DoD's $26M SAP Software Maintenance Contract Awarded to Advantaged Solutions, LLC

Contract Overview

Contract Amount: $26,054,467 ($26.1M)

Contractor: Advantaged Solutions, LLC

Awarding Agency: Department of Defense

Start Date: 2016-08-31

End Date: 2019-08-31

Contract Duration: 1,095 days

Daily Burn Rate: $23.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SAP ENTERPRISE SOFTWARE MAINTENANCE

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20019

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $26.1 million to ADVANTAGED SOLUTIONS, LLC for work described as: SAP ENTERPRISE SOFTWARE MAINTENANCE Key points: 1. Contract value of $26 million over three years for SAP enterprise software maintenance. 2. Awarded to Advantaged Solutions, LLC, a company with a significant federal contract history. 3. The contract was awarded under full and open competition, suggesting a competitive bidding process. 4. The firm-fixed-price contract type aims to control costs by setting a predetermined price. 5. This spending falls within the broader category of IT software and maintenance services for the federal government. 6. The Defense Logistics Agency is the issuing agency, indicating a need within the Department of Defense. 7. The contract duration of 1095 days aligns with typical software maintenance agreements.

Value Assessment

Rating: good

The contract value of approximately $26 million over three years for SAP enterprise software maintenance appears reasonable given the scope of enterprise software support. Benchmarking against similar large-scale software maintenance contracts for federal agencies would provide a more precise value-for-money assessment. The firm-fixed-price structure helps mitigate cost overruns for the government, assuming the scope of work was well-defined. Without specific details on the SAP modules covered and the level of support required, a definitive value assessment is challenging, but the price point is within expected ranges for such services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. This suggests a robust bidding process where multiple vendors likely participated. The level of competition is generally positive for price discovery and can lead to more favorable pricing for the government. The fact that it was competed openly implies that Advantaged Solutions, LLC was selected based on the merits of their proposal, likely including price, technical capability, and past performance.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation. It ensures that the government is not locked into a single vendor, potentially leading to better deals and service quality.

Public Impact

The Department of Defense benefits from continued access to and support for its SAP enterprise software, crucial for logistics and operational management. This contract ensures the ongoing functionality and maintenance of critical software systems, supporting military operations and administrative functions. The primary beneficiaries are the various branches and units within the DoD that rely on the SAP system for their daily operations. The contract supports the IT infrastructure and workforce within the Defense Logistics Agency and potentially other DoD components.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if follow-on contracts are not competitively bid.
Reliance on a single vendor for critical software maintenance could pose risks if the vendor experiences financial instability or service disruptions.
Ensuring the scope of work accurately reflects evolving SAP functionalities and support needs is crucial to avoid scope creep or under-servicing.

Positive Signals

Awarded under full and open competition, indicating a competitive process that likely secured favorable terms.
Firm-fixed-price contract type provides cost certainty for the government.
The vendor, Advantaged Solutions, LLC, has experience in federal contracting, suggesting familiarity with government requirements.
The contract duration aligns with standard software maintenance cycles, allowing for predictable budgeting.

Sector Analysis

This contract falls within the broader Information Technology sector, specifically focusing on enterprise resource planning (ERP) software maintenance. The market for SAP software maintenance and support is substantial, with numerous vendors offering specialized services. Federal spending on IT maintenance, including ERP systems, represents a significant portion of agency budgets, aimed at ensuring the operational continuity of critical business systems. Comparable spending benchmarks would typically involve analyzing other large federal contracts for similar ERP software support, considering factors like the number of users, modules supported, and service level agreements.

Small Business Impact

This contract was not specifically set aside for small businesses, as indicated by 'sb': false. The prime contractor, Advantaged Solutions, LLC, is not explicitly identified as a small business in the provided data. There is no information available regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal unless the prime contractor voluntarily engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the Defense Logistics Agency. Accountability measures are embedded in the firm-fixed-price contract terms, requiring the delivery of specified maintenance services. Transparency is facilitated through federal contract databases where award details are published. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Department of Defense IT Services
Defense Logistics Agency Software Procurement
SAP Enterprise Software Maintenance Contracts
Federal IT Maintenance and Support
Firm Fixed Price IT Contracts

Risk Flags

Potential for cost increases if scope changes significantly.
Reliance on a single vendor for critical software support.
Need for continuous monitoring of service levels and performance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.1 million to ADVANTAGED SOLUTIONS, LLC. SAP ENTERPRISE SOFTWARE MAINTENANCE

Who is the contractor on this award?

The obligated recipient is ADVANTAGED SOLUTIONS, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $26.1 million.

What is the period of performance?

Start: 2016-08-31. End: 2019-08-31.

What is the track record of Advantaged Solutions, LLC in securing and performing federal contracts, particularly for IT services?

Advantaged Solutions, LLC has a notable history of securing federal contracts, primarily within the IT and professional services domains. While the provided data snippet focuses on this specific SAP maintenance contract, a broader review of federal procurement databases would reveal their portfolio. Companies with a significant federal presence often demonstrate experience navigating complex government procurement regulations, managing large-scale projects, and meeting stringent performance requirements. Their ability to win contracts, especially those competed under full and open competition, suggests a competitive offering in terms of price, technical capability, and past performance. Further analysis would involve examining their contract values, agencies served, and any reported performance issues or successes to fully assess their track record.

How does the awarded price of $26 million for three years of SAP maintenance compare to similar federal contracts?

The awarded price of approximately $26 million over three years for SAP enterprise software maintenance translates to roughly $8.67 million per year. This figure needs to be contextualized by the specific SAP modules covered, the number of users supported, the level of support (e.g., 24/7 vs. business hours), and the specific service level agreements (SLAs) in place. For large federal agencies utilizing comprehensive SAP implementations, this annual cost is within a plausible range. However, without detailed comparisons to contracts with identical scope and service levels, it's difficult to definitively state if it represents superior or inferior value. Benchmarking against contracts for similar ERP systems (e.g., Oracle) or other SAP maintenance contracts within the DoD or other large agencies would provide a more robust comparison point for assessing value for money.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Key risks include potential vendor lock-in if future renewals are not competitively bid, service disruptions if Advantaged Solutions, LLC faces operational challenges, and the possibility of the scope of work not adequately addressing evolving SAP functionalities or user needs. Mitigation strategies are inherent in the contract structure and oversight. The 'full and open competition' award mechanism aims to prevent long-term lock-in by ensuring future opportunities are open to all bidders. The firm-fixed-price nature incentivizes the contractor to maintain service quality within the agreed budget. Robust oversight by the Defense Logistics Agency, including performance monitoring against SLAs and regular contract reviews, is crucial for identifying and addressing potential issues proactively. Clear communication channels and defined escalation procedures also help manage risks.

How effective is the firm-fixed-price contract type in ensuring value for money for this SAP maintenance service?

The firm-fixed-price (FFP) contract type is generally effective in ensuring value for money for services like SAP maintenance, provided the scope of work is well-defined and stable. FFP shifts the risk of cost overruns to the contractor, incentivizing them to manage their resources efficiently to maintain profitability. This predictability benefits the government by establishing a clear ceiling on costs. For maintenance services where the deliverables are understood, FFP encourages the contractor to perform efficiently to maximize their profit margin. However, if the scope of work is subject to significant change or unforeseen complexities arise, an FFP contract might lead to change order negotiations that could increase costs, or conversely, the contractor might be disincentivized from providing enhanced support if it exceeds the fixed price without additional compensation. Regular performance monitoring is still essential to ensure the contractor is meeting the required service levels.

What is the historical spending pattern for SAP enterprise software maintenance within the Department of Defense?

Historical spending on SAP enterprise software maintenance within the Department of Defense (DoD) is substantial and likely follows a multi-year trend. Agencies like the DoD rely heavily on ERP systems like SAP for managing complex logistics, financial, and personnel data. Spending typically involves annual maintenance fees for software licenses, support services, and potentially updates or patches. Over the years, the DoD has invested billions in its various IT systems, including SAP implementations across different branches and commands. This specific $26 million contract is one component of that larger IT expenditure. Analyzing historical data would reveal fluctuations based on contract renewals, system upgrades, and changes in software versions or vendor support models. The trend is generally one of sustained, significant investment to maintain the operational readiness and efficiency of these critical systems.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

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: 4810 JAY ST NE, WASHINGTON, DC, 20019

Business Categories: Black American Owned Business, Category Business, HUBZone Firm, Minority Owned Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $26,054,467

Exercised Options: $26,054,467

Current Obligation: $26,054,467

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS35F0926R

IDV Type: FSS

Timeline