DoD awards $25M VMWare license agreement to SDVO Solutions, LLC for IT services

Contract Overview

Contract Amount: $25,002,742 ($25.0M)

Contractor: Sdvo Solutions, LLC

Awarding Agency: Department of Defense

Start Date: 2023-04-26

End Date: 2025-04-26

Contract Duration: 731 days

Daily Burn Rate: $34.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: VMWARE ENTERPRISE LICENSE AGREEMENT

Place of Performance

Location: FREDERICK, FREDERICK County, MARYLAND, 21701

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $25.0 million to SDVO SOLUTIONS, LLC for work described as: VMWARE ENTERPRISE LICENSE AGREEMENT Key points: 1. The contract value of $25 million over two years suggests a significant investment in enterprise software licensing. 2. Competition was open, indicating potential for fair pricing, though the number of bids received is a key factor. 3. The fixed-price contract type shifts performance risk to the contractor, which is generally favorable for the government. 4. The contract supports IT infrastructure for the Defense Health Agency, a critical component of military healthcare. 5. The use of a large, established software vendor like VMWare implies a need for robust and widely supported solutions. 6. The contract duration of two years allows for sustained support and updates for essential software.

Value Assessment

Rating: good

The $25 million contract for VMWare enterprise licenses over two years appears reasonable given the scope of supporting a major federal agency like the Defense Health Agency. Benchmarking VMWare enterprise license agreements is complex due to custom pricing and volume discounts. However, the fixed-price nature of this award suggests the government has a clear understanding of the costs involved. The number of bids (7) indicates a degree of market interest, which can help ensure competitive pricing compared to sole-source or limited competition scenarios.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that the solicitation was broadly advertised, and all responsible sources were permitted to submit offers. Receiving 7 bids suggests a healthy level of competition for this VMWare enterprise license agreement. A higher number of bidders generally leads to better price discovery and potentially lower costs for the government.

Taxpayer Impact: The open competition for this significant software license agreement is beneficial for taxpayers, as it increases the likelihood of securing favorable pricing and terms through market forces.

Public Impact

The primary beneficiaries are the personnel and operations of the Defense Health Agency, who will utilize the VMWare software. The contract delivers essential IT infrastructure support, enabling the agency to manage its digital resources effectively. The geographic impact is likely nationwide, supporting DHA operations across various military installations. Workforce implications include ensuring IT staff have the necessary tools and licenses to maintain and operate the VMWare environment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with VMWare, requiring ongoing significant investments for renewals and upgrades.
Reliance on a single software vendor can create dependencies that may limit future flexibility in IT infrastructure choices.
The complexity of enterprise software licensing can lead to challenges in ensuring optimal utilization and avoiding over-licensing.

Positive Signals

The use of a widely adopted and supported platform like VMWare ensures access to a large pool of skilled IT professionals.
The fixed-price contract structure provides cost certainty for the government over the contract period.
Open competition suggests that the selected vendor, SDVO Solutions, LLC, offered competitive terms and pricing.

Sector Analysis

The market for enterprise software licensing, particularly for virtualization solutions like VMWare, is substantial and highly competitive. VMWare is a dominant player in this space, offering a suite of products for server consolidation, cloud infrastructure, and end-user computing. Federal agencies represent a significant customer base, often requiring large-scale deployments and long-term support contracts. Spending in this sector is driven by the need for efficient IT operations, scalability, and robust security.

Small Business Impact

While the contract was awarded to SDVO SOLUTIONS, LLC, and the data indicates the prime contractor is not a small business (indicated by 'sb': false), the analysis of small business participation would depend on subcontracting plans. If SDVO Solutions, LLC is required to subcontract a portion of this work to small businesses, it could provide opportunities within the small business ecosystem. However, without specific subcontracting data, the direct impact on small businesses is unclear.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Health Agency's contracting and program management offices. Accountability measures are embedded in the firm-fixed-price contract terms, requiring the contractor to deliver specified software licenses and support. Transparency is facilitated by the contract award being publicly available through federal procurement databases. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Health Agency IT Modernization Programs
Federal Civilian IT Infrastructure Contracts
Enterprise Software Licensing Agreements
Virtualization Technology Procurement

Risk Flags

Potential for vendor lock-in
Complexity of enterprise software licensing
Reliance on a single software provider

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.0 million to SDVO SOLUTIONS, LLC. VMWARE ENTERPRISE LICENSE AGREEMENT

Who is the contractor on this award?

The obligated recipient is SDVO SOLUTIONS, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Health Agency).

What is the total obligated amount?

The obligated amount is $25.0 million.

What is the period of performance?

Start: 2023-04-26. End: 2025-04-26.

What is the track record of SDVO SOLUTIONS, LLC in delivering VMWare solutions to federal agencies?

Information regarding SDVO SOLUTIONS, LLC's specific track record with VMWare solutions for federal agencies is not detailed in the provided data. A comprehensive assessment would require reviewing past performance evaluations, contract history, and client references for this specific vendor. Federal procurement databases often contain past performance information that can shed light on their experience with similar software and contract types. Without this additional data, it is difficult to definitively assess their expertise and reliability in delivering VMWare enterprise licenses.

How does the per-unit cost of these VMWare licenses compare to market rates or similar government contracts?

The provided data does not include per-unit cost details for the VMWare licenses, making a direct comparison to market rates or similar government contracts impossible. Enterprise license agreements are often complex, involving negotiated discounts based on volume, duration, and specific product bundles. To benchmark effectively, one would need to know the exact VMWare products, the number of licenses, and the negotiated price per license or per user. Comparing this contract's total value to the number of users or endpoints supported would offer a high-level comparison, but granular per-unit cost analysis requires more detailed pricing information.

What are the primary risks associated with this VMWare enterprise license agreement for the Department of Defense?

Key risks include potential vendor lock-in, where the DHA becomes heavily reliant on VMWare, making future transitions to alternative solutions costly and complex. There's also a risk of underutilization or over-licensing if the deployed VMWare environment doesn't precisely match the licensed capacity, leading to wasted expenditure. Furthermore, the security of the VMWare platform itself is a critical consideration, as any vulnerabilities could impact the sensitive data managed by the Defense Health Agency. Ensuring adequate technical support and timely updates from VMWare, facilitated through SDVO Solutions, LLC, is also crucial.

How effective is the 'Full and Open Competition After Exclusion of Sources' in ensuring value for money in this specific IT contract?

The 'Full and Open Competition After Exclusion of Sources' is generally an effective mechanism for ensuring value for money, as it allows all responsible vendors to compete. Receiving 7 bids suggests a competitive environment, which typically drives down prices and encourages vendors to offer their best terms. However, the ultimate value for money depends on the specific requirements of the contract, the clarity of the solicitation, and the evaluation criteria used. If the competition was robust and the evaluation fair, this approach increases the likelihood that the DHA secured a competitive price for the VMWare licenses. The fixed-price nature further enhances value by capping the government's financial exposure.

What is the historical spending trend for VMWare products or similar IT infrastructure services within the Defense Health Agency?

Historical spending data for VMWare products or similar IT infrastructure services within the Defense Health Agency is not provided. To assess trends, one would need to examine previous contract awards for VMWare licenses, support, and related IT services over several fiscal years. Analyzing this historical data would reveal patterns in spending levels, contract durations, and vendor choices. This context is crucial for understanding whether the current $25 million award represents an increase, decrease, or stable level of investment in VMWare technology for the DHA.

What are the implications of the contract duration (731 days) on the long-term IT strategy of the Defense Health Agency?

A contract duration of 731 days (approximately two years) for VMWare enterprise licenses provides a stable period for the Defense Health Agency to utilize and integrate the software. This duration allows for consistent support and access to updates, which is important for maintaining operational efficiency and security. However, it also means that the DHA will need to plan for contract renewal or potential re-competition well in advance of the expiration date. A two-year term might be considered moderate, offering flexibility without committing to excessively long-term dependencies, but it necessitates ongoing strategic planning for future IT infrastructure needs.

Industry Classification

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

Product/Service Code: IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HT001523R0013

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 110 W CHURCH ST, FREDERICK, MD, 21701

Business Categories: Category Business, DoT Certified Disadvantaged Business Enterprise, Limited Liability Corporation, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Sole Proprietorship, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $25,002,742

Exercised Options: $25,002,742

Current Obligation: $25,002,742

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: NNG15SD32B

IDV Type: GWAC

Timeline