DoD's $20.8M Sybase Software Contract: A Deep Dive into Value, Competition, and Sector Impact

Contract Overview

Contract Amount: $20,811,146 ($20.8M)

Contractor: Sybase, Inc.

Awarding Agency: Department of Defense

Start Date: 2014-12-29

End Date: 2019-09-30

Contract Duration: 1,736 days

Daily Burn Rate: $12.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF NEW LICENSES AND URTC

Place of Performance

Location: CHARLESTON, CHARLESTON County, SOUTH CAROLINA, 29401

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $20.8 million to SYBASE, INC. for work described as: IGF::OT::IGF NEW LICENSES AND URTC Key points: 1. Analysis indicates a fair to good value proposition, with unit costs appearing reasonable against market benchmarks. 2. The contract was awarded under full and open competition, suggesting a competitive pricing environment. 3. Risk indicators are low, with a firm fixed-price structure and a clear performance period. 4. This contract represents a small fraction of the broader software publishing market within the defense sector. 5. The software is critical for operational functions within the Department of the Navy. 6. Performance is tracked through standard delivery order mechanisms, with no specific IG oversight highlighted.

Value Assessment

Rating: fair

The total contract value of $20.8 million over approximately five years suggests a moderate annual spend. Benchmarking against similar software licenses for enterprise-level systems indicates that the pricing is within expected ranges, though specific per-unit cost data is not publicly available for direct comparison. The firm fixed-price nature of the contract provides cost certainty for the government, mitigating risk of cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, implying that multiple vendors had the opportunity to bid. This process is designed to foster price discovery and ensure the government receives competitive pricing. The number of bidders is not specified, but the competition type suggests a robust bidding environment.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces, ensuring that government funds are used efficiently.

Public Impact

The Department of the Navy benefits from access to essential software for its operations. This contract supports the delivery of critical IT infrastructure and services within the naval forces. The geographic impact is primarily within Department of Defense facilities where the software is deployed. Workforce implications are indirect, supporting IT personnel who manage and utilize the software.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if alternative solutions are not considered in future procurements.
Reliance on a single vendor for critical software could pose supply chain risks.
Ensuring ongoing support and maintenance costs remain competitive over the contract lifecycle.

Positive Signals

Firm fixed-price contract provides budget predictability.
Full and open competition suggests a competitive initial award.
Clear performance period reduces uncertainty.

Sector Analysis

The software publishing industry (NAICS 511210) is a significant sector within the broader IT market. This contract falls within the defense sector's IT spending, which is substantial. Comparable spending benchmarks for enterprise software licenses within large government agencies can range from millions to tens of millions annually, depending on the scope and criticality of the software.

Small Business Impact

There is no indication that this contract included small business set-asides. Given the nature of enterprise software licensing, it is likely that the primary awardee was a large business. Subcontracting opportunities for small businesses are not explicitly detailed but could exist for implementation or support services.

Oversight & Accountability

Oversight is managed through standard contract administration processes within the Department of the Navy. The firm fixed-price nature and defined delivery orders provide a framework for accountability. Specific Inspector General (IG) involvement is not highlighted, suggesting no major issues have been flagged requiring heightened scrutiny.

Related Government Programs

Department of Defense IT Procurement
Navy Software Licensing
Enterprise Software Solutions
Software Publishers Contracts

Risk Flags

Potential for vendor lock-in
Reliance on single vendor for critical software
Cybersecurity vulnerabilities
Long-term maintenance cost escalation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.8 million to SYBASE, INC.. IGF::OT::IGF NEW LICENSES AND URTC

Who is the contractor on this award?

The obligated recipient is SYBASE, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $20.8 million.

What is the period of performance?

Start: 2014-12-29. End: 2019-09-30.

What is the track record of Sybase, Inc. (now SAP) with government contracts?

Sybase, Inc., now part of SAP, has a long history of providing software solutions to government agencies, including the Department of Defense. Historically, Sybase products have been utilized for database management, business intelligence, and application development. Government contracts awarded to Sybase and subsequently SAP often involve significant dollar values and cover a wide range of IT needs. Analyzing past performance data, such as contract modifications, past performance reviews, and any reported disputes or terminations, would provide a clearer picture of their reliability and effectiveness as a government contractor. However, specific details on this particular contract's performance history beyond its award and completion dates are not readily available in the provided data.

How does the $20.8 million contract value compare to similar software procurements by the Department of the Navy?

The $20.8 million contract value for Sybase software over approximately five years represents an average annual spend of roughly $4.16 million. This figure is moderate when compared to the Department of the Navy's overall IT budget, which runs into billions of dollars annually. Similar procurements for enterprise-level software, such as operating systems, database management systems, or specialized application suites, often fall within this range or can be significantly higher depending on the number of users, features required, and the criticality of the application. Without knowing the specific software product and its intended use (e.g., number of licenses, user base, specific modules), a precise comparison is difficult. However, it does not appear to be an outlier in terms of magnitude for large-scale government software acquisitions.

What are the primary risks associated with this type of software licensing contract?

The primary risks associated with this type of software licensing contract include vendor lock-in, where the government becomes heavily reliant on a single vendor's technology, making future transitions costly and complex. There's also the risk of escalating maintenance and support costs over time, especially if contract renewals are not competitively bid. Cybersecurity risks are inherent with any software, requiring continuous vigilance and updates to protect against vulnerabilities. Furthermore, if the software becomes outdated or unsupported, it could lead to operational inefficiencies or the need for costly replacements. The firm fixed-price nature mitigates cost overrun risks during the performance period, but long-term value depends on ongoing competitive pricing for renewals and support.

How effective is full and open competition in ensuring value for money for software procurements like this?

Full and open competition is generally considered the most effective method for ensuring value for money in government procurements, including software licensing. By allowing all responsible sources to submit bids, it creates a competitive environment that incentivizes vendors to offer their best pricing and technical solutions. This process helps prevent price gouging and encourages innovation. For this specific contract, the full and open competition likely resulted in a more favorable price than a sole-source or limited competition award. However, the ultimate value for money also depends on the government's ability to accurately define its requirements, evaluate proposals effectively, and manage the contract post-award to ensure the software meets its intended operational needs throughout its lifecycle.

What is the historical spending trend for software publishers like Sybase within the Department of Defense?

Historical spending trends for software publishers within the Department of Defense (DoD) show a consistent and substantial investment in IT solutions. The DoD is one of the largest government consumers of software, procuring licenses, maintenance, and support services across a vast array of platforms and applications. Spending on software publishers like Sybase (and its successor SAP) has historically been significant, driven by the need for robust database management, enterprise resource planning (ERP), cybersecurity tools, and specialized operational software. While specific historical data for Sybase within the DoD is not detailed here, the overall trend indicates a continuous demand for such services, often involving multi-year contracts valued in the millions or even billions of dollars across various vendors and categories. This sustained spending reflects the critical role of software in modern military operations.

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: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: SAP AG (UEI: 316268655)

Address: 6550 ROCK SPRING DRIVE, BETHESDA, MD, 20817

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $20,811,146

Exercised Options: $20,811,146

Current Obligation: $20,811,146

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NOT OBTAINED - WAIVED

Parent Contract

Parent Award PIID: DAAB1599A1003

IDV Type: IDC

Timeline