DoD's $34.7M SAP Software Maintenance Contract Awarded to Advantaged Solutions, LLC

Contract Overview

Contract Amount: $34,770,346 ($34.8M)

Contractor: Advantaged Solutions, LLC

Awarding Agency: Department of Defense

Start Date: 2019-09-01

End Date: 2022-08-31

Contract Duration: 1,095 days

Daily Burn Rate: $31.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SAP ENTERPRISE SOFTWARE MAINTENANCE

Place of Performance

Location: FORT BELVOIR, FAIRFAX County, VIRGINIA, 22060

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $34.8 million to ADVANTAGED SOLUTIONS, LLC for work described as: SAP ENTERPRISE SOFTWARE MAINTENANCE Key points: 1. Contract awarded for essential SAP enterprise software maintenance, indicating a critical need for ongoing operational support. 2. The contract was secured through full and open competition, suggesting a competitive bidding process. 3. A single delivery order was issued against a larger contract vehicle, implying a structured procurement approach. 4. The duration of 1095 days (3 years) suggests a long-term commitment to maintaining the software. 5. The fixed-price contract type aims to provide cost certainty for the government. 6. The award to Advantaged Solutions, LLC warrants a review of their past performance and pricing.

Value Assessment

Rating: fair

The contract value of $34.7 million over three years for SAP enterprise software maintenance appears to be within a reasonable range for such services, though a direct comparison to similar contracts is needed for a definitive assessment. The fixed-price nature of the contract helps manage cost risks for the government. Benchmarking the per-unit cost of maintenance against industry standards for SAP software would provide further insight into the value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 3 bids suggests a moderate level of competition for this requirement. While more than one bidder is positive, a higher number of bids typically leads to more robust price discovery and potentially lower prices for the government.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple vendors to offer their best pricing and terms, potentially leading to cost savings.

Public Impact

The Department of Defense benefits from continued access to and support for its SAP enterprise software, crucial for its logistical and administrative operations. This contract ensures the uninterrupted functionality of critical business systems, supporting national defense readiness. The services delivered are essential for maintaining the integrity and performance of the software infrastructure. The geographic impact is primarily within the Department of Defense's operational footprint, supporting its global mission.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Need to verify if Advantaged Solutions, LLC has a strong track record with similar large-scale SAP maintenance contracts.
Assess if the fixed-price contract adequately accounts for potential software updates or unforeseen technical challenges.
Evaluate the competitive landscape to understand if the 3 bids truly represent the best possible market price.

Positive Signals

Awarded through full and open competition, indicating a fair and accessible procurement process.
The fixed-price contract type provides budget certainty for the Department of Defense.
The contract duration suggests a stable and reliable support arrangement for critical software.

Sector Analysis

The IT services sector, particularly enterprise software maintenance, is a significant area of federal spending. This contract falls under the category of software publishers and maintenance services, which are essential for government operations. The market for SAP maintenance is dominated by a few key players, and competition can be influenced by the complexity of the software and the need for specialized expertise. Benchmarking against similar government contracts for enterprise resource planning (ERP) software maintenance would be relevant.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit information provided regarding subcontracting plans for small businesses. Further investigation into the prime contractor's subcontracting practices would be necessary to determine the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA) for financial and performance oversight. The Department of Defense's internal audit and inspection general offices would also provide oversight. Transparency is facilitated through contract award databases like FPDS. The fixed-price nature of the contract shifts some risk to the contractor, but performance monitoring remains key.

Related Government Programs

SAP Software Licensing and Maintenance
Enterprise Resource Planning (ERP) Systems Support
Defense Logistics IT Infrastructure
Software and Cloud Services

Risk Flags

Contractor Performance Risk
Cost Reasonableness
Cybersecurity Vulnerability
Software Obsolescence

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.8 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 $34.8 million.

What is the period of performance?

Start: 2019-09-01. End: 2022-08-31.

What is the track record of Advantaged Solutions, LLC in providing SAP enterprise software maintenance to federal agencies?

A review of federal procurement data indicates that Advantaged Solutions, LLC has been awarded contracts for various IT services, including software maintenance. However, specific details regarding their experience with large-scale SAP enterprise software maintenance for the Department of Defense are not immediately available from the provided data. Further investigation into their past performance reports, client testimonials, and the scope of previous SAP-related contracts would be necessary to fully assess their capabilities and reliability in this specific domain. Understanding the size and complexity of past projects will be crucial in determining their suitability for this $34.7 million contract.

How does the awarded price of $34.7 million for SAP software maintenance compare to similar contracts awarded by the DoD or other federal agencies?

Without access to a comprehensive database of comparable SAP enterprise software maintenance contracts, a precise benchmark is difficult. However, $34.7 million over three years averages to approximately $11.57 million per year. This figure needs to be contextualized by the specific SAP modules covered, the number of users, the level of support required (e.g., 24/7 critical support vs. standard business hours), and the specific version of SAP software being maintained. Generally, large-scale ERP maintenance contracts for major federal agencies can range from several million to tens of millions of dollars annually, depending on these factors. A detailed analysis would require comparing contract scope, duration, and specific service level agreements (SLAs) of similar awards.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks include potential cost overruns if the fixed-price contract does not adequately account for unforeseen technical issues or scope creep, contractor performance issues leading to service disruptions, and cybersecurity vulnerabilities within the SAP system. Mitigation strategies include the fixed-price contract structure itself, which places cost risk on the contractor. The Department of Defense will likely implement robust performance monitoring, service level agreements (SLAs) with defined penalties for non-compliance, and regular security audits. The contractor's past performance and technical capabilities, assessed during the competition phase, also serve as a risk mitigation factor.

How effective is the full and open competition process in ensuring value for money for this SAP maintenance contract?

The full and open competition process is designed to maximize value for money by encouraging multiple vendors to submit bids, thereby fostering price competition and innovation. In this case, with 3 bids received, there was a degree of competition. The effectiveness in ensuring value depends on the number and quality of the bidders, the clarity of the solicitation requirements, and the evaluation criteria used. If the bidders were highly qualified and the evaluation process rigorously assessed both technical merit and price, then the competition likely yielded a favorable outcome for the government. However, a higher number of bids often correlates with more aggressive pricing.

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 is likely substantial, given the scale and complexity of its operations. Agencies like the Defense Logistics Agency (DLA) rely heavily on ERP systems like SAP for managing supply chains, logistics, and financial data. Annual spending can fluctuate based on contract renewals, software upgrades, and the introduction of new modules or functionalities. Without specific historical data for this particular contract or broader DoD SAP spending trends, it's difficult to provide precise figures. However, it is reasonable to assume consistent, significant investment in maintaining these critical systems to ensure operational continuity and data integrity.

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

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: SP470119Q0063

Offers Received: 3

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, Corporate Entity Not Tax Exempt, Minority Owned Business, Not Designated a Small Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $140,429,198

Exercised Options: $69,842,849

Current Obligation: $34,770,346

Actual Outlays: $11,528,600

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS35F0926R

IDV Type: FSS

Timeline