DoD's $27M REDSEAL License: Full Competition After Exclusion of Sources Raises Questions
Contract Overview
Contract Amount: $27,031,461 ($27.0M)
Contractor: Norseman Inc
Awarding Agency: Department of Defense
Start Date: 2016-12-19
End Date: 2021-12-30
Contract Duration: 1,837 days
Daily Burn Rate: $14.7K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 5
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: REDSEAL UNLIMITIED TERM LICENSE
Place of Performance
Location: FORT GEORGE G MEADE, ANNE ARUNDEL County, MARYLAND, 20755
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $27.0 million to NORSEMAN INC for work described as: REDSEAL UNLIMITIED TERM LICENSE Key points: 1. Significant contract value of $27 million for a software license. 2. Competition method 'Full and Open Competition After Exclusion of Sources' warrants scrutiny. 3. Potential risk associated with the exclusion of sources impacting price discovery. 4. IT sector spending, specifically 'Other Computer Related Services', is a key area.
Value Assessment
Rating: questionable
The contract value of $27,031,461 for a term license is substantial. Benchmarking against similar unlimited term licenses for enterprise software is difficult without specific product details, but the competition method raises concerns about whether the government achieved the best possible price.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'Full and Open Competition After Exclusion of Sources'. While this indicates an attempt at broad competition, the exclusion of specific sources suggests a potentially narrowed field, which could impact the effectiveness of price discovery and potentially lead to higher costs.
Taxpayer Impact: The exclusion of sources, even with a stated full and open competition, may limit competitive pressure, potentially resulting in higher costs for taxpayers than if all potential sources were considered.
Public Impact
Taxpayers may be paying more due to a potentially limited competitive landscape. The effectiveness of the procurement process for IT software licenses is called into question. Lack of transparency regarding the 'exclusion of sources' could hinder public trust.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Competition method raises concerns about price discovery.
- Exclusion of sources limits potential bidders.
- Lack of specific product details hinders value assessment.
Positive Signals
- Awarded under a full and open competition framework.
- Firm fixed price contract provides cost certainty.
Sector Analysis
This contract falls within the Information Technology sector, specifically 'Other Computer Related Services'. Spending in this area is consistently high across government agencies, with a constant need for software licenses and related services. Benchmarks are highly variable based on the specific software and licensing model.
Small Business Impact
The data does not indicate whether small businesses were involved in this procurement. The nature of large enterprise software licenses often favors larger, established vendors, potentially limiting small business participation.
Oversight & Accountability
The contract was awarded by the Defense Information Systems Agency (DISA) under the Department of Defense. Oversight would typically involve contract management by DISA officials to ensure compliance with terms and conditions, and adherence to procurement regulations.
Related Government Programs
- Other Computer Related Services
- Department of Defense Contracting
- Defense Information Systems Agency Programs
Risk Flags
- Competition method raises concerns about price discovery.
- Exclusion of sources may limit competitive pressure.
- Lack of transparency regarding source exclusion.
- Potential for overpayment due to narrowed competition.
- Difficulty in benchmarking value without product specifics.
Tags
other-computer-related-services, department-of-defense, md, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $27.0 million to NORSEMAN INC. REDSEAL UNLIMITIED TERM LICENSE
Who is the contractor on this award?
The obligated recipient is NORSEMAN INC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Information Systems Agency).
What is the total obligated amount?
The obligated amount is $27.0 million.
What is the period of performance?
Start: 2016-12-19. End: 2021-12-30.
What specific criteria led to the exclusion of certain sources in this 'Full and Open Competition After Exclusion of Sources' award, and how did this impact the final price?
The exclusion of sources typically occurs when specific technical requirements, security mandates, or existing infrastructure compatibility necessitate a limited pool of vendors. Without knowing the exact reasons for exclusion, it's difficult to definitively state the price impact. However, reducing the number of potential bidders generally decreases competitive pressure, which could lead to a higher price than if a truly open competition had been feasible.
How does the $27 million cost for an unlimited term license compare to industry standards for similar enterprise software, considering the competition method used?
Assessing the value of an unlimited term license at $27 million requires detailed knowledge of the specific software product, its capabilities, and the user base it supports. The 'Full and Open Competition After Exclusion of Sources' method introduces a caveat; while competition existed, it wasn't fully open. This suggests the price might be higher than if all potential vendors could have bid, making direct comparison to industry standards challenging without further context on the software's market position and the impact of the source exclusion.
What are the long-term implications for the Department of Defense's IT infrastructure and budget given this significant, potentially non-optimally priced, software license?
A $27 million investment in a software license represents a significant commitment. If the exclusion of sources led to a suboptimal price, the DoD may face increased long-term costs for this capability. This could strain future IT budgets, potentially diverting funds from other critical needs or requiring budget increases. Furthermore, reliance on a limited vendor pool could create future lock-in risks and limit flexibility in adopting newer, potentially more cost-effective technologies.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services
Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 5
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 8172 LARK BROWN RD STE 201, ELKRIDGE, MD, 21075
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $31,793,961
Exercised Options: $27,031,461
Current Obligation: $27,031,461
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Parent Contract
Parent Award PIID: NNG15SC83B
IDV Type: GWAC
Timeline
Start Date: 2016-12-19
Current End Date: 2021-12-30
Potential End Date: 2021-12-30 00:00:00
Last Modified: 2021-02-17
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