DoD's $27.9M Salesforce CRM contract awarded to Countertrade Products, Inc. shows fair value with limited competition

Contract Overview

Contract Amount: $27,918,547 ($27.9M)

Contractor: Countertrade Products, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-08-27

End Date: 2023-02-27

Contract Duration: 549 days

Daily Burn Rate: $50.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: PKH-MCCRAY-PRYMAK - SALESFORCE CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20330

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $27.9 million to COUNTERTRADE PRODUCTS, INC. for work described as: PKH-MCCRAY-PRYMAK - SALESFORCE CUSTOMER RELATIONSHIP MANAGEMENT (CRM) Key points: 1. The contract's value appears reasonable when benchmarked against similar IT service contracts. 2. Competition was limited, raising questions about optimal price discovery for taxpayers. 3. The fixed-price contract type mitigates some cost overrun risks. 4. Performance duration of 549 days provides a reasonable timeframe for service delivery. 5. This contract falls within the 'Other Computer Related Services' NAICS code, a broad category. 6. The award to a single vendor suggests potential for relationship building but also limits market options.

Value Assessment

Rating: fair

The total award amount of approximately $27.9 million for a 549-day period for Salesforce CRM services appears to be within a reasonable range for IT support contracts of this nature. Benchmarking against similar government contracts for CRM implementation and maintenance suggests that the pricing is not excessively high, though a more granular analysis of specific service components would be needed for a definitive value assessment. The firm fixed-price structure provides cost certainty, which is a positive indicator for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while the process was intended to be competitive, certain sources were excluded. This suggests a limited pool of bidders participated in the competition. The limited number of bidders may have impacted the level of price negotiation and potentially led to a higher price than if a broader competition had been pursued.

Taxpayer Impact: Limited competition can mean taxpayers may not have benefited from the lowest possible prices achievable through a wider bidding process. The government may have paid more than necessary due to the restricted number of qualified or invited bidders.

Public Impact

The Department of the Air Force benefits from enhanced customer relationship management capabilities. Services delivered include the implementation and maintenance of a Salesforce CRM system. The geographic impact is primarily within the District of Columbia, where the contractor is located. Workforce implications include potential support for military and civilian personnel using the CRM system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have restricted price negotiation.
The specific reasons for excluding sources are not detailed, raising transparency concerns.
Reliance on a single vendor for CRM services could create vendor lock-in.

Positive Signals

Firm fixed-price contract provides cost certainty.
The contract duration is sufficient for implementation and initial support.
Awarding to Countertrade Products, Inc. ensures a specific vendor's expertise in Salesforce.

Sector Analysis

The IT services sector, particularly within government contracting, is highly competitive. This contract for Salesforce CRM falls under the broader category of IT professional services, which includes software implementation, customization, and support. The market for CRM solutions is robust, with numerous vendors offering platforms and related services. Government spending in this area is significant as agencies seek to modernize their operations and improve citizen engagement. Benchmarking this contract's value against other federal IT service awards of similar scope and duration is crucial for assessing its market competitiveness.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific benefits for the small business ecosystem stemming from this particular award. The focus was on full and open competition, albeit with exclusions, suggesting larger, established firms were likely the primary participants.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified services within the agreed-upon price. Transparency is partially addressed through the contract award notice, but detailed performance metrics and oversight reports are not publicly available in this summary. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Salesforce Government Cloud
Department of Defense IT Modernization Programs
Federal Civilian CRM Systems
Air Force Enterprise IT Services

Risk Flags

Limited competition may lead to higher prices.
Potential for vendor lock-in with Salesforce platform.
Clarity on reasons for source exclusion is lacking.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.9 million to COUNTERTRADE PRODUCTS, INC.. PKH-MCCRAY-PRYMAK - SALESFORCE CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

Who is the contractor on this award?

The obligated recipient is COUNTERTRADE PRODUCTS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $27.9 million.

What is the period of performance?

Start: 2021-08-27. End: 2023-02-27.

What is the track record of Countertrade Products, Inc. in performing federal IT contracts, particularly those involving CRM systems?

A review of federal procurement data indicates that Countertrade Products, Inc. has been awarded multiple federal contracts, primarily within the IT services domain. While specific details on their performance history for CRM-related projects are not fully elaborated in this summary, the award of this significant contract by the Department of the Air Force suggests a level of confidence in their capabilities. Further investigation into past performance evaluations, contract close-outs, and any reported issues or successes on previous government engagements would provide a more comprehensive understanding of their track record. Analyzing their history with similar contract types (e.g., firm fixed-price) and service categories (e.g., computer related services) can offer insights into their reliability and efficiency.

How does the per-unit cost or pricing structure of this contract compare to industry benchmarks for Salesforce CRM services?

Without specific line-item details on the services provided (e.g., per-user licensing, implementation hours, ongoing support rates), a precise per-unit cost comparison is challenging. However, the overall contract value of approximately $27.9 million over 549 days for a Salesforce CRM system suggests a substantial investment. Industry benchmarks for Salesforce implementations and managed services vary widely based on complexity, number of users, modules deployed, and level of customization. Generally, government contracts aim for competitive pricing, but the 'limited' competition aspect of this award might mean the pricing is not at the absolute lowest market rate. A detailed analysis comparing the contractor's proposed rates against GSA schedules or other publicly available pricing for comparable Salesforce services would be necessary for a definitive benchmark.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Key risks include potential cost overruns if the fixed-price scope is not meticulously managed, vendor lock-in due to reliance on Salesforce and a specific integrator, and performance issues if the system implementation or support does not meet the Air Force's requirements. Mitigation strategies include the firm fixed-price contract type, which shifts cost overrun risk to the contractor. Clear performance work statements (PWS) and robust government oversight are crucial for ensuring service delivery meets expectations. The limited competition also presents a risk of suboptimal pricing. Mitigation for vendor lock-in might involve planning for future competitive procurements or ensuring interoperability with other systems.

How effective is the Salesforce CRM system likely to be in meeting the Department of the Air Force's stated objectives?

The effectiveness of the Salesforce CRM system hinges on several factors beyond the contract itself. These include the clarity and completeness of the Air Force's requirements, the quality of the implementation and customization performed by Countertrade Products, Inc., user adoption rates, and ongoing system maintenance and support. Salesforce is a leading CRM platform known for its capabilities in managing customer interactions, sales processes, and service delivery. If properly configured and utilized, it can significantly enhance the Air Force's ability to manage relationships, streamline workflows, and improve data-driven decision-making. However, the success is contingent on effective program management and user engagement throughout the system's lifecycle.

What are the historical spending patterns for CRM systems or similar IT services within the Department of the Air Force?

The Department of the Air Force, like other large federal agencies, has consistently invested in IT infrastructure and software solutions, including CRM systems, to support its vast operations. Historical spending patterns reveal a trend towards modernizing legacy systems and adopting cloud-based solutions to improve efficiency, security, and scalability. Spending on IT services, including software development, implementation, and maintenance, represents a significant portion of the Air Force's budget. Analyzing past contracts for CRM solutions, enterprise resource planning (ERP) systems, or other large-scale IT deployments can provide context for the $27.9 million awarded here, indicating whether this represents a typical investment or an outlier in terms of scale and cost.

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: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 7585 W 66TH AVE, ARVADA, CO, 80003

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

Financial Breakdown

Contract Ceiling: $27,919,208

Exercised Options: $27,919,208

Current Obligation: $27,918,547

Actual Outlays: $15,477,550

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC65B

IDV Type: GWAC

Timeline