Air Force's $42.1M Cisco SmartNet Support contract awarded to Cisco Systems Inc. for one year

Contract Overview

Contract Amount: $42,120,000 ($42.1M)

Contractor: Cisco Systems Inc

Awarding Agency: Department of Defense

Start Date: 2018-06-18

End Date: 2019-06-17

Contract Duration: 364 days

Daily Burn Rate: $115.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: AIR FORCE 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 $42.1 million to CISCO SYSTEMS INC for work described as: AIR FORCE CISCO SMARTNET SUPPORT Key points: 1. Value for money assessed against market rates for similar support contracts. 2. Competition dynamics indicate a full and open process, potentially driving competitive pricing. 3. Risk indicators include reliance on a single vendor for critical network support. 4. Performance context is a one-year delivery order for essential IT infrastructure. 5. Sector positioning within IT infrastructure and software publishing services.

Value Assessment

Rating: fair

The contract's value of approximately $42.1 million for one year of Cisco SmartNet support appears to be within a reasonable range for enterprise-level network maintenance. Benchmarking against similar large-scale support agreements for complex IT infrastructure suggests that the pricing is competitive, especially considering the critical nature of uninterrupted network services. However, without detailed breakdowns of the services included and specific support tiers, a precise value-for-money assessment is challenging. The firm fixed-price structure provides cost certainty.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but the competitive nature of the process generally leads to better price discovery and potentially more favorable terms for the government. The award to Cisco Systems Inc. indicates they were the most advantageous offer.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it encourages a competitive marketplace, which typically results in lower prices and better service offerings compared to sole-source or limited competition scenarios.

Public Impact

The primary beneficiary is the U.S. Air Force, ensuring the continued operation and support of its Cisco network infrastructure. Services delivered include technical support, software updates, and hardware replacement for Cisco networking equipment. Geographic impact is nationwide, supporting Air Force bases and operations across the United States. Workforce implications include ensuring IT personnel have reliable network access to perform their duties.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential vendor lock-in due to reliance on Cisco-specific support.
Limited flexibility in adopting alternative network solutions without impacting support agreements.
Cost escalation over time if multi-year renewals are not competitively bid.

Positive Signals

Ensures access to original equipment manufacturer (OEM) expertise and support.
Provides timely resolution of network issues, minimizing downtime.
Includes access to the latest software patches and firmware updates for security and performance.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on network infrastructure support and maintenance. The market for enterprise network hardware and software support is dominated by major players like Cisco, with significant government spending allocated to maintaining these critical systems. Comparable spending benchmarks for similar large federal agencies often run into tens or hundreds of millions annually for comprehensive network support contracts.

Small Business Impact

The contract was awarded under full and open competition and does not indicate any specific small business set-aside. While Cisco Systems Inc. is a large business, there is no information provided on subcontracting plans for small businesses. The lack of a set-aside suggests that the primary focus was on obtaining the best value from the most capable provider, rather than specifically targeting small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the technical point of contact within the Defense Information Systems Agency (DISA) or the relevant Air Force unit. Accountability measures are embedded in the firm fixed-price contract terms and performance expectations. Transparency is facilitated through contract databases like FPDS, though detailed performance metrics are often internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Air Force Network Operations
DoD Enterprise IT Services
Cisco Maintenance Contracts
Software Publishers Support
Network Infrastructure Services

Risk Flags

Single Vendor Reliance
Potential for Price Escalation
Critical Infrastructure Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.1 million to CISCO SYSTEMS INC. AIR FORCE 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 $42.1 million.

What is the period of performance?

Start: 2018-06-18. End: 2019-06-17.

What is the historical spending trend for Cisco SmartNet support by the Air Force or Department of Defense?

Analyzing historical spending on Cisco SmartNet support by the Air Force and the broader Department of Defense reveals a consistent and significant investment in maintaining Cisco network infrastructure. Over the past five to ten years, federal agencies, including the DoD, have allocated substantial budgets towards such support contracts, often in the range of tens to hundreds of millions of dollars annually. This spending is driven by the widespread adoption of Cisco equipment across military branches and the critical need for reliable network operations. Fluctuations in annual spending can be attributed to contract renewal cycles, changes in technology requirements, and shifts in procurement strategies, such as increased emphasis on competitive bidding or consolidation of support services. The trend generally indicates a sustained reliance on OEM support for complex network environments, underscoring the importance of these contracts for national security and operational readiness.

How does the per-unit cost of this contract compare to other similar Cisco SmartNet support contracts awarded to different government agencies?

Directly comparing the per-unit cost of this $42.1 million contract for Cisco SmartNet support is challenging without a detailed breakdown of the specific services, devices covered, and support levels (e.g., response times, hardware replacement policies). However, general benchmarking against other large federal contracts for similar enterprise-wide Cisco support suggests that the overall contract value is substantial, reflecting the scale of the Air Force's network. If this contract covers a vast number of devices and locations, the average cost per device or per support hour might be competitive. Conversely, if the scope is narrower, the cost could be higher. Publicly available data often aggregates costs, making granular per-unit comparisons difficult. Factors like the duration of the support (one year in this case), the specific product lines supported, and the level of technical expertise required all influence the final price. A detailed analysis would require access to the specific contract line items and service level agreements.

What are the primary risks associated with relying on a single vendor like Cisco Systems Inc. for critical network support?

Relying on a single vendor, such as Cisco Systems Inc., for critical network support presents several primary risks. Firstly, there's the risk of vendor lock-in, where the government becomes heavily dependent on Cisco's proprietary technologies and support ecosystem, making it difficult and costly to switch to alternative solutions or vendors in the future. Secondly, pricing power can shift towards the vendor, especially if competition diminishes over time or if the government's needs become highly specialized to Cisco products. This could lead to price increases in subsequent contract renewals. Thirdly, there's a potential risk to innovation; the vendor might prioritize their own product roadmap over the specific evolving needs of the government, or the government might miss out on advancements from competing technologies. Lastly, operational risks include potential disruptions if the vendor experiences financial difficulties, supply chain issues, or significant changes in their support structure. Ensuring robust service level agreements (SLAs) and maintaining internal expertise are crucial mitigation strategies.

What is the track record of Cisco Systems Inc. in fulfilling similar large-scale federal IT support contracts?

Cisco Systems Inc. has a long-standing and extensive track record of fulfilling large-scale IT support contracts for the U.S. federal government, including various branches of the Department of Defense, intelligence agencies, and civilian departments. They are a primary provider of networking hardware, software, and associated support services to government entities. Historically, Cisco has been awarded numerous multi-million dollar contracts for network infrastructure maintenance, security services, and technology upgrades. While specific performance metrics for individual contracts are often not publicly detailed, Cisco's continued success in winning significant federal contracts suggests a generally positive performance history and a strong understanding of government procurement requirements and operational needs. However, like any large contractor, there may be instances of performance issues or contract disputes on specific awards, which are typically addressed through contract management and oversight processes.

How does the scope of services in this contract align with the Air Force's overall IT modernization and cybersecurity goals?

This contract for Cisco SmartNet support directly aligns with the Air Force's fundamental IT modernization and cybersecurity goals by ensuring the stability, reliability, and security of its core network infrastructure. Modernization efforts often involve upgrading hardware and software, which necessitates robust support to manage the transition and maintain operational continuity. Cybersecurity is paramount, and SmartNet support typically includes access to critical security patches, firmware updates, and technical expertise to address vulnerabilities promptly. By maintaining the health of the existing network, this contract provides a stable foundation upon which more advanced IT initiatives can be built. It ensures that essential communication and data transfer capabilities remain operational, which is a prerequisite for implementing new technologies and defending against cyber threats. The support likely covers devices that are integral to the Air Force's command and control, intelligence, and logistics systems.

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

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: $42,120,000

Exercised Options: $42,120,000

Current Obligation: $42,120,000

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC102814D0003

IDV Type: IDC

Timeline