GSA Awards Oracle $17.3M for Systems Support, Raising Questions on Value and Competition
Contract Overview
Contract Amount: $17,297,521 ($17.3M)
Contractor: Oracle Corporation
Awarding Agency: General Services Administration
Start Date: 2003-06-01
End Date: 2005-01-30
Contract Duration: 609 days
Daily Burn Rate: $28.4K/day
Number of Offers Received: 3
Pricing Type: LABOR HOURS
Sector: IT
Official Description: ORACLE SYSTEMS SUPPORT
Place of Performance
Location: DISTRICT OF COLUMBIA, 20000
Plain-Language Summary
General Services Administration obligated $17.3 million to ORACLE CORPORATION for work described as: ORACLE SYSTEMS SUPPORT Key points: 1. Significant contract value of $17.3 million for Oracle systems support. 2. Sole reliance on Oracle Corporation suggests limited competition. 3. Contract duration and pricing warrant scrutiny for potential cost inefficiencies. 4. IT sector spending on software and support services is substantial.
Value Assessment
Rating: questionable
The $17.3 million contract value for Oracle systems support over its term is substantial. Without comparable contract data or detailed performance metrics, assessing its value against industry benchmarks or alternative solutions is difficult. The pricing structure, based on labor hours, can lead to cost overruns if not managed tightly.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract appears to be awarded sole-source to Oracle Corporation, indicating a lack of competitive bidding. This limits price discovery and potentially leads to higher costs for the government compared to a competitive environment. The justification for sole-source procurement needs thorough review.
Taxpayer Impact: The sole-source nature of this contract may result in taxpayers paying a premium for Oracle systems support due to the absence of competitive pressure on pricing.
Public Impact
Federal agencies rely heavily on Oracle systems, making support contracts critical but also a potential area for overspending. The lack of competition raises concerns about the government's ability to secure the best possible pricing for essential IT services. Transparency in sole-source contract justifications is crucial for public trust and accountability in federal spending.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Potential for cost overruns (labor hours)
- Lack of competitive pricing benchmarks
Positive Signals
- Essential IT system support
- Established vendor relationship
Sector Analysis
This contract falls within the Information Technology sector, specifically for software and IT support services. Federal spending on IT, including software licenses and maintenance, is a significant portion of the overall budget, with Oracle being a major vendor in this space.
Small Business Impact
This contract does not appear to involve small businesses, as it is a sole-source award to a large corporation, Oracle. Federal efforts to ensure small business participation in contracting are bypassed in sole-source situations.
Oversight & Accountability
Oversight of this contract would focus on ensuring that the labor hours billed are reasonable and necessary for the support provided. The General Services Administration (GSA) and the contracting agency should monitor performance and costs closely to prevent waste and ensure accountability.
Related Government Programs
- Computer and Software Stores
- General Services Administration Contracting
- Federal Acquisition Service Programs
Risk Flags
- Lack of competition
- Potential for price gouging
- Difficulty in performance verification
- Limited transparency in pricing
- Risk of vendor lock-in
Tags
computer-and-software-stores, general-services-administration, dc, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
General Services Administration awarded $17.3 million to ORACLE CORPORATION. ORACLE SYSTEMS SUPPORT
Who is the contractor on this award?
The obligated recipient is ORACLE CORPORATION.
Which agency awarded this contract?
Awarding agency: General Services Administration (Federal Acquisition Service).
What is the total obligated amount?
The obligated amount is $17.3 million.
What is the period of performance?
Start: 2003-06-01. End: 2005-01-30.
What was the specific justification for awarding this contract sole-source to Oracle?
Sole-source awards are typically justified when only one vendor can provide the required goods or services due to unique capabilities, proprietary technology, or urgent needs. For Oracle systems, this often relates to proprietary software requiring specialized support only available from the original manufacturer. A thorough review would examine if alternatives were truly unavailable or if the justification was adequately documented.
How does the per-hour labor cost compare to industry standards for similar Oracle support?
Without specific hourly rates or detailed service descriptions, a direct comparison is challenging. However, sole-source contracts often carry a risk of inflated labor rates. Benchmarking against GSA schedules, other agency contracts for similar Oracle products, or private sector IT support rates would be necessary to assess if the government is receiving a fair price for the labor provided.
What mechanisms are in place to ensure the effectiveness and necessity of the labor hours billed?
Effective oversight requires clear performance metrics and deliverables tied to the labor hours. The contracting agency should have processes for validating the work performed, tracking technician time, and ensuring that the support provided directly addresses system needs. Regular performance reviews and audits are crucial to confirm that the billed hours are both necessary and efficiently utilized.
Industry Classification
NAICS: Retail Trade › Electronics and Appliance Stores › Computer and Software Stores
Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT
Contractor Details
Address: 1910 ORACLE WAY, RESTON, VA, 11
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $17,297,521
Exercised Options: $17,297,521
Current Obligation: $17,297,521
Parent Contract
Parent Award PIID: GS35F0108J
IDV Type: FSS
Timeline
Start Date: 2003-06-01
Current End Date: 2005-01-30
Potential End Date: 2005-01-30 00:00:00
Last Modified: 2008-03-07
More Contracts from Oracle Corporation
- Federal Contract — $41.3M (Department of Defense)
- Oracle Maintenance Support — $13.1M (Department of the Interior)
- 200311!005744!2100!BL01 !ACA, Itec4 !daab1599a1002 !A!N! !N!0042 !20030717!20030717!786468199!786468199!786468199!n!dlt Solutions, Inc !360 Herndon Parkway !herndon !va!20170!19840!001!51!craddockville !accomack !virginia !+000007507979!n!n!000000000000!7030!adp Software !A7 !electronics and Communication !1000!NOT Discernable or Classified !423430!E! !7! ! ! ! ! !99990909!c!a!y!n!z!a!u!j!2!002! ! !z!n!z!a !am!y!b!n!n! ! !Z! !a!a!000!a!b!n! ! ! ! ! ! !0001! ! — $13.0M (Department of Defense)
- Oracle Licenses and Support (RAC & Spatial) — $12.9M (Department of Agriculture)
- Consulting Services — $10.0M (Department of Defense)
Other General Services Administration Contracts
- Software Life Cycle Development — $1.4B (Science Applications International Corporation)
- Task Order (TO) 47qfca21f0018 IS Hereby Awarded to Booz Allen Hamilton, Inc. (BAH) to Provide Enterprise Level Data to the Ousd(c), and ITS Strategic Partners (I.E., DOD Fourth Estate, DOD Departments, and IC Community) — $1.4B (Booz Allen Hamilton Inc)
- Federal Contract — $1.2B (Booz Allen Hamilton Inc)
- THE Scope of the to IS to Provide Enterprise IT Services for the Usace — $1.1B (Science Applications International Corporation)
- Task Order Award — $1.1B (Booz Allen Hamilton Inc)