VA Spends $1.73B on Microsoft Software and Services via Full and Open Competition

Contract Overview

Contract Amount: $1,730,532,627 ($1.7B)

Contractor: Dell Federal Systems L.P

Awarding Agency: Department of Veterans Affairs

Start Date: 2017-04-01

End Date: 2022-03-31

Contract Duration: 1,825 days

Daily Burn Rate: $948.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THE PURPOSE OF THIS ACQUISITION IS TO PROVIDE THE DEPARTMENT OF VETERANS AFFAIRS WITH AN ENTERPRISE AGREEMENT FOR BRAND NAME MICROSOFT SOFTWARE PRODUCTS AND SERVICES. THIS ENTERPRISE AGREEMENT WILL PROVIDE 1) SUPPORT SERVICES 2) OPERATIONAL SUPPORT AND 3) ADDITIONAL LICENSES OF MICROSOFT PRODUCTS, CURRENT AND PLANNED, TO SUPPORT THE VA ENTERPRISE. SUBJECT PROCUREMENT WAS COMPETED AMONG MICROSOFT'S EIGHT AUTHORIZED FEDERAL GOVERNMENT LICENSE SOLUTION PROVIDERS. IGF::OT::IGF

Place of Performance

Location: ROUND ROCK, WILLIAMSON County, TEXAS, 78682

State: Texas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $1.73 billion to DELL FEDERAL SYSTEMS L.P for work described as: THE PURPOSE OF THIS ACQUISITION IS TO PROVIDE THE DEPARTMENT OF VETERANS AFFAIRS WITH AN ENTERPRISE AGREEMENT FOR BRAND NAME MICROSOFT SOFTWARE PRODUCTS AND SERVICES. THIS ENTERPRISE AGREEMENT WILL PROVIDE 1) SUPPORT SERVICES 2) OPERATIONAL SUPPORT AND 3) ADDITIONAL LICENSES OF … Key points: 1. Significant investment in essential Microsoft software and services for VA operations. 2. Procurement competed among eight authorized federal license solution providers. 3. Potential risk of vendor lock-in and high costs for proprietary software. 4. IT sector spending, specifically on software licensing and support.

Value Assessment

Rating: fair

The $1.73 billion cost over five years for Microsoft products and services appears substantial. Benchmarking against similar enterprise software agreements for government agencies would be necessary to determine if this pricing is competitive, especially considering potential volume discounts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was competed among eight authorized federal government license solution providers, indicating a competitive process. This method aims to ensure fair pricing and access to a range of options, though the specific pricing outcomes are not detailed.

Taxpayer Impact: Taxpayers are funding essential IT infrastructure for the Department of Veterans Affairs, aiming for operational efficiency and support for veteran services.

Public Impact

Ensures VA employees have access to necessary Microsoft software for daily operations. Supports critical IT infrastructure for veteran services and administrative functions. Potential for cost savings through competitive bidding among authorized resellers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Reliance on a single vendor (Microsoft) for core software.
Potential for price increases in future renewals.
Complexity of managing enterprise-wide software licenses.

Positive Signals

Competitive bidding process among multiple authorized providers.
Supports critical government functions.
Clear contract period with defined end date.

Sector Analysis

This acquisition falls within the Information Technology sector, specifically focusing on software licensing and support services. Government spending on enterprise software agreements is common, with benchmarks varying widely based on the software suite and user base.

Small Business Impact

The data does not indicate specific participation or benefits for small businesses in this particular contract. The competition was among authorized federal government license solution providers, which may include large corporations.

Oversight & Accountability

The contract was awarded under full and open competition, suggesting a degree of oversight in the bidding process. Further oversight would involve monitoring contract performance, adherence to terms, and cost-effectiveness throughout the agreement's duration.

Related Government Programs

Other Computer Related Services
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

High dollar value concentrated on a single vendor.
Potential for future price escalations upon renewal.
Dependency on Microsoft for critical IT infrastructure.
Lack of specific user or product breakdown for cost analysis.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $1.73 billion to DELL FEDERAL SYSTEMS L.P. THE PURPOSE OF THIS ACQUISITION IS TO PROVIDE THE DEPARTMENT OF VETERANS AFFAIRS WITH AN ENTERPRISE AGREEMENT FOR BRAND NAME MICROSOFT SOFTWARE PRODUCTS AND SERVICES. THIS ENTERPRISE AGREEMENT WILL PROVIDE 1) SUPPORT SERVICES 2) OPERATIONAL SUPPORT AND 3) ADDITIONAL LICENSES OF MICROSOFT PRODUCTS, CURRENT AND PLANNED, TO SUPPORT THE VA ENTERPRISE. SUBJECT PROCUREMENT WAS COMPETED AMONG MICROSOFT'S EIGHT AUTHORIZED FEDERAL GOVERNMENT LICENSE SOLUTION PROVIDERS. IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is DELL FEDERAL SYSTEMS L.P.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $1.73 billion.

What is the period of performance?

Start: 2017-04-01. End: 2022-03-31.

What is the total cost per user per year for this Microsoft enterprise agreement?

The provided data does not specify the number of users or a per-user cost. The total contract value is $1.73 billion over 1825 days (5 years). To calculate a per-user cost, the number of users and the specific software licenses assigned to each user would be required. Without this information, a precise per-user cost cannot be determined.

What specific Microsoft products and services are included in this $1.73 billion agreement?

The agreement covers brand-name Microsoft software products and services, including support services, operational support, and additional licenses for current and planned Microsoft products. However, the data does not list the specific product names (e.g., Windows, Office 365, Azure services) or the exact breakdown of services included in the $1.73 billion total.

How does the pricing of this agreement compare to other federal agencies' Microsoft enterprise agreements?

The provided data does not include comparative pricing information. While the procurement was competed among eight authorized resellers, the specific pricing structure and discounts achieved are not detailed. A comprehensive comparison would require access to pricing data from similar enterprise agreements across other federal agencies for the same or comparable Microsoft product suites.

Industry Classification

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

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: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Francisco Partners Management, L.P.

Address: 1 DELL WAY, ROUND ROCK, TX, 78682

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $1,932,983,491

Exercised Options: $1,730,789,168

Current Obligation: $1,730,532,627

Actual Outlays: $196,186

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F0884P

IDV Type: FSS

Timeline