VA awards $577M contract for Salesforce to V3Gate, LLC, with 2 years remaining

Contract Overview

Contract Amount: $576,889,049 ($576.9M)

Contractor: V3gate, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-06-26

End Date: 2026-06-25

Contract Duration: 1,095 days

Daily Burn Rate: $526.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: AWARD NASA SEWP FOR SALESFORCE

Place of Performance

Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80921

State: Colorado Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $576.9 million to V3GATE, LLC for work described as: AWARD NASA SEWP FOR SALESFORCE Key points: 1. Contract awarded for IT services, specifically related to Salesforce, indicating a focus on cloud-based solutions. 2. The contract's duration of 1095 days (3 years) suggests a medium-term need for these services. 3. The award to V3Gate, LLC, highlights a specific vendor's role in supporting the VA's IT infrastructure. 4. The contract type is Firm Fixed Price, which generally offers cost certainty for the government. 5. The NAICS code 541519 points to a broad category of 'Other Computer Related Services', requiring further detail on specific deliverables. 6. The contract was awarded under Full and Open Competition after Exclusion of Sources, suggesting a competitive process with specific justifications for source exclusion.

Value Assessment

Rating: fair

Benchmarking the value of this $577 million contract requires more granular data on the specific Salesforce services procured. Without details on user licenses, modules, or support levels, direct comparison to similar contracts is challenging. However, the firm fixed-price structure suggests an attempt to control costs. The contract's value appears substantial, indicating a significant investment in Salesforce capabilities by the VA.

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'. This indicates that while the competition was generally open, specific sources may have been excluded based on certain criteria or justifications. The presence of two bidders suggests a degree of competition, but the exclusion of other potential sources warrants further investigation into the rationale.

Taxpayer Impact: A competitive process, even with exclusions, is generally beneficial for taxpayers as it aims to secure the best value. However, the specific reasons for excluding other sources could impact the final price and the range of innovative solutions available.

Public Impact

Veterans will benefit from improved IT services and potentially enhanced digital platforms supported by Salesforce. The contract delivers essential IT services, likely encompassing software licensing, implementation, customization, and ongoing support for Salesforce. The geographic impact is likely nationwide, supporting the VA's operations across all its facilities and for all beneficiaries. Workforce implications may include the need for VA personnel trained in Salesforce or reliance on contractor expertise for system management and utilization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on the Salesforce modules and services procured makes it difficult to assess true value for money.
The 'Exclusion of Sources' clause requires scrutiny to ensure it did not unduly limit competition and potentially increase costs.
The substantial award amount necessitates robust performance monitoring to ensure deliverables meet expectations and prevent cost overruns.

Positive Signals

The firm fixed-price contract type provides cost predictability for the VA.
Awarding to a single vendor (V3Gate, LLC) can streamline management and support if the vendor has proven capabilities.
The contract duration suggests a strategic, long-term commitment to leveraging Salesforce for VA operations.

Sector Analysis

The IT services sector, particularly cloud-based solutions like Salesforce, is a rapidly growing area for federal spending. Agencies are increasingly adopting Software-as-a-Service (SaaS) platforms to improve efficiency and data management. This contract fits within the broader trend of federal agencies modernizing their IT infrastructure and leveraging commercial off-the-shelf (COTS) software. Comparable spending benchmarks would depend on the specific Salesforce modules and user base size, but multi-million dollar awards for enterprise-level deployments are common.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this specific contract award. This suggests the contract was not specifically targeted towards small businesses. There is no information on subcontracting plans, so the impact on the small business ecosystem is unclear and likely minimal unless V3Gate, LLC voluntarily engages small businesses for support.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' contracting and program management offices. Accountability measures are usually embedded within the contract's performance work statement (PWS), with defined deliverables, milestones, and quality standards. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

NASA SEWP (Solutions for Enterprise-Wide Procurement)
VA IT Modernization Initiatives
Federal Cloud Computing Strategy
Salesforce Government Cloud Deployments

Risk Flags

Potential for scope creep given the broad NAICS code.
Need for clear performance metrics to ensure value for money.
Justification for 'Exclusion of Sources' requires review.
Dependence on a single vendor for critical IT infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $576.9 million to V3GATE, LLC. AWARD NASA SEWP FOR SALESFORCE

Who is the contractor on this award?

The obligated recipient is V3GATE, LLC.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $576.9 million.

What is the period of performance?

Start: 2023-06-26. End: 2026-06-25.

What specific Salesforce modules and services are included in this $577 million award, and what is the projected user base?

The provided data does not specify the exact Salesforce modules (e.g., Sales Cloud, Service Cloud, Marketing Cloud, Health Cloud) or the precise services (e.g., licensing, implementation, customization, ongoing support, training) covered by this $577 million award. Similarly, the projected number of users or the scope of the deployment is not detailed. This lack of specificity makes it challenging to assess the value for money and compare it against industry benchmarks. Understanding these details is crucial for evaluating the contract's effectiveness in meeting the VA's operational needs and ensuring that the significant investment aligns with strategic objectives.

How does the pricing of this contract compare to similar Salesforce deployments within other federal agencies or the private sector?

Direct price comparison is difficult without knowing the specific Salesforce modules, user counts, and service levels included in this $577 million VA contract. However, federal agencies often leverage enterprise agreements and bulk purchasing power through contract vehicles like NASA SEWP to achieve favorable pricing. The 'Full and Open Competition after Exclusion of Sources' suggests a competitive process, which should theoretically drive competitive pricing. Benchmarking would require access to detailed pricing structures for comparable deployments, considering factors like user licenses, feature sets, and support tiers. Generally, large-scale enterprise deployments of platforms like Salesforce can range from tens to hundreds of millions of dollars over several years, depending on the scale and complexity.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract to ensure successful delivery?

The provided data does not detail the specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. Typically, such a large IT services contract would include robust KPIs related to system uptime, response times for support requests, data security compliance, and successful completion of project milestones. SLAs would define the expected level of service and remedies for non-performance. The Department of Veterans Affairs' program managers and contracting officers are responsible for establishing and monitoring these metrics to ensure V3Gate, LLC meets its contractual obligations and delivers the expected value from the Salesforce platform.

What is V3Gate, LLC's track record with large federal IT contracts, particularly those involving enterprise software like Salesforce?

Information on V3Gate, LLC's specific track record with large federal IT contracts, especially those involving enterprise software like Salesforce, is not detailed in the provided data. A comprehensive assessment would require reviewing their past performance on similar contracts, including client satisfaction, adherence to schedule and budget, and technical execution. Federal procurement databases and past performance reviews would offer insights into their capabilities and reliability. Given the substantial value of this award, the VA would have likely conducted due diligence on V3Gate, LLC's experience and capacity to deliver complex Salesforce solutions.

What is the historical spending pattern for Salesforce or similar CRM/IT services at the Department of Veterans Affairs?

The provided data focuses on a single award and does not offer historical spending patterns for Salesforce or similar services at the VA. To understand historical spending, one would need to analyze aggregate data from federal procurement databases (like FPDS) for the VA over several fiscal years, searching for contracts related to CRM, Salesforce, or broader IT services. This would reveal trends in investment, vendor choices, and contract values, providing context for the current $577 million award. Such analysis could indicate whether this award represents an increase, decrease, or continuation of previous spending levels in this category.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › 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: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 555 MIDDLE CREEK PKWY STE 120, COLORADO SPRINGS, CO, 80921

Business Categories: Category Business, Hispanic American Owned Business, Limited Liability Corporation, Minority Owned Business, Partnership or Limited Liability Partnership, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $932,824,159

Exercised Options: $576,889,049

Current Obligation: $576,889,049

Actual Outlays: $566,615,382

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SD27B

IDV Type: GWAC

Timeline