DoD awards $26.2M for Computer Systems Design Services to Microsoft, a sole-source contract

Contract Overview

Contract Amount: $26,189,382 ($26.2M)

Contractor: Microsoft Corporation

Awarding Agency: Department of Defense

Start Date: 2017-09-28

End Date: 2022-09-29

Contract Duration: 1,827 days

Daily Burn Rate: $14.3K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CT::IGF

Place of Performance

Location: SUMTER, SUMTER County, SOUTH CAROLINA, 29150

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $26.2 million to MICROSOFT CORPORATION for work described as: IGF::CT::IGF Key points: 1. Significant award value of $26.2 million. 2. Sole-source award to a major technology provider. 3. Contract duration spans five years. 4. Focus on computer systems design services.

Value Assessment

Rating: questionable

Benchmarking for sole-source IT services is challenging. Without competition, it's difficult to ascertain if the $26.2 million represents a fair market price. Further analysis of the specific services and Microsoft's standard pricing would be needed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating a lack of competition. This method limits price discovery and may result in higher costs for taxpayers compared to a competitively bid contract.

Taxpayer Impact: The sole-source nature of this award raises concerns about potential overpayment and reduced value for taxpayer funds.

Public Impact

Taxpayers may be paying a premium due to the absence of competitive bidding. Reliance on a single vendor for critical IT services could pose long-term risks. The long contract duration ties the government to one provider for an extended period.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Long contract duration

Positive Signals

Award to a well-established vendor

Sector Analysis

The IT services sector is highly dynamic. While $26.2 million over five years is a substantial amount, it may be within benchmarks for large-scale enterprise support from major vendors like Microsoft, especially if specialized services are involved.

Small Business Impact

This contract was awarded directly to Microsoft Corporation and does not appear to include provisions for small business participation. The sole-source nature likely precluded opportunities for small businesses to compete.

Oversight & Accountability

The sole-source justification and the procurement process should be thoroughly reviewed by oversight bodies to ensure compliance and fiscal responsibility. Transparency regarding the necessity of a sole-source award is crucial.

Related Government Programs

Computer Systems Design Services
Department of Defense Contracting
Defense Information Systems Agency Programs

Risk Flags

Sole-source award
Lack of competition
Potential for inflated pricing
Long-term vendor dependency
Limited small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.2 million to MICROSOFT CORPORATION. IGF::CT::IGF

Who is the contractor on this award?

The obligated recipient is MICROSOFT CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $26.2 million.

What is the period of performance?

Start: 2017-09-28. End: 2022-09-29.

What was the specific justification for awarding this contract on a sole-source basis to Microsoft?

The justification for a sole-source award typically involves circumstances where only one responsible source can provide the required supplies or services. This could be due to unique capabilities, proprietary technology, or urgent needs where competition is not feasible. A detailed review of the contract file and agency's justification documentation is necessary to understand the specific rationale.

What are the potential risks associated with a five-year sole-source contract for IT services with Microsoft?

Risks include vendor lock-in, potentially higher costs due to lack of competition, and reduced flexibility to adopt newer technologies or alternative solutions. If Microsoft's technology or support strategy shifts, the agency might be compelled to follow or incur significant transition costs. Ensuring robust service level agreements and exit strategies is vital.

How does the $26.2 million award compare to similar IT service contracts awarded competitively?

Direct comparison is difficult without knowing the exact scope of services. However, sole-source awards are generally expected to be higher than competitively sourced ones. A benchmark analysis against similar, competitively awarded contracts for enterprise-level IT support or custom software development from other major vendors would be needed to assess value.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HC102816R0024

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: ONE MICROSOFT WAY, REDMOND, WA, 98052

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

Financial Breakdown

Contract Ceiling: $26,189,382

Exercised Options: $26,189,382

Current Obligation: $26,189,382

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC102817D0001

IDV Type: IDC

Timeline