DoD's $44M Cisco support contract shows strong competition and fair pricing for essential IT infrastructure

Contract Overview

Contract Amount: $44,000,000 ($44.0M)

Contractor: Cisco Systems Inc

Awarding Agency: Department of Defense

Start Date: 2017-06-16

End Date: 2018-06-17

Contract Duration: 366 days

Daily Burn Rate: $120.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 9

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF CISCO SMARTNET SUPPORT

Place of Performance

Location: SAN JOSE, SANTA CLARA County, CALIFORNIA, 95134

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $44.0 million to CISCO SYSTEMS INC for work described as: IGF::OT::IGF CISCO SMARTNET SUPPORT Key points: 1. Demonstrates effective competition for critical IT support services. 2. Pricing appears competitive based on market benchmarks. 3. Contract duration aligns with typical support cycles. 4. High number of bidders suggests a healthy market for this service. 5. Focus on a single vendor for specialized support is common. 6. Geographic concentration in California noted.

Value Assessment

Rating: good

The contract's total value of $44 million over one year for Cisco SmartNet support is substantial. Benchmarking against similar IT support contracts for enterprise-level hardware indicates that the pricing is within a reasonable range. The firm-fixed-price structure provides cost certainty for the Department of Defense. While specific per-unit costs are not detailed, the overall value proposition appears sound given the critical nature of network infrastructure support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with nine bidders vying for the opportunity. The significant number of bidders suggests a robust and competitive market for Cisco SmartNet support services. This level of competition is beneficial for price discovery and likely contributed to achieving a fair market price for the services rendered. The Defense Information Systems Agency effectively leveraged the competitive landscape.

Taxpayer Impact: The extensive competition ensures that taxpayer dollars are used efficiently, preventing overpayment for essential IT support and promoting a fair market price.

Public Impact

Provides essential support for the Department of Defense's network infrastructure, ensuring operational continuity. Benefits military personnel and civilian employees who rely on stable IT systems. Services are delivered primarily within California, supporting a key geographic region. Maintains the functionality of critical communication and data systems for national security.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if not managed carefully post-contract.
Reliance on a single vendor for specialized support can create risks if the vendor's performance falters.

Positive Signals

Strong competition indicates market availability and potential for future competitive renewals.
Firm-fixed-price contract provides budget predictability.
Awarded to a well-established vendor with a known product line.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on software and network support services. The market for IT support, particularly for major hardware vendors like Cisco, is large and highly competitive. This contract represents a typical expenditure for government agencies needing to maintain complex and critical network infrastructure. Comparable spending benchmarks for enterprise-level IT support contracts often range in the tens of millions annually, depending on the scope and duration.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. Given the nature of specialized IT support for major vendors like Cisco, prime contracts are often awarded to larger entities. Further analysis would be needed to determine if small businesses are involved in the supply chain or subcontracting efforts.

Oversight & Accountability

The contract was awarded under a firm-fixed-price structure, which helps in cost control. Oversight would typically be managed by the Defense Information Systems Agency's contracting officers and program managers. Transparency is generally maintained through contract award databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

DoD Enterprise Software Agreements
Defense Information Technology Support Services
Network Infrastructure Maintenance Contracts
Cisco Systems Support Contracts

Risk Flags

Potential vendor lock-in
Reliance on single vendor for critical infrastructure

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.0 million to CISCO SYSTEMS INC. IGF::OT::IGF CISCO SMARTNET SUPPORT

Who is the contractor on this award?

The obligated recipient is CISCO SYSTEMS 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 $44.0 million.

What is the period of performance?

Start: 2017-06-16. End: 2018-06-17.

What is the historical spending trend for Cisco SmartNet support within the Department of Defense?

Analyzing historical spending on Cisco SmartNet support within the DoD requires access to detailed procurement data over multiple fiscal years. While this specific contract represents a $44 million outlay for the period of June 2017 to June 2018, broader trends would reveal if spending has increased, decreased, or remained stable. Factors influencing these trends include technology refresh cycles, changes in network architecture, and shifts in procurement strategies. Without a multi-year dataset, it's difficult to establish a definitive trend, but the presence of a full and open competition with multiple bidders suggests ongoing demand and a competitive market for these services over time.

How does the per-unit cost of this contract compare to similar support contracts for other network hardware vendors?

A direct per-unit cost comparison is challenging without granular data on the specific devices and services covered under this $44 million Cisco SmartNet contract. However, the overall contract value and the competitive landscape provide context. The fact that nine bidders participated in a full and open competition suggests that the pricing achieved is likely market-driven and competitive relative to other enterprise-level IT support contracts. Government agencies often benchmark IT support costs against industry standards and other agency contracts. While specific per-unit metrics are not available here, the competitive award process implies that the pricing is considered fair market value for the support provided.

What are the key performance indicators (KPIs) used to measure the success of this Cisco SmartNet support contract?

Key Performance Indicators (KPIs) for IT support contracts like Cisco SmartNet typically focus on service availability, response times, resolution times, and customer satisfaction. For a contract of this nature, specific KPIs might include guaranteed uptime for network devices, maximum allowable time for initial response to critical incidents, and average time to resolve hardware or software issues. The Defense Information Systems Agency (DISA) would likely have established service level agreements (SLAs) within the contract outlining these metrics. Performance against these SLAs would be monitored regularly, potentially through reporting mechanisms and user feedback, to ensure the contractor is meeting its obligations.

What is Cisco Systems Inc.'s track record in providing support services to the Department of Defense?

Cisco Systems Inc. is a major global provider of networking hardware, software, and telecommunications equipment, and has a long-standing relationship with the Department of Defense (DoD). The DoD is a significant customer for Cisco, utilizing its technologies across various branches and agencies for critical infrastructure. Cisco's track record with the DoD generally involves providing robust support and maintenance services for its extensive product lines, which are essential for military communications and operations. While specific performance details for every contract vary, Cisco's continued presence as a vendor in large government procurements, often awarded through competitive processes, suggests a generally positive and reliable track record in meeting the demanding requirements of defense agencies.

Are there any identified risks associated with relying on a single vendor, Cisco, for this critical IT support?

Relying on a single vendor like Cisco for critical IT support, even through a competitive contract, inherently carries risks. These include potential vendor lock-in, where the agency becomes dependent on Cisco's proprietary technologies and pricing structures, making future transitions difficult or costly. There's also the risk of price increases upon contract renewal if competition is less robust or if Cisco's market position strengthens. Furthermore, performance issues or disruptions from Cisco could directly impact DoD operations. To mitigate these risks, agencies often employ strategies such as maintaining strong contract management, exploring multi-vendor support options where feasible, and conducting thorough market research before each procurement cycle.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HC102814R0029

Offers Received: 9

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 170 WEST TASMAN DRIVE, SAN JOSE, CA, 95134

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

Financial Breakdown

Contract Ceiling: $44,000,000

Exercised Options: $44,000,000

Current Obligation: $44,000,000

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC102814D0003

IDV Type: IDC

Timeline