DOE awards $150M for Commercial Cloud Services to Amazon Web Services, Inc
Contract Overview
Contract Amount: $150,000 ($150.0K)
Contractor: Amazon WEB Services, Inc.
Awarding Agency: Department of Energy
Start Date: 2026-04-01
End Date: 2027-04-18
Contract Duration: 382 days
Daily Burn Rate: $393/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: COMMERCIAL CLOUD SERVICES
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20585
Plain-Language Summary
Department of Energy obligated $150,000 to AMAZON WEB SERVICES, INC. for work described as: COMMERCIAL CLOUD SERVICES Key points: 1. Significant contract value of $150 million over its period. 2. Sole-source award to Amazon Web Services (AWS) raises competition concerns. 3. Potential for higher costs due to lack of competitive bidding. 4. IT sector spending on cloud services is a growing area.
Value Assessment
Rating: questionable
Pricing is difficult to assess without competitive benchmarks. As a sole-source award, there's a risk of paying a premium compared to a competed contract. Further analysis would require access to detailed pricing structures.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there was no competitive pressure to drive down prices.
Taxpayer Impact: The lack of competition may result in the government overpaying for these essential cloud services, impacting the efficient use of taxpayer funds.
Public Impact
Citizens may be paying more for cloud services due to the absence of competition. Government reliance on a single provider for critical infrastructure can pose risks. Transparency in pricing and service delivery is crucial for public trust.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for overpayment
Positive Signals
- Essential IT service
- Long-term contract
Sector Analysis
The Department of Energy is procuring essential cloud computing infrastructure and hosting services. Spending in this sector has rapidly increased across federal agencies as they modernize IT systems and leverage cloud capabilities for efficiency and scalability.
Small Business Impact
There is no indication that small businesses were involved in this specific award. Federal cloud service contracts, especially large ones, often go to major providers, potentially limiting opportunities for smaller IT firms.
Oversight & Accountability
Oversight is needed to ensure the Department of Energy is receiving fair value and that the services provided meet contractual requirements. Regular performance reviews and cost audits would be beneficial.
Related Government Programs
- Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Sole-source award limits competition.
- Potential for inflated pricing.
- Lack of transparency in justification.
- Vendor lock-in risk.
- Dependency on a single provider.
Tags
computing-infrastructure-providers-data-, department-of-energy, dc, purchase-order, 100k-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $150,000 to AMAZON WEB SERVICES, INC.. COMMERCIAL CLOUD SERVICES
Who is the contractor on this award?
The obligated recipient is AMAZON WEB SERVICES, INC..
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $150,000.
What is the period of performance?
Start: 2026-04-01. End: 2027-04-18.
What is the justification for awarding this contract on a sole-source basis?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of viable alternatives. Without further documentation, it's unclear why this essential IT service was not competed. Agencies must provide detailed rationale for sole-source procurements to ensure they are in the government's best interest and comply with procurement regulations.
What are the risks associated with relying solely on Amazon Web Services for these services?
Sole reliance on AWS introduces vendor lock-in, potential price increases without competitive pressure, and a single point of failure for critical infrastructure. Security vulnerabilities or service disruptions from AWS could significantly impact the Department of Energy's operations. Diversifying cloud providers or maintaining robust contingency plans can mitigate these risks.
How will the effectiveness of these cloud services be measured and ensured?
Effectiveness will be measured through Service Level Agreements (SLAs) outlined in the contract, focusing on uptime, performance, and security. The Department of Energy should implement rigorous monitoring and regular performance reviews to ensure AWS meets these standards. Periodic audits and user feedback mechanisms can further assess the effectiveness and value derived from the services.
Industry Classification
NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
Product/Service Code: IT AND TELECOM - APLLICATIONS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 410 TERRY AVE N, SEATTLE, WA, 98109
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $3,492,883
Exercised Options: $851,650
Current Obligation: $150,000
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Timeline
Start Date: 2026-04-01
Current End Date: 2027-04-18
Potential End Date: 2030-04-18 00:00:00
Last Modified: 2026-04-01
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