DoD Spends $31.4M on ServiceNow Licenses and Hosting with Carahsoft Technology Corp
Contract Overview
Contract Amount: $31,401,488 ($31.4M)
Contractor: Carahsoft Technology Corp
Awarding Agency: Department of Defense
Start Date: 2021-09-28
End Date: 2026-09-27
Contract Duration: 1,825 days
Daily Burn Rate: $17.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: SERVICENOW LICENSES AND HOSTING
Place of Performance
Location: ALEXANDRIA, ALEXANDRIA CITY County, VIRGINIA, 22311
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $31.4 million to CARAHSOFT TECHNOLOGY CORP for work described as: SERVICENOW LICENSES AND HOSTING Key points: 1. Significant investment in IT infrastructure software. 2. Carahsoft Technology Corp. is the sole awardee. 3. Potential for cost savings through competitive bidding. 4. IT sector spending on software is substantial.
Value Assessment
Rating: fair
The contract value of $31.4M for ServiceNow licenses and hosting appears high. Benchmarking against similar government contracts for enterprise software licenses and managed hosting services is recommended to assess pricing reasonableness.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Awarded via a BPA Call under full and open competition, this method should theoretically allow for competitive pricing. However, the specific awardee and the nature of the BPA call warrant further investigation into price discovery.
Taxpayer Impact: Taxpayer funds are being utilized for essential IT services. Ensuring competitive pricing and value for money is crucial to maximize the impact of this expenditure.
Public Impact
Ensures critical IT services for the Department of Defense Education Activity. Supports software licensing and hosting infrastructure. Potential impact on future IT procurement strategies. Highlights reliance on specific software vendors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of specific price benchmarks.
- Limited visibility into competition effectiveness.
- Potential for vendor lock-in.
- Reliance on a single awardee for a critical service.
Positive Signals
- Awarded under full and open competition.
- Supports essential government functions.
- Firm fixed price contract provides cost certainty.
Sector Analysis
This contract falls within the IT sector, specifically software publishers. Government spending on enterprise software licenses and cloud hosting services has been steadily increasing, reflecting the digital transformation efforts across agencies.
Small Business Impact
The data does not indicate any specific set-asides for small businesses. Further analysis would be needed to determine if small businesses had an opportunity to participate in this procurement.
Oversight & Accountability
The contract was awarded via a BPA Call, which is a mechanism for streamlining procurement. Oversight should focus on ensuring the BPA itself was competitively awarded and that this call represents fair pricing.
Related Government Programs
- Software Publishers
- Department of Defense Contracting
- Department of Defense Education Activity Programs
Risk Flags
- High contract value.
- Sole awardee.
- Potential for price escalation in future renewals.
- Dependence on a single vendor for critical IT services.
Tags
software-publishers, department-of-defense, va, bpa-call, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $31.4 million to CARAHSOFT TECHNOLOGY CORP. SERVICENOW LICENSES AND HOSTING
Who is the contractor on this award?
The obligated recipient is CARAHSOFT TECHNOLOGY CORP.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of Defense Education Activity).
What is the total obligated amount?
The obligated amount is $31.4 million.
What is the period of performance?
Start: 2021-09-28. End: 2026-09-27.
What is the total cost of ownership for ServiceNow licenses and hosting over the contract duration?
The total cost of ownership over the 5-year contract duration (2021-2026) is approximately $31.4 million. This figure includes both the initial licensing costs and the ongoing hosting services. A detailed breakdown of how this amount is allocated between licenses and hosting would provide better insight into the cost structure and potential areas for optimization.
How does the per-unit cost of ServiceNow licenses compare to commercial pricing or other government contracts?
Benchmarking the per-unit cost of ServiceNow licenses against commercial price lists and other government contracts is crucial for assessing value. Without this comparative data, it's difficult to determine if the $31.4 million expenditure represents a fair market price. The firm fixed price nature offers certainty but doesn't inherently guarantee cost-effectiveness without external benchmarks.
What are the key performance indicators (KPIs) for the hosting services, and how are they being monitored?
Effective oversight requires clearly defined KPIs for the ServiceNow hosting services, such as uptime, response times, and security compliance. The government should have a robust system for monitoring these KPIs and holding Carahsoft Technology Corp. accountable for performance. Regular performance reviews and reporting are essential to ensure the service meets the Department of Defense Education Activity's needs.
Industry Classification
NAICS: Information › Software Publishers › Software Publishers
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - NETWORK
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 11493 SUNSET HILLS RD, RESTON, VA, 20190
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $34,066,194
Exercised Options: $31,401,488
Current Obligation: $31,401,488
Actual Outlays: $9,483,885
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N6600119A0120
IDV Type: BPA
Timeline
Start Date: 2021-09-28
Current End Date: 2026-09-27
Potential End Date: 2026-09-27 00:00:00
Last Modified: 2026-01-22
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