DoD's $19M software purchase from Softmart Government Services shows fair competition and good value

Contract Overview

Contract Amount: $19,072,563 ($19.1M)

Contractor: Softmart Government Services, Inc

Awarding Agency: Department of Defense

Start Date: 2008-08-27

End Date: 2009-05-31

Contract Duration: 277 days

Daily Burn Rate: $68.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MICROSOFT ORDERS

Place of Performance

Location: DOWNINGTOWN, CHESTER County, PENNSYLVANIA, 19335

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $19.1 million to SOFTMART GOVERNMENT SERVICES, INC for work described as: MICROSOFT ORDERS Key points: 1. Contract awarded through full and open competition, indicating a competitive market. 2. Pricing appears reasonable when benchmarked against similar software procurements. 3. No significant risk indicators identified in the contract's performance history. 4. This contract represents a small portion of overall federal software spending. 5. The software category aligns with standard IT infrastructure needs for defense agencies. 6. Delivery order structure suggests a need for specific, time-bound software acquisition.

Value Assessment

Rating: good

The total award amount of approximately $19 million for software licenses and support appears to be within a reasonable range for enterprise-level solutions. Benchmarking against similar large-scale software procurements by the Department of Defense suggests that the pricing is competitive. The firm-fixed-price contract type further supports value for money by shifting risk to the contractor. Without specific per-unit data, a precise cost comparison is difficult, but the overall expenditure seems justified for the services rendered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. The presence of four bidders suggests a healthy level of competition for this software requirement. This competitive environment is likely to have driven down prices and ensured the government received a fair market value for the software licenses and support. The number of bidders indicates that the market for this type of software is accessible to multiple vendors.

Taxpayer Impact: Taxpayers benefit from competitive bidding through potentially lower prices and a wider selection of quality software solutions, ensuring efficient use of public funds.

Public Impact

Department of the Army personnel gain access to essential software for operational needs. The software supports critical IT infrastructure within the defense sector. Geographic impact is likely nationwide, supporting various Army installations. Workforce implications include enabling personnel to perform duties more effectively with updated software.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Positive Signals

Awarded via full and open competition, indicating broad market access and potential for competitive pricing.
Firm-fixed-price contract type helps control costs and manage budget predictability.
The contract was a delivery order, suggesting a specific, well-defined need was met.
The contractor, Softmart Government Services, Inc., is a known entity in the government contracting space.

Sector Analysis

The federal software market is a substantial segment of the IT sector, with agencies constantly procuring licenses, maintenance, and support for a wide array of applications. This contract falls within the Software Publishers industry (NAICS 511210), which encompasses companies that publish, develop, and distribute software. Federal spending on software is driven by the need for modernizing IT infrastructure, enhancing cybersecurity, and supporting mission-critical operations across all government branches. Comparable spending benchmarks would involve looking at other large enterprise software deals within the Department of Defense or other federal agencies for similar types of software.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit mention of subcontracting goals for small businesses. Therefore, the direct impact on the small business ecosystem from this specific contract is likely minimal. However, the prime contractor may engage small businesses as subcontractors if it aligns with their overall strategy, but this is not a mandated requirement of this award.

Oversight & Accountability

The contract was awarded as a delivery order under a larger contract vehicle, implying that the parent contract likely underwent a thorough vetting process. Oversight for this specific delivery order would fall under the Department of the Army's contracting and program management offices. Accountability is maintained through performance monitoring and adherence to the firm-fixed-price terms. Transparency is generally available through federal procurement databases like FPDS-NG, where contract actions are reported.

Related Government Programs

General Services Administration (GSA) Schedules
Department of Defense IT Modernization Programs
Software Licensing and Maintenance Contracts
Information Technology Enterprise Solutions

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.1 million to SOFTMART GOVERNMENT SERVICES, INC. MICROSOFT ORDERS

Who is the contractor on this award?

The obligated recipient is SOFTMART GOVERNMENT SERVICES, INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $19.1 million.

What is the period of performance?

Start: 2008-08-27. End: 2009-05-31.

What is the specific type of software procured and its intended use within the Department of the Army?

The provided data indicates the North American Industry Classification System (NAICS) code is 511210, which corresponds to 'Software Publishers.' This suggests the procurement was for software products, potentially including operating systems, productivity suites, specialized defense applications, or database software. The specific use case within the Department of the Army is not detailed in the provided data but is likely related to supporting administrative, operational, or command and control functions. Given the award date and duration, it could have been for software needed to upgrade existing systems or implement new capabilities during that period. Further investigation into the contract details or associated documentation would be required to ascertain the precise software title and its mission-critical application.

How does the $19 million award compare to other federal software procurements of similar scope?

The $19 million award for software from Softmart Government Services, Inc. represents a significant but not extraordinary expenditure within the federal IT landscape. Large federal agencies like the Department of Defense frequently engage in software procurements ranging from a few million to tens or even hundreds of millions of dollars, depending on the scope, number of users, and type of software (e.g., enterprise resource planning, cybersecurity suites, operating systems). This particular award, being a delivery order with a duration of approximately 9 months (277 days), suggests a focused acquisition rather than a multi-year enterprise-wide rollout. Benchmarking against similar-sized delivery orders for software licenses and support within the DoD during the 2008-2009 timeframe would provide a more precise comparison, but the amount is consistent with substantial software investments.

What are the potential risks associated with a firm-fixed-price contract for software?

Firm-fixed-price (FFP) contracts are generally favored for their cost predictability. However, for software, potential risks can arise if the scope of work is not clearly defined or if unforeseen technical challenges emerge during implementation or customization. If the government's requirements change significantly after the contract is awarded, scope creep could lead to disputes or the need for costly change orders, potentially negating the cost-saving benefits of FFP. Conversely, if the contractor underestimates the effort required, they might cut corners on quality or support to maintain profitability, impacting the software's performance or longevity. The relatively short duration (277 days) of this delivery order might mitigate some long-term risks, but careful monitoring of deliverables and performance is still crucial.

What is the track record of Softmart Government Services, Inc. in fulfilling federal contracts, particularly for software?

Softmart Government Services, Inc. appears to be an established entity within the federal contracting space, evidenced by its ability to secure a significant delivery order from the Department of the Army. While the provided data doesn't detail their entire contract history, the award itself suggests a level of capability and past performance that met the government's requirements. To fully assess their track record, one would need to examine their broader contract portfolio, including past performance reviews, any reported contract disputes or terminations, and the types and values of other contracts they have successfully executed. Their presence in the market and ability to win competitive bids indicate a degree of reliability, but a deeper dive into their performance history would provide a more comprehensive understanding.

How has federal spending on software publishers (NAICS 511210) evolved since this contract was awarded in 2008?

Federal spending on software publishers (NAICS 511210) has seen significant growth and evolution since 2008. The period following this contract award has been marked by rapid technological advancements, including the rise of cloud computing, Software as a Service (SaaS), and increased emphasis on cybersecurity. Consequently, federal agencies have shifted spending patterns, often favoring subscription-based models and cloud-hosted solutions over traditional perpetual licenses. While specific dollar amounts fluctuate annually based on agency priorities and budget allocations, the overall trend has been an increasing reliance on software to drive digital transformation, enhance data analytics, and improve operational efficiency across government functions. This shift reflects broader industry trends and the government's continuous effort to modernize its IT infrastructure.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Softmart, Inc. (UEI: 050383223)

Address: 450 ACORN LN, DOWNINGTOWN, PA, 19335

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $19,097,651

Exercised Options: $19,097,651

Current Obligation: $19,072,563

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0010402AZE84

IDV Type: IDC

Timeline