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future renewals.
Reliance on a single software vendor.
Cybersecurity risks associated with software vulnerabilities.

Positive Signals

Awarded through full and open competition.
Long-term contract provides budget stability.
Supports essential government functions.

Sector Analysis

This contract falls within the Information Technology sector, specifically software licensing. Government spending on enterprise software licenses can range from millions to billions, depending on agency size and software suite complexity. This award is substantial but not unusual for a large federal agency.

Small Business Impact

The data does not indicate any specific participation or set-asides for small businesses in this contract. Large enterprise software deals often involve major vendors, potentially limiting direct small business involvement unless they are subcontractors.

Oversight & Accountability

The award was made by the Department of State, indicating internal oversight. Further oversight would involve tracking license utilization, performance metrics, and adherence to contract terms by the vendor.

Related Government Programs

Other Computer Related Services
Department of State Contracting
Department of State Programs

Risk Flags

Potential for price increases upon renewal.
Vendor lock-in with Microsoft ecosystem.
Cybersecurity risks associated with software.
Limited visibility into specific product pricing.
Unclear impact of source exclusion on competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $356.0 million to MINBURN TECHNOLOGY GROUP, LLC. MICROSOFT LICENSES

Who is the contractor on this award?

The obligated recipient is MINBURN TECHNOLOGY GROUP, LLC.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $356.0 million.

What is the period of performance?

Start: 2024-03-01. End: 2027-02-28.

What specific Microsoft products are included in this $356M contract, and how does their pricing compare to commercial enterprise agreements?

The provided data does not specify the exact Microsoft products covered under this $356M contract. A detailed breakdown of included software (e.g., Office 365 E5, Windows Server licenses, Azure credits) is necessary. Comparing the per-unit costs against publicly available commercial enterprise agreements, GSA schedules, or other government-wide contracts would reveal potential savings or overspending.

What was the rationale for excluding certain sources during the 'Full and Open Competition After Exclusion of Sources' process, and did this impact the final price?

The rationale for excluding specific sources needs to be documented by the Department of State. Common reasons include specialized capabilities, existing infrastructure integration, or prior performance issues. Understanding these exclusions is vital to assess if the competitive field was narrowed unnecessarily, potentially leading to a higher price than if all capable vendors had participated.

How will the Department of State ensure effective utilization and prevent license creep over the 3-year contract period to maximize value?

Effective utilization requires robust asset management and regular audits to ensure licenses are assigned to active users and are the appropriate tier. Preventing license creep involves monitoring usage patterns, decommissioning unused licenses, and negotiating renewal terms based on actual needs rather than automatic escalations. Proactive management by the agency is key to realizing the full value of this significant investment.

Industry Classification

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

Product/Service Code: IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 9716 ARNON CHAPEL RD, GREAT FALLS, VA, 22066

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

Financial Breakdown

Contract Ceiling: $581,609,897

Exercised Options: $363,015,336

Current Obligation: $355,998,471

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: NNG15SD34B

IDV Type: GWAC

Timeline