DoD's $18.5M contract for JDA/Blue Yonder software maintenance supports critical logistics operations

Contract Overview

Contract Amount: $18,552,971 ($18.6M)

Contractor: Blue Yonder, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-11-30

End Date: 2026-11-30

Contract Duration: 1,096 days

Daily Burn Rate: $16.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: JDA/BLUE YONDER ENTERPRISE SOFTWARE MAINTENANCE IN SUPPORT OF THE DLA ENTERPRISE.

Place of Performance

Location: FORT BELVOIR, FAIRFAX County, VIRGINIA, 22060

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $18.6 million to BLUE YONDER, INC. for work described as: JDA/BLUE YONDER ENTERPRISE SOFTWARE MAINTENANCE IN SUPPORT OF THE DLA ENTERPRISE. Key points: 1. The contract ensures continued access to essential enterprise software for the Defense Logistics Agency. 2. Blue Yonder, Inc. is the sole provider of maintenance for this specific software. 3. The contract duration of approximately three years suggests a stable, ongoing need for the service. 4. The firm-fixed-price structure aims to control costs and provide predictability. 5. This spending supports the DLA's mission to provide logistics support to the U.S. Armed Forces. 6. The contract was awarded under full and open competition after exclusion of sources, indicating a competitive process. 7. Virginia is the state where the contract is being performed.

Value Assessment

Rating: good

The contract value of $18.55 million over approximately three years for enterprise software maintenance appears reasonable given the critical nature of logistics support. Benchmarking against similar enterprise software maintenance contracts is challenging without specific details on the software's complexity and user base. However, the firm-fixed-price nature of the award suggests an effort to establish predictable costs for the government. The absence of a specific Public Law 114-264 (Section 804) justification or other specific cost-saving mandates implies standard procurement practices were followed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This indicates that while the initial procurement may have had some restrictions, the final award was made after a competitive process where all responsible sources were permitted to submit offers. The specific details of the 'exclusion of sources' are not provided, but the 'full and open' designation suggests a robust competition was ultimately achieved, which is generally beneficial for price discovery.

Taxpayer Impact: A competitive award process, even with initial exclusions, is generally favorable for taxpayers as it encourages multiple vendors to bid, potentially driving down prices and improving the quality of services offered.

Public Impact

The primary beneficiaries are the U.S. Armed Forces, who rely on the Defense Logistics Agency for essential supplies and equipment. The contract ensures the continued functionality and support of the JDA/Blue Yonder enterprise software, critical for DLA's operational efficiency. The services delivered are maintenance and support for a key software system, preventing disruptions in logistics operations. The geographic impact is national, supporting military operations across various locations. Workforce implications include ensuring IT professionals are available to maintain and support the software, both within the government and potentially at the contractor's site.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the software is highly proprietary and difficult to replace.
Reliance on a single vendor for maintenance could lead to price increases in future contract renewals.
The 'exclusion of sources' in the competition history warrants further investigation to ensure no viable alternatives were overlooked.

Positive Signals

The firm-fixed-price contract structure helps mitigate cost overrun risks.
Awarding under full and open competition, even after exclusions, suggests an effort to maximize market participation.
The contract supports a critical government function (logistics), indicating a clear and necessary requirement.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on enterprise resource planning (ERP) software maintenance. The market for ERP software and its associated maintenance is substantial, with major players like Blue Yonder (formerly JDA) serving large enterprises, including government agencies. Spending on IT maintenance and support is a significant portion of overall IT budgets for organizations, ensuring the continued operation and security of critical systems. Comparable spending benchmarks would typically involve analyzing maintenance costs as a percentage of the original software license or subscription fees, which is standard practice in the IT industry.

Small Business Impact

This contract does not appear to have a small business set-aside (ss: false, sb: false). As a sole-source provider for maintenance on this specific enterprise software, Blue Yonder, Inc. is likely a large business. There is no explicit indication of subcontracting requirements for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, though Blue Yonder may engage small businesses in other capacities not detailed here.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense and the Defense Logistics Agency. As a firm-fixed-price contract, the primary oversight would focus on ensuring the contractor meets the defined service level agreements and maintenance requirements. Accountability measures are built into the contract terms and conditions. Transparency is generally facilitated through contract databases like FPDS, where basic award information is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Logistics Agency IT Support Services
Department of Defense Enterprise Software Licensing
Federal Civilian Agency ERP System Maintenance
Supply Chain Management Software Contracts
JDA/Blue Yonder Software Support Contracts

Risk Flags

Potential Vendor Lock-in
Sole Source Maintenance Dependency
Limited Competition History Detail

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.6 million to BLUE YONDER, INC.. JDA/BLUE YONDER ENTERPRISE SOFTWARE MAINTENANCE IN SUPPORT OF THE DLA ENTERPRISE.

Who is the contractor on this award?

The obligated recipient is BLUE YONDER, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $18.6 million.

What is the period of performance?

Start: 2023-11-30. End: 2026-11-30.

What is the specific JDA/Blue Yonder software product being maintained under this contract, and what is its criticality to DLA operations?

The provided data does not specify the exact JDA/Blue Yonder software product. However, given its use by the Defense Logistics Agency (DLA), it is highly likely to be a core Enterprise Resource Planning (ERP) or Supply Chain Management (SCM) system. These systems are critical for managing inventory, procurement, distribution, and financial data across the vast network of military operations. The criticality stems from ensuring that the DLA can effectively source, store, and deliver the necessary equipment and supplies to all branches of the U.S. Armed Forces, underpinning readiness and operational capability. Disruptions to such systems could have significant cascading effects on military logistics and mission accomplishment.

How does the annual cost of this maintenance contract compare to industry benchmarks for similar enterprise software?

Without knowing the specific software product, its modules, the number of users, and the level of support required, a precise comparison to industry benchmarks is difficult. However, enterprise software maintenance typically ranges from 15% to 25% of the initial license or subscription cost annually. If this contract represents ongoing maintenance for a substantial ERP system, the $18.55 million over approximately three years (averaging ~$6.18 million per year) would need to be evaluated against the original acquisition cost and the vendor's standard maintenance rates. Blue Yonder, as a major enterprise software provider, likely charges rates consistent with other large ERP vendors. A detailed analysis would require comparing the scope of services (e.g., 24/7 support, patch releases, bug fixes) against similar contracts for comparable software.

What were the specific reasons for the 'exclusion of sources' during the procurement process, and were alternative solutions considered?

The data indicates the contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This phrasing suggests that while the competition was ultimately broad, there might have been an initial phase where certain sources were excluded, possibly due to proprietary technology, existing integration requirements, or specific performance capabilities that only a limited number of vendors could meet. The exact reasons for this exclusion are not detailed in the provided summary. To ensure optimal value, it would be beneficial to understand if these exclusions were based on technical necessity or if they potentially limited competition unnecessarily. Further review of the solicitation documents and award justification would clarify if alternative solutions were evaluated or if the exclusion was based on a determination that only Blue Yonder could provide the required maintenance for their specific software.

What is Blue Yonder, Inc.'s track record with the Department of Defense and other federal agencies regarding similar software maintenance contracts?

Blue Yonder, Inc. (and its predecessor JDA Software) has a history of providing supply chain management and enterprise software solutions to various large organizations, including government entities. Their track record with the Department of Defense (DoD) and other federal agencies would typically be assessed through past performance evaluations during the bidding process. Agencies often review a contractor's history of meeting delivery schedules, quality standards, and cost targets on previous contracts. While specific details of Blue Yonder's performance on prior DoD contracts are not in this summary, their continued engagement with agencies like the DLA suggests a generally acceptable performance history. A deeper dive would involve reviewing past performance questionnaires and contract close-out reports.

What are the potential risks associated with relying on a single vendor for maintenance of such a critical enterprise system?

Relying on a single vendor, like Blue Yonder, for maintenance of a critical enterprise system presents several risks. Firstly, there's the risk of vendor lock-in, where the proprietary nature of the software makes it difficult and costly to switch to a different provider, potentially reducing negotiating leverage. Secondly, future price increases are a concern; as the software ages or the vendor's market position strengthens, maintenance costs could escalate significantly. Thirdly, the vendor's financial stability or strategic direction could impact long-term support availability. Finally, if the vendor discontinues support for certain versions or prioritizes other clients, the DLA might face challenges in receiving timely updates, security patches, or technical assistance, potentially impacting operational continuity.

How does this contract align with the DLA's broader IT modernization strategy and spending patterns?

This contract represents spending on maintaining existing, critical enterprise software, which is a common component of IT budgets, especially for large, established organizations like the DLA. While modernization often focuses on adopting new technologies or cloud-based solutions, maintaining the operational integrity of current core systems is essential. This contract likely supports the DLA's ongoing operations while they potentially pursue separate initiatives for modernization. Analyzing this contract's alignment would require understanding the DLA's specific IT modernization roadmap. If the JDA/Blue Yonder system is slated for replacement, this maintenance contract might be viewed as a bridge. If it's a system the DLA intends to keep long-term, then this spending is a necessary operational cost. Historical spending data on DLA's IT maintenance would provide context on whether this contract's value is consistent with past expenditures.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Cubix Corporation

Address: 15059 N SCOTTSDALE RD STE 400, SCOTTSDALE, AZ, 85254

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

Financial Breakdown

Contract Ceiling: $18,552,971

Exercised Options: $18,552,971

Current Obligation: $18,552,971

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline