DoD's $279M Oracle Software Contract with DLT Solutions Faces Scrutiny Over Value and Competition

Contract Overview

Contract Amount: $279,309,544 ($279.3M)

Contractor: DLT Solutions, LLC

Awarding Agency: Department of Defense

Start Date: 2018-05-31

End Date: 2022-05-31

Contract Duration: 1,461 days

Daily Burn Rate: $191.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: DON ORACLE ESL - NET LICENSE FEES NET TECHNICAL SUPPORT FEES FOR NEW LICENSE NET TECHNICAL SUPPORT FEES FOR CONVERTED AND REPLACED LICENSES NET TECHNICAL SUPPORT FEES FOR RESTATED LICENSES A NET TECHNICAL SUPPORT FEES FOR PREVIOUSLY ACQUIRED LICENSES BACK SUPPORT FEES FOR CONVERTED AND REPLACED LICENSES, PREVIOUSLY ACQUIRED LICENSES, RESTATED LICENSES A

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $279.3 million to DLT SOLUTIONS, LLC for work described as: DON ORACLE ESL - NET LICENSE FEES NET TECHNICAL SUPPORT FEES FOR NEW LICENSE NET TECHNICAL SUPPORT FEES FOR CONVERTED AND REPLACED LICENSES NET TECHNICAL SUPPORT FEES FOR RESTATED LICENSES A NET TECHNICAL SUPPORT FEES FOR PREVIOUSLY ACQUIRED LICENSES BACK SUPPORT FEES FOR CONVERT… Key points: 1. Significant spending on Oracle software licenses and support over four years. 2. Competition method 'Full and Open Competition After Exclusion of Sources' warrants further review for potential limitations. 3. Risk of vendor lock-in and potential overpayment for software maintenance and support. 4. IT sector spending, specifically on software publishers, is a common area for cost optimization.

Value Assessment

Rating: questionable

The contract's total value of $279M for Oracle software and support over four years appears high. Benchmarking against similar government contracts for Oracle products is crucial to determine if the pricing is competitive and reflects fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The competition method 'Full and Open Competition After Exclusion of Sources' is unusual and suggests that while the competition was intended to be open, specific sources may have been excluded, potentially limiting true market competition and price discovery.

Taxpayer Impact: The significant expenditure raises questions about whether taxpayers received the best possible value given the competition method employed.

Public Impact

Taxpayers are funding a substantial contract for enterprise software, impacting the Department of Defense's IT budget. The reliance on a single vendor (Oracle) for software and support can lead to long-term cost increases. The specific nature of the contract (licenses, technical support) highlights the ongoing costs associated with maintaining large software systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Ambiguous competition method
High contract value for software licenses and support
Potential for vendor lock-in

Positive Signals

Contract awarded under a 'Full and Open Competition' framework (albeit with exclusions)
Clear contract duration and defined services

Sector Analysis

This contract falls within the Information Technology sector, specifically Software Publishers. Government spending on enterprise software like Oracle is substantial, and ensuring competitive pricing and effective competition is vital for managing IT budgets.

Small Business Impact

The data does not indicate any specific involvement or benefit to small businesses in this contract. The primary contractor is DLT Solutions, LLC, which may or may not be a small business itself, but the contract structure doesn't suggest set-asides or subcontracting opportunities for smaller entities.

Oversight & Accountability

The contract's duration and value necessitate robust oversight to ensure performance, adherence to terms, and fair pricing. The 'Exclusion of Sources' clause warrants particular attention from oversight bodies to confirm its justification and impact on competition.

Related Government Programs

Software Publishers
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of clear justification for excluded sources
Potential for inflated pricing due to limited competition
High reliance on a single software vendor
Insufficient data to benchmark per-unit costs effectively
Risk of vendor lock-in and future cost escalations

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $279.3 million to DLT SOLUTIONS, LLC. DON ORACLE ESL - NET LICENSE FEES NET TECHNICAL SUPPORT FEES FOR NEW LICENSE NET TECHNICAL SUPPORT FEES FOR CONVERTED AND REPLACED LICENSES NET TECHNICAL SUPPORT FEES FOR RESTATED LICENSES A NET TECHNICAL SUPPORT FEES FOR PREVIOUSLY ACQUIRED LICENSES BACK SUPPORT FEES FOR CONVERTED AND REPLACED LICENSES, PREVIOUSLY ACQUIRED LICENSES, RESTATED LICENSES A

Who is the contractor on this award?

The obligated recipient is DLT SOLUTIONS, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $279.3 million.

What is the period of performance?

Start: 2018-05-31. End: 2022-05-31.

What was the justification for excluding specific sources in the 'Full and Open Competition After Exclusion of Sources' method, and how did this impact the final pricing and vendor selection?

The justification for excluding sources is critical. If exclusions were based on proprietary technology or unique capabilities, it might be defensible. However, if arbitrary, it could stifle competition, leading to higher prices. Understanding the rationale is key to assessing if the government secured the best value and if the competition was truly fair and open.

How does the per-unit cost of Oracle licenses and technical support in this contract compare to industry benchmarks and other government contracts for similar Oracle products?

Benchmarking is essential. Without comparative data on per-unit costs for Oracle licenses and support, it's difficult to ascertain if the $279M expenditure represents a fair price. Variations in support levels, license types, and negotiated discounts can influence costs, but a significant deviation from benchmarks would raise concerns about value for money.

What is the long-term strategy for managing Oracle software and support costs, considering the potential for price increases upon contract renewal or expiration?

A proactive long-term strategy is crucial. Relying heavily on a single vendor like Oracle can lead to escalating costs over time. The DoD should explore options such as negotiating multi-year discounts, investigating alternative software solutions, or developing in-house capabilities to reduce future dependency and mitigate price hikes.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0018918RQ012

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Synnex Corporation

Address: 2411 DULLES CORNER PARK STE 800, HERNDON, VA, 20171

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $279,309,544

Exercised Options: $279,309,544

Current Obligation: $279,309,544

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0018918DQ001

IDV Type: IDC

Timeline