Navy Awards $20.6M SAP ERP Contract for IT Services
Contract Overview
Contract Amount: $20,609,580 ($20.6M)
Contractor: SAP National Security Services Inc
Awarding Agency: Department of Defense
Start Date: 2025-12-30
End Date: 2026-12-30
Contract Duration: 365 days
Daily Burn Rate: $56.5K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: NAVY ERP+ SAP S/4HANA
Place of Performance
Location: NEWTOWN SQUARE, DELAWARE County, PENNSYLVANIA, 19073
Plain-Language Summary
Department of Defense obligated $20.6 million to SAP NATIONAL SECURITY SERVICES INC for work described as: NAVY ERP+ SAP S/4HANA Key points: 1. Contract awarded to SAP National Security Services Inc. for IT services. 2. Focus on Enterprise Resource Planning (ERP) with SAP S/4HANA. 3. Competition method is Full and Open, suggesting market availability. 4. Sector is IT services, specifically computer-related services.
Value Assessment
Rating: fair
The contract value of $20.6M over one year appears reasonable for a large-scale ERP implementation. Benchmarking against similar SAP S/4HANA deployments in government would provide a clearer picture of value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This method generally promotes competitive pricing and ensures the government receives fair market value.
Taxpayer Impact: The $20.6M expenditure represents taxpayer investment in modernizing the Navy's financial and operational systems, aiming for long-term efficiency gains.
Public Impact
Modernization of critical Navy financial and operational systems. Potential for improved data management and decision-making. Impact on Navy personnel training and system adoption. Ensures compliance with federal financial reporting standards.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns in complex ERP implementations.
- Risk of user adoption challenges and training needs.
- Dependency on a single vendor for critical system support.
Positive Signals
- Leverages established SAP S/4HANA technology.
- Full and open competition promotes best value.
- Clear delivery order with defined end dates.
Sector Analysis
This contract falls within the IT services sector, specifically Other Computer Related Services (NAICS 541519). Government spending in this area is substantial, driven by the need for modern infrastructure and software solutions like ERP systems.
Small Business Impact
The contract was awarded to SAP National Security Services Inc. and does not indicate any specific set-asides for small businesses. Further analysis would be needed to determine if small businesses are involved as subcontractors.
Oversight & Accountability
The Department of the Navy is the awarding agency, with oversight expected through contract management and performance monitoring. The firm fixed price contract type provides some cost control, but detailed performance metrics will be crucial.
Related Government Programs
- Other Computer Related Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Potential for scope creep impacting budget and timeline.
- Integration complexity with legacy Navy systems.
- Vendor lock-in concerns for future support and upgrades.
- Cybersecurity risks associated with sensitive defense data.
Tags
other-computer-related-services, department-of-defense, pa, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $20.6 million to SAP NATIONAL SECURITY SERVICES INC. NAVY ERP+ SAP S/4HANA
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 (Department of the Navy).
What is the total obligated amount?
The obligated amount is $20.6 million.
What is the period of performance?
Start: 2025-12-30. End: 2026-12-30.
What is the projected return on investment for this ERP system upgrade?
The projected ROI for this ERP system upgrade is not explicitly detailed in the provided data. However, the Navy likely anticipates significant long-term benefits through improved operational efficiency, better data accuracy, streamlined financial processes, and enhanced decision-making capabilities. Quantifying these benefits will require post-implementation analysis and tracking of key performance indicators.
What are the primary risks associated with implementing SAP S/4HANA in a large federal agency like the Navy?
Key risks include significant implementation costs and potential overruns, lengthy deployment timelines, challenges in data migration and integration with existing systems, and user resistance or adoption difficulties. Ensuring adequate training and change management is crucial to mitigate these risks and achieve successful system integration and utilization.
How will the success of this contract be measured to ensure taxpayer value?
Success will be measured through adherence to the firm fixed price, delivery by the specified end date, and the successful implementation of SAP S/4HANA functionalities. Key Performance Indicators (KPIs) related to system uptime, user satisfaction, data integrity, and the achievement of intended operational efficiencies will be critical metrics for evaluating taxpayer value.
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
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
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: $291,543,928
Exercised Options: $20,609,580
Current Obligation: $20,609,580
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W519TC25DA011
IDV Type: IDC
Timeline
Start Date: 2025-12-30
Current End Date: 2026-12-30
Potential End Date: 2031-12-30 00:00:00
Last Modified: 2025-12-30
More Contracts from SAP National Security Services Inc
- ,Ct::igf SAP Consulting Services — $30.7M (Department of Defense)
- Sybase Maintenance — $23.3M (Department of Defense)
- SAP Maxsecure Support Services — $15.3M (Department of Defense)
- Defense Commissary Agency (deca) Electronic Business System Delivery Order Under SAP National Security Services (SAP NS2) Indefinite Delivery/Indefinite Quantity Contract for SAP Commercial-Off-The-Shelf License-Maintenance Support Subscriptions — $12.5M (Department of Defense)
- THE Procurement of SAP NS2S S/4hana Cloud Private Edition (ED) (marketed AS Realize, Innovate, Sustain, and Enhance (rise)) and Multi-Tenant Cloud Hosting, Software Licenses, Services and Maintenance — $11.7M (Department of Defense)
View all SAP National Security Services Inc federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)