DoD awards $15.3M for SAP MAXSECURE SUPPORT SERVICES, a sole-source contract with a long duration

Contract Overview

Contract Amount: $15,273,584 ($15.3M)

Contractor: SAP National Security Services Inc

Awarding Agency: Department of Defense

Start Date: 2021-01-18

End Date: 2026-06-17

Contract Duration: 1,976 days

Daily Burn Rate: $7.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SAP MAXSECURE SUPPORT SERVICES

Place of Performance

Location: WASHINGTON NAVY YARD, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20374

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $15.3 million to SAP NATIONAL SECURITY SERVICES INC for work described as: SAP MAXSECURE SUPPORT SERVICES Key points: 1. Contract value of $15.3M over nearly 5 years suggests a significant investment in specialized support. 2. Sole-source award indicates potential lack of market competition or unique vendor capabilities. 3. Long contract duration (1976 days) may present risks related to technology obsolescence and price escalation. 4. The contract is for 'Other Computer Related Services,' a broad category that requires further definition of services. 5. Awarded by the Defense Information Systems Agency (DISA), highlighting its importance for defense IT infrastructure. 6. The firm-fixed-price contract type shifts cost risk to the contractor, which is generally favorable for the government.

Value Assessment

Rating: fair

The contract value of $15.3M for nearly five years of support for SAP MAXSECURE services appears substantial. Without specific details on the services provided or comparable contracts, it's difficult to benchmark the value definitively. However, sole-source awards often carry a higher risk of inflated pricing compared to competitively bid contracts. The firm-fixed-price structure is a positive indicator for cost control, but the overall value proposition is questionable due to the lack of competition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This suggests that either SAP National Security Services Inc. is the only known provider capable of meeting the specific requirements, or the government determined that competition was not feasible or advantageous. The lack of competition limits the government's ability to explore alternative solutions and potentially secure better pricing through a bidding process.

Taxpayer Impact: Taxpayers may be paying a premium for this service due to the absence of competitive pressure to drive down costs. The government missed an opportunity to leverage market forces for potential savings.

Public Impact

The Department of Defense, specifically through the Defense Information Systems Agency, is the primary beneficiary, receiving critical support for its SAP MAXSECURE systems. This contract ensures the continued operation and maintenance of essential IT services vital for national security operations. The geographic impact is primarily within the District of Columbia, where the contract is registered, but the services likely support DoD operations nationwide and globally. The contract supports specialized IT roles, potentially impacting a niche segment of the federal IT workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Risk of vendor lock-in due to sole-source nature.
Potential for cost overruns if pricing was not adequately benchmarked prior to award.
Technological obsolescence risk given the long contract duration.
Lack of transparency in the procurement process due to sole-source award.

Positive Signals

Firm-fixed-price contract type mitigates cost uncertainty for the government.
Award to a known entity (SAP) may imply a level of trust and established relationship.
Long duration provides stability for critical IT support services.

Sector Analysis

The contract falls within the broader IT services sector, specifically focusing on computer-related services and support for enterprise resource planning (ERP) software like SAP. The market for specialized SAP support, particularly within the defense sector, can be concentrated, often leading to sole-source or limited competition awards. Benchmarking spending in this niche requires comparing against similar specialized support contracts for high-security government systems, which are not readily available in the public domain.

Small Business Impact

This contract was not awarded to a small business, nor does it appear to have a small business set-aside component. There is no explicit information regarding subcontracting plans for small businesses. This suggests that the primary contractor, SAP National Security Services Inc., will likely perform the majority of the work, potentially limiting opportunities for small businesses in this specific procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Information Systems Agency (DISA) contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract, requiring the contractor to deliver specified services. Transparency is limited due to the sole-source nature of the award, with details of the justification for this approach not publicly detailed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Information Systems Agency (DISA) IT Support Contracts
Federal Enterprise Resource Planning (ERP) Software Support
Sole-Source IT Service Contracts
SAP Software Maintenance and Support
National Security IT Infrastructure

Risk Flags

Sole-source award
Long contract duration
Lack of public justification for sole-source
Potential for uncompetitive pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.3 million to SAP NATIONAL SECURITY SERVICES INC. SAP MAXSECURE SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is SAP NATIONAL SECURITY SERVICES 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 $15.3 million.

What is the period of performance?

Start: 2021-01-18. End: 2026-06-17.

What specific SAP MAXSECURE support services are being provided under this contract?

The provided data indicates the contract is for 'SAP MAXSECURE SUPPORT SERVICES' under NAICS code 541519 (Other Computer Related Services). However, the specific nature of these services is not detailed. Typically, such support could encompass software maintenance, technical assistance, system upgrades, security patching, performance tuning, and potentially specialized consulting related to SAP's MAXSECURE solutions, which are likely geared towards high-security environments. Without further documentation, the exact scope remains undefined, making it difficult to assess the necessity and value of the services.

What is the justification for awarding this contract on a sole-source basis?

The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the absence of adequate competition. For SAP MAXSECURE SUPPORT SERVICES, it's plausible that SAP National Security Services Inc. holds exclusive rights or possesses highly specialized expertise and certifications required by the Department of Defense for its MAXSECURE suite. The government would need to document that only this contractor can provide the required services, or that the cost of competition would outweigh the benefits. This justification is crucial for ensuring the award is appropriate and serves the government's best interests.

How does the $15.3 million contract value compare to similar support contracts for SAP systems within the DoD?

Direct comparison of this $15.3 million contract value is challenging without access to detailed spending data for similar SAP support contracts within the DoD, especially those for specialized MAXSECURE solutions. However, given the nearly five-year duration and the sole-source nature, the value appears substantial. Competitively procured, long-term support contracts for enterprise software can vary widely based on the modules supported, user base size, and service level agreements. The absence of competition here raises a flag for potential overpricing relative to what might be achieved in a competitive market.

What are the potential risks associated with the long contract duration (1976 days)?

The extended duration of 1976 days (approximately 5.4 years) presents several risks. Firstly, technological obsolescence is a significant concern; SAP and related security technologies evolve rapidly, and a long-term commitment might lock the DoD into outdated solutions. Secondly, pricing escalation could occur over such a long period, even with a fixed-price contract, if initial estimates did not fully account for future market shifts or if contract modifications are frequent. Lastly, it reduces the government's flexibility to adapt to changing mission requirements or to adopt newer, potentially more cost-effective technologies that emerge during the contract period.

What is the track record of SAP National Security Services Inc. in supporting similar government contracts?

SAP National Security Services Inc. is a subsidiary of SAP, a major global software provider. Its track record in supporting government contracts, particularly within the national security space, is likely extensive, given SAP's prevalence in large organizations. However, specific performance metrics, past issues, or successes related to this particular 'MAXSECURE SUPPORT SERVICES' contract or similar sole-source awards are not publicly detailed in the provided data. A deeper dive into contract performance databases and agency evaluations would be necessary to fully assess their track record.

What oversight mechanisms are in place to ensure performance and value for money on this sole-source contract?

Oversight for this contract would primarily be managed by the contracting officer and the program management team within the Defense Information Systems Agency (DISA). Key oversight mechanisms include monitoring contractor performance against contract deliverables and service level agreements, conducting regular progress reviews, and potentially utilizing contract surveillance personnel. Given the sole-source nature, emphasis would be placed on ensuring the contractor meets all specified requirements and that the pricing remains fair and reasonable throughout the contract's life, possibly through periodic price analyses if allowed by the contract terms.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HC102821R0013

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: SAP SE

Address: 3809 WEST CHESTER PIKE STE 210, NEWTOWN SQUARE, PA, 19073

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

Financial Breakdown

Contract Ceiling: $22,761,334

Exercised Options: $18,765,834

Current Obligation: $15,273,584

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline