State Department awards $14M+ for Azure cloud services to Minburn Technology Group, highlighting IT infrastructure needs

Contract Overview

Contract Amount: $14,053,586 ($14.1M)

Contractor: Minburn Technology Group, LLC

Awarding Agency: Department of State

Start Date: 2024-09-05

End Date: 2026-02-28

Contract Duration: 541 days

Daily Burn Rate: $26.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MICROSOFT AZURE

Place of Performance

Location: GREAT FALLS, FAIRFAX County, VIRGINIA, 22066

State: Virginia Government Spending

Plain-Language Summary

Department of State obligated $14.1 million to MINBURN TECHNOLOGY GROUP, LLC for work described as: MICROSOFT AZURE Key points: 1. Contract value of over $14 million indicates significant investment in cloud computing capabilities. 2. The award to Minburn Technology Group suggests a focus on specialized IT services. 3. A firm fixed-price contract structure aims to control costs and provide budget certainty. 4. The duration of over 500 days points to a sustained need for these cloud services. 5. This contract falls within the broader category of IT infrastructure and cloud solutions.

Value Assessment

Rating: fair

The contract value of $14,053,586.10 for Azure cloud services appears to be within a reasonable range for large-scale government IT procurements. Benchmarking against similar cloud service contracts awarded by agencies like the Department of Defense or GSA would provide a more precise value-for-money assessment. The fixed-price nature of the contract helps in cost predictability, but the absence of detailed performance metrics or unit costs makes a granular value assessment challenging. Further analysis would require comparing the scope of services and service level agreements to industry standards and other government contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which suggests that while competition was intended, specific circumstances led to excluding some potential bidders. The 'limited' competition level, with only one awardee, raises questions about the extent of market engagement. It is crucial to understand the rationale behind excluding other sources to determine if the competition truly reflected the available market capabilities and if it resulted in optimal pricing for the government.

Taxpayer Impact: Limited competition can potentially lead to higher prices for taxpayers if a broader range of bidders could have offered more competitive rates. It also suggests that the government may not have accessed the full spectrum of innovative solutions available in the market.

Public Impact

The Department of State benefits from enhanced cloud computing infrastructure, supporting its global operations and data management. Citizens and international partners benefit indirectly through more efficient and secure government services enabled by robust IT. The contract supports the IT workforce within Minburn Technology Group and potentially its subcontractors. The services delivered are critical for the operational continuity and modernization of the State Department's digital services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have restricted price discovery and potentially increased costs for taxpayers.
The specific reasons for excluding sources in the competition process are not detailed, warranting further investigation.
Lack of detailed performance metrics makes it difficult to fully assess the value delivered against the contract cost.

Positive Signals

The use of a firm fixed-price contract provides cost certainty for the Department of State.
Awarding a contract for essential cloud services like Azure demonstrates a commitment to modernizing government IT infrastructure.
The contract duration suggests a stable and ongoing need, allowing for strategic IT planning.

Sector Analysis

This contract falls within the broader Information Technology sector, specifically focusing on cloud computing services. The market for cloud services, particularly for government agencies, is substantial and growing, driven by the need for scalability, security, and cost-efficiency. Major cloud providers like Microsoft Azure, Amazon Web Services, and Google Cloud Platform dominate this space. Government contracts often involve complex requirements for security, compliance, and integration, leading to specialized service providers and resellers like Minburn Technology Group playing a key role in delivering these solutions.

Small Business Impact

The data indicates that small business participation was not a primary focus for this specific award, as the 'sb' field is false. There is no explicit mention of small business set-asides or subcontracting plans. This suggests that the primary contractor, Minburn Technology Group, is likely not a small business, and the contract was not specifically targeted to encourage small business involvement. Further review of subcontracting reports would be necessary to determine if any small businesses are involved further down the supply chain.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of State's contracting officers and program managers. The contract's fixed-price nature simplifies some aspects of financial oversight. Transparency is facilitated by public contract databases, but detailed performance reviews and audit trails are typically internal. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise related to the contract's execution or administration.

Related Government Programs

Cloud Computing Services
IT Infrastructure Modernization
Department of State IT Procurement
Microsoft Azure Services Contracts
Federal IT Services

Risk Flags

Limited Competition
Potential for Increased Costs
Lack of Detailed Performance Metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $14.1 million to MINBURN TECHNOLOGY GROUP, LLC. MICROSOFT AZURE

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 $14.1 million.

What is the period of performance?

Start: 2024-09-05. End: 2026-02-28.

What is the track record of Minburn Technology Group in delivering similar cloud services to federal agencies?

Assessing Minburn Technology Group's track record requires examining their past performance on federal contracts, particularly those involving Microsoft Azure or similar cloud platforms. Information on contract vehicles, performance ratings, and client agencies would be crucial. A review of their contract history might reveal experience with large-scale deployments, specific service offerings (e.g., IaaS, PaaS, SaaS), and adherence to security protocols like FedRAMP. Without specific past performance data readily available in this summary, it's difficult to definitively gauge their expertise. However, securing a contract of this magnitude from the Department of State suggests a level of established capability and trust within the federal IT contracting landscape. Further due diligence would involve looking at contract award histories and any available performance feedback.

How does the awarded price compare to market rates for similar Azure cloud services?

Directly comparing the awarded price of $14,053,586.10 to 'market rates' for Azure services is complex without a detailed breakdown of the services procured (e.g., compute hours, storage, specific software licenses, support levels). Microsoft Azure's pricing is tiered and can vary significantly based on volume discounts, reserved instances, and specific service configurations. For government contracts, the General Services Administration (GSA) schedules or other government-wide acquisition contracts (GWACs) often provide benchmark pricing. The 'limited' competition aspect also means the price might not reflect the most aggressive market competition. A thorough comparison would involve obtaining a detailed Bill of Materials or service catalog from the award and cross-referencing it with GSA schedules, other agency contracts for similar scope, and potentially direct Azure enterprise agreement pricing, adjusted for government-specific terms and conditions.

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

Key risks for this contract include potential cost overruns if the fixed-price model doesn't account for unforeseen service demands or price fluctuations in Azure services, performance issues if the contractor fails to meet service level agreements (SLAs), and security vulnerabilities inherent in cloud environments. Mitigation strategies likely involve robust contract oversight by the Department of State, clear performance metrics and SLAs defined in the contract, and adherence to strict cybersecurity protocols. The 'limited' competition might also pose a risk if it leads to suboptimal pricing or reduced innovation. The fixed-price structure itself is a mitigation for budget certainty but can shift risk to the contractor for scope changes. Understanding the specific clauses related to scope adjustments, service credits for SLA breaches, and data security responsibilities is crucial for a complete risk assessment.

How effective is the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' approach in ensuring value for taxpayers?

The effectiveness of 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' in ensuring value for taxpayers is variable and depends heavily on the justification for excluding sources. Ideally, this approach is used when specific circumstances (e.g., unique capabilities, urgent needs, or prior investments) necessitate limiting the pool of potential offerors. If the exclusion is well-justified and the remaining competition is still robust among qualified vendors, it can lead to good value. However, if sources are excluded without strong justification, it can limit price discovery, reduce competitive pressure, and potentially result in higher costs for taxpayers. The fact that only one award was made suggests the competition was indeed limited, making it imperative to scrutinize the rationale behind the source exclusions to confirm that taxpayer interests were protected and the best possible value was achieved.

What is the historical spending pattern for similar cloud services by the Department of State?

Analyzing historical spending patterns for similar cloud services by the Department of State is essential for context. This involves reviewing past contracts for cloud infrastructure, platform, or software services, noting the vendors, contract values, durations, and competition levels. Significant year-over-year increases or decreases in spending on cloud services could indicate evolving IT strategies, budget allocations, or shifts in technology adoption. Comparing the current $14M+ award to previous expenditures helps determine if this represents a substantial increase, a continuation of existing investment, or a consolidation of services. Understanding historical trends also aids in assessing whether the current contract represents a fair price compared to past procurements and whether the agency is effectively managing its cloud spending portfolio over time.

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: 1

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: $14,375,000

Exercised Options: $14,375,000

Current Obligation: $14,053,586

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SD34B

IDV Type: GWAC

Timeline