DoD's $1.27B Microsoft ESA Agreement with Dell Faces Scrutiny Amidst Limited Competition Concerns
Contract Overview
Contract Amount: $1,271,592,441 ($1.3B)
Contractor: Dell Marketing L.P.
Awarding Agency: Department of Defense
Start Date: 2022-11-01
End Date: 2025-10-31
Contract Duration: 1,095 days
Daily Burn Rate: $1.2M/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: MICROSOFT ESA AGREEMENT
Place of Performance
Location: MONTGOMERY, MONTGOMERY County, ALABAMA, 36114
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $1.27 billion to DELL MARKETING L.P. for work described as: MICROSOFT ESA AGREEMENT Key points: 1. Significant contract value of over $1.27 billion. 2. Competition appears limited, with Dell Marketing L.P. as the primary awardee. 3. Potential risks associated with sole-source or limited competition for software. 4. Spending falls within the Software Publishers sector.
Value Assessment
Rating: questionable
The contract's value of $1.27 billion is substantial. Benchmarking against similar enterprise agreements for Microsoft software is difficult without more detailed pricing information. The award mechanism (BPA CALL) suggests it might be a call against an existing agreement, potentially limiting direct price comparison.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded via BPA CALL, suggesting it may be a call against a pre-existing Basic Ordering Agreement. While 'FULL AND OPEN COMPETITION' is listed, the specific awardee being Dell Marketing L.P. for a Microsoft agreement raises questions about the breadth of actual competition.
Taxpayer Impact: The impact on taxpayers is unclear without a thorough price analysis. Limited competition could lead to higher costs than a fully competitive process.
Public Impact
Taxpayers may be overpaying for Microsoft software if competition was not robust. The Department of Defense relies heavily on software, making this a critical expenditure. Lack of transparency in the procurement process can erode public trust.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition for enterprise software.
- Potential for inflated pricing.
- Lack of transparency in award process.
Positive Signals
- Addresses critical software needs for the Air Force.
- Fixed-price contract provides some cost certainty.
Sector Analysis
This contract falls under the Software Publishers sector, which is a significant area of government spending. Benchmarks for enterprise software agreements vary widely based on software type, volume, and negotiated terms.
Small Business Impact
The data does not indicate any specific provisions or awards made to small businesses under this agreement. Further analysis would be needed to determine if small businesses had an opportunity to participate.
Oversight & Accountability
The use of BPA CALL warrants oversight to ensure it aligns with procurement regulations and provides fair pricing. Accountability rests with the contracting officers to justify the competition method and pricing.
Related Government Programs
- Software Publishers
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Potential for overpayment due to limited competition.
- Lack of transparency in the procurement process.
- Reliance on a single vendor for critical software.
- Contract duration of three years may not reflect evolving software needs or pricing.
Tags
software-publishers, department-of-defense, al, bpa-call, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.27 billion to DELL MARKETING L.P.. MICROSOFT ESA AGREEMENT
Who is the contractor on this award?
The obligated recipient is DELL MARKETING L.P..
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 $1.27 billion.
What is the period of performance?
Start: 2022-11-01. End: 2025-10-31.
What specific Microsoft products and licenses are covered under this $1.27 billion agreement, and how were the prices determined?
The provided data does not detail the specific Microsoft products or licenses included. The pricing determination is also not specified, but the 'FIRM FIXED PRICE' contract type suggests agreed-upon rates. A full review would require access to the contract's pricing schedules and justification documents.
Given the 'FULL AND OPEN COMPETITION' designation alongside a specific awardee (Dell) for Microsoft software, what was the actual competitive landscape?
The designation 'FULL AND OPEN COMPETITION' alongside a specific awardee like Dell Marketing L.P. for a Microsoft agreement suggests a potential discrepancy or a complex procurement vehicle. It's possible this was a call against a pre-existing, competitively awarded BPA, but the extent of actual market participation needs clarification.
How does the per-unit cost of this Microsoft Enterprise Agreement compare to other federal agencies or commercial entities purchasing similar software volumes?
Without specific unit pricing details or a clear list of software titles and quantities, a direct per-unit cost comparison is not feasible. Benchmarking would require detailed pricing data from this contract and comparable agreements to assess value for money effectively.
Industry Classification
NAICS: Information › Software Publishers › Software Publishers
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Francisco Partners Management, L.P.
Address: ONE DELL WAY, ROUND ROCK, TX, 78682
Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $1,271,592,441
Exercised Options: $1,271,592,441
Current Obligation: $1,271,592,441
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: N6600121A0083
IDV Type: BPA
Timeline
Start Date: 2022-11-01
Current End Date: 2025-10-31
Potential End Date: 2025-10-31 00:00:00
Last Modified: 2025-10-27
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