Interior's $13M Oracle Maintenance Contract Awarded to Oracle Corporation

Contract Overview

Contract Amount: $13,088,407 ($13.1M)

Contractor: Oracle Corporation

Awarding Agency: Department of the Interior

Start Date: 2006-05-24

End Date: 2011-05-23

Contract Duration: 1,825 days

Daily Burn Rate: $7.2K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ORACLE MAINTENANCE SUPPORT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20240

State: District of Columbia Government Spending

Plain-Language Summary

Department of the Interior obligated $13.1 million to ORACLE CORPORATION for work described as: ORACLE MAINTENANCE SUPPORT Key points: 1. The contract represents a significant expenditure for Oracle maintenance and support. 2. Competition was limited, with the award going to the incumbent provider. 3. Potential risks include vendor lock-in and the lack of competitive pricing pressure. 4. The IT sector is characterized by high demand for specialized software support.

Value Assessment

Rating: fair

The contract value of $13.1 million over five years suggests a substantial annual cost for Oracle maintenance. Benchmarking against similar government contracts for enterprise software support is difficult without more specific service details, but this appears to be a significant investment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source delivery order, indicating a lack of competition. This method limits price discovery and may result in higher costs for the government compared to a competitive procurement.

Taxpayer Impact: Taxpayers may bear a higher cost due to the absence of competitive bidding, potentially funding premium pricing for Oracle's proprietary software maintenance.

Public Impact

Government reliance on a single vendor for critical software maintenance can hinder flexibility. The long duration of the contract may not align with evolving technological needs. Ensuring adequate service levels and performance from the sole-source provider is crucial.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for overpricing
Long contract duration

Positive Signals

Established vendor relationship
Potentially seamless service continuity

Sector Analysis

This contract falls within the Information Technology sector, specifically for software maintenance and support. Government spending on enterprise software like Oracle is substantial, often involving long-term commitments and specialized vendor relationships.

Small Business Impact

This contract does not appear to have specific provisions for small business participation. The sole-source nature of the award to a large corporation like Oracle Corporation limits opportunities for small businesses in this procurement.

Oversight & Accountability

Oversight of this sole-source contract is critical to ensure the Department of the Interior receives value for money and that Oracle Corporation meets all contractual obligations and service level agreements.

Related Government Programs

Department of the Interior Contracting
Departmental Offices Programs

Risk Flags

Sole-source award limits competition and price negotiation.
Potential for vendor lock-in with proprietary software.
Risk of paying premium prices without competitive pressure.
Long contract duration may not adapt to changing needs.
Dependence on a single vendor for critical IT infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $13.1 million to ORACLE CORPORATION. ORACLE MAINTENANCE SUPPORT

Who is the contractor on this award?

The obligated recipient is ORACLE CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of the Interior (Departmental Offices).

What is the total obligated amount?

The obligated amount is $13.1 million.

What is the period of performance?

Start: 2006-05-24. End: 2011-05-23.

What was the justification for awarding this contract as sole-source, and were alternative solutions or competitive options thoroughly explored?

The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or essential continuity of service where only one vendor can meet the requirement. For Oracle maintenance, this often relates to the vendor's exclusive rights to its software and necessary support. However, a thorough exploration of alternatives, such as open-source solutions, third-party maintenance providers (where applicable and permissible by Oracle's licensing), or re-platforming, should have been considered to ensure the most cost-effective and competitive approach.

How does the per-unit cost of this Oracle maintenance contract compare to industry benchmarks or previous government contracts for similar services?

Without specific details on the units of service (e.g., number of users, modules supported, severity levels), a precise per-unit cost comparison is challenging. However, the total contract value of $13.1 million over five years suggests an average annual cost of approximately $2.6 million. This figure should be benchmarked against publicly available data for similar Oracle support contracts, considering factors like the specific Oracle products covered and the level of support required. A lack of competitive bidding makes it harder to ascertain if this represents a fair market price.

What mechanisms are in place to ensure the effectiveness and value of the maintenance services provided by Oracle Corporation under this contract?

Effectiveness and value are typically ensured through robust contract management, including clearly defined Service Level Agreements (SLAs) with measurable performance metrics, regular performance reviews, and established processes for issue resolution and escalation. The Department of the Interior should actively monitor Oracle's adherence to these SLAs, track response and resolution times, and conduct periodic assessments of the support quality to ensure the maintenance services are meeting the agency's operational needs and providing adequate return on investment.

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1910 ORACLE WAY, RESTON, VA, 11

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $13,088,407

Exercised Options: $13,088,407

Current Obligation: $13,088,407

Parent Contract

Parent Award PIID: DAAB1599A1002

IDV Type: IDC

Timeline