FCC awards $12.1M Microsoft ELA to GovConnection, Inc. for IT services

Contract Overview

Contract Amount: $12,140,607 ($12.1M)

Contractor: Govconnection Inc

Awarding Agency: Federal Communications Commission

Start Date: 2023-09-22

End Date: 2026-09-29

Contract Duration: 1,103 days

Daily Burn Rate: $11.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MICROSOFT ELA

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Federal Communications Commission obligated $12.1 million to GOVCONNECTION INC for work described as: MICROSOFT ELA Key points: 1. Contract value represents a significant investment in enterprise software licensing. 2. Competition dynamics suggest a potentially competitive bidding process for this award. 3. Performance period extends over three years, indicating a long-term need. 4. The contract type is Firm Fixed Price, providing cost certainty. 5. This award falls under 'Other Computer Related Services' NAICS code. 6. The contractor, GovConnection Inc., has a history of federal contract awards.

Value Assessment

Rating: good

The contract value of $12.1 million for a three-year Microsoft Enterprise License Agreement (ELA) appears reasonable given the scope of enterprise software licensing for a federal agency. Benchmarking against similar ELAs is challenging without specific software details, but the firm fixed-price structure offers predictability. The award to GovConnection Inc. suggests they met the agency's requirements and pricing expectations.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of 5 bids suggests a healthy level of competition, which typically drives better pricing and value for the government. This approach ensures that the government is likely to receive competitive offers.

Taxpayer Impact: Full and open competition maximizes taxpayer value by ensuring that the government receives the most advantageous offers through a broad bidding process.

Public Impact

The Federal Communications Commission (FCC) benefits from this contract through access to essential Microsoft software licenses. This contract supports the FCC's IT infrastructure and operational needs. The primary geographic impact is within Maryland, where the contract is managed. The contract supports the IT workforce by providing necessary software tools.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with enterprise-wide software agreements.
Ensuring ongoing cost-effectiveness of the ELA beyond the initial term requires careful management.

Positive Signals

Firm Fixed Price contract provides budget certainty.
Full and open competition suggests a competitive award process.
Long-term ELA can streamline software procurement and management.

Sector Analysis

This contract falls within the broader Information Technology sector, specifically focusing on software licensing and IT services. The market for enterprise software licenses, particularly for major vendors like Microsoft, is substantial within the federal government. This contract represents a typical procurement for agencies seeking to standardize and manage their software assets efficiently.

Small Business Impact

While this contract was awarded under full and open competition and does not appear to have a specific small business set-aside, the prime contractor, GovConnection Inc., may engage small businesses for subcontracting opportunities. Analysis of subcontracting plans would be necessary to determine the direct impact on the small business ecosystem.

Oversight & Accountability

The contract is subject to standard federal procurement oversight. The Federal Communications Commission's contracting office is responsible for monitoring performance and compliance. Transparency is maintained through contract databases like FPDS. Inspector General oversight would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Microsoft Enterprise Agreements
Federal IT Services Contracts
Software Licensing Procurements

Risk Flags

Potential for over-licensing if usage is not actively managed.
Risk of vendor lock-in limiting future flexibility.
ELA terms require careful monitoring for cost-effectiveness.

Frequently Asked Questions

What is this federal contract paying for?

Federal Communications Commission awarded $12.1 million to GOVCONNECTION INC. MICROSOFT ELA

Who is the contractor on this award?

The obligated recipient is GOVCONNECTION INC.

Which agency awarded this contract?

Awarding agency: Federal Communications Commission (Federal Communications Commission).

What is the total obligated amount?

The obligated amount is $12.1 million.

What is the period of performance?

Start: 2023-09-22. End: 2026-09-29.

What is the historical spending pattern for Microsoft ELA's at the FCC?

Analyzing historical spending on Microsoft ELAs at the FCC requires access to detailed procurement data over several fiscal years. Without specific historical data for the FCC's Microsoft ELA procurements, it's difficult to establish a precise spending pattern. However, federal agencies typically renew or re-compete ELAs every 3-5 years. The current award of $12.1 million over approximately three years suggests a significant, but potentially consistent, level of investment in Microsoft software. Agencies often aim for cost savings through ELAs compared to individual license purchases, and trends may show efforts to consolidate licenses or negotiate better terms over time. Fluctuations could be driven by changes in agency size, IT modernization initiatives, or shifts in software needs.

How does the per-user cost of this ELA compare to industry benchmarks?

Determining the precise per-user cost for this $12.1 million Microsoft ELA is not feasible without knowing the exact number of users or devices covered, and the specific Microsoft products and license types included (e.g., Office 365 E3, E5, Windows licenses). Federal ELAs often cover a broad suite of products for all users within an agency. Industry benchmarks for Microsoft 365 licenses vary significantly based on the plan and volume. For example, commercial rates for Microsoft 365 E3 can range from $30-$40 per user per month. If this ELA covers, for instance, 3,000 users over 36 months at $12.1 million, the average annual cost per user would be approximately $1,344, or $112 per user per month, which appears high compared to typical commercial rates. However, federal ELAs may include additional services, support, or specific compliance features that justify a higher cost, and direct comparison requires detailed product breakdowns.

What is GovConnection Inc.'s track record with similar federal contracts?

GovConnection Inc. has a substantial track record of securing federal contracts, particularly in the IT hardware, software, and services domain. Publicly available data indicates numerous awards across various federal agencies, often through large contract vehicles like NASA SEWP or IT Schedule 70 (now IT Professional Services). Their awards frequently involve software licensing, including Microsoft products, as well as hardware procurement and IT solutions. This experience suggests familiarity with federal procurement regulations, agency IT needs, and the competitive bidding process. Their consistent success in winning federal contracts implies a competitive pricing strategy and the ability to meet agency requirements, although the specific performance and value of each contract would require individual review.

What are the potential risks associated with this type of enterprise software agreement?

Enterprise License Agreements (ELAs) like this one carry several potential risks. A primary concern is vendor lock-in; once an agency commits to a specific vendor's ecosystem, it can be difficult and costly to switch to alternative solutions, potentially limiting future flexibility and negotiation power. Another risk is ensuring the ELA remains cost-effective over its term and beyond. Without diligent tracking of actual software usage and needs, agencies might over-license, paying for unused software. Furthermore, the complexity of ELA terms and conditions can lead to misunderstandings or missed opportunities for optimization. Finally, reliance on a single vendor for critical software infrastructure can pose a risk if that vendor experiences service disruptions or significant price increases upon renewal.

How does the duration of this contract (1103 days) impact its value proposition?

The contract duration of 1103 days (approximately three years) is fairly standard for enterprise software licensing agreements. This duration allows the Federal Communications Commission (FCC) to achieve a degree of stability and predictability in its software procurement, avoiding the administrative overhead of frequent re-procurements. For the vendor, it provides a guaranteed revenue stream. From a value perspective, a multi-year ELA often allows for better volume discounts and predictable budgeting compared to shorter-term or ad-hoc purchases. However, it also means the FCC is committed to these specific software products and pricing for the duration, potentially missing out on newer technologies or more cost-effective solutions that might emerge. The value proposition is maximized if the software remains critical and the pricing remains competitive throughout the term.

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

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2275 RESEARCH BOULEVARD, ROCKVILLE, MD, 20850

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $25,274,505

Exercised Options: $24,774,784

Current Obligation: $12,140,607

Actual Outlays: $11,421,544

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC36B

IDV Type: GWAC

Timeline