DoD's $17.5M ServiceNow acquisition for AESMP program awarded to Carahsoft Technology Corp

Contract Overview

Contract Amount: $17,453,878 ($17.5M)

Contractor: Carahsoft Technology Corp

Awarding Agency: Department of Defense

Start Date: 2023-11-30

End Date: 2025-11-09

Contract Duration: 710 days

Daily Burn Rate: $24.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ACQUISITION OF SERVICENOW TOTAL IMPACT IN SUPPORT OF AESMP PROGRAM.

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $17.5 million to CARAHSOFT TECHNOLOGY CORP for work described as: ACQUISITION OF SERVICENOW TOTAL IMPACT IN SUPPORT OF AESMP PROGRAM. Key points: 1. Value for money assessed against market rates for similar enterprise software licenses and support. 2. Competition dynamics indicate a sole-source award, potentially limiting price discovery and increasing costs. 3. Risk indicators include reliance on a single vendor for critical IT infrastructure. 4. Performance context is tied to the Army's AESMP program, suggesting a need for robust IT support. 5. Sector positioning within custom computer programming services, highlighting the importance of software solutions.

Value Assessment

Rating: fair

The contract's value of $17.5 million for ServiceNow Total Impact over approximately two years requires careful benchmarking. While ServiceNow is a widely adopted enterprise platform, the specific modules and support levels included are crucial for a precise value assessment. Without detailed scope, comparing it to similar government or commercial contracts for enterprise software suites is challenging. The fixed-price nature provides some cost certainty, but the absence of competition raises concerns about whether the government secured the best possible pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This approach is typically used when a specific product or service is only available from a single source, or in cases of urgent need. The lack of multiple bidders means that the government did not benefit from the price reductions and innovation that can arise from a competitive bidding process. This limits the government's ability to negotiate favorable terms and pricing.

Taxpayer Impact: For taxpayers, a sole-source award means there is a higher risk of paying a premium for the software and associated services. Without competitive pressure, the contractor has less incentive to offer the lowest possible price.

Public Impact

The Department of the Army benefits from this acquisition through enhanced IT support for its AESMP program. Services delivered include access to ServiceNow's Total Impact platform, likely encompassing workflow automation, IT service management, and potentially other enterprise functions. The geographic impact is primarily within the Department of Defense, with potential reach to various Army installations. Workforce implications may include improved efficiency for IT staff and end-users relying on the AESMP program's functionalities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price negotiation and potential cost savings.
Reliance on a single vendor for critical software could lead to vendor lock-in.
Potential for cost increases in future renewals or expansions due to lack of competition.

Positive Signals

Award to Carahsoft Technology Corp, a known government IT solutions provider.
Fixed-price contract type offers cost predictability for the duration.
Supports a specific program (AESMP) within the Department of the Army, indicating a defined need.

Sector Analysis

The acquisition falls within the broader IT services sector, specifically custom computer programming and software licensing. The market for enterprise resource planning (ERP) and IT service management (ITSM) software, like ServiceNow, is dominated by a few major players. Government spending in this area is substantial, driven by the need for modern, integrated systems to manage complex operations. Benchmarks for similar enterprise software deals often vary widely based on modules, user counts, and support levels, but consistent, long-term contracts are common.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. Carahsoft Technology Corp, while a reseller, is a large business. The absence of small business set-asides or explicit subcontracting goals means that the direct economic benefit to the small business ecosystem from this specific award is likely minimal, unless Carahsoft voluntarily engages small businesses in its fulfillment process.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the fixed-price contract structure, requiring delivery of specified services. Transparency is limited by the sole-source nature of the award, but contract details should be publicly available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

General Services Administration (GSA) Schedules
Department of Defense Enterprise Software Agreements
IT Service Management Software Procurements
Custom Computer Programming Services Contracts

Risk Flags

Sole-source award
Potential for cost overruns
Vendor lock-in risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.5 million to CARAHSOFT TECHNOLOGY CORP. ACQUISITION OF SERVICENOW TOTAL IMPACT IN SUPPORT OF AESMP PROGRAM.

Who is the contractor on this award?

The obligated recipient is CARAHSOFT TECHNOLOGY CORP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $17.5 million.

What is the period of performance?

Start: 2023-11-30. End: 2025-11-09.

What specific ServiceNow modules and support levels are included in this $17.5 million contract, and how do they align with the AESMP program's requirements?

The provided data indicates the acquisition is for 'ServiceNow Total Impact'. While 'Total Impact' suggests a comprehensive suite, the specific modules (e.g., IT Service Management, HR Service Delivery, Customer Service Management, Security Operations) and the level of support (e.g., standard, professional, enterprise) are not detailed. To assess value, a breakdown of these components is necessary. The alignment with the AESMP program's requirements would depend on the program's specific needs for workflow automation, IT support, and operational management. Without this granular detail, it's difficult to confirm if the investment is precisely tailored to the program's objectives or if it includes extraneous capabilities.

How does the $17.5 million price compare to similar sole-source or competitively awarded ServiceNow contracts for enterprise-level deployments within the Department of Defense or other federal agencie

Benchmarking this $17.5 million sole-source award is challenging without specific details on user count, module scope, and contract duration. However, large-scale ServiceNow deployments for federal agencies can range from several million to tens of millions of dollars annually. Sole-source awards, by their nature, often carry a price premium compared to competitively bid contracts. To perform a robust comparison, one would need to analyze publicly available contract data for similar ServiceNow suites (e.g., Enterprise, Business) awarded to other large federal agencies or DoD components, looking at the price per user or per module over comparable timeframes. The absence of competition here suggests the price may not reflect the lowest achievable market rate.

What is Carahsoft Technology Corp's track record in delivering ServiceNow solutions to the federal government, particularly for large-scale IT programs?

Carahsoft Technology Corp is a major reseller of IT solutions to the U.S. government, including software from vendors like ServiceNow. They have a well-established presence and extensive experience facilitating government procurements through various contract vehicles, such as NASA SEWP and IT-70. While Carahsoft primarily acts as a reseller and distributor, their track record involves successfully navigating the complexities of government contracting to deliver software and related support. Their ability to secure large contracts like this one suggests a strong understanding of government IT needs and procurement processes. However, the actual implementation and technical support are often provided by ServiceNow directly or by authorized implementation partners, rather than Carahsoft itself.

What are the potential risks associated with a sole-source acquisition of enterprise software like ServiceNow, and what mitigation strategies are in place?

The primary risks of a sole-source acquisition for enterprise software include higher costs due to lack of competition, potential vendor lock-in, and reduced flexibility in future technology choices. Without competitive pressure, the vendor has less incentive to offer the lowest price or the most innovative solutions. Vendor lock-in can make it difficult and expensive to switch to alternative platforms later. Mitigation strategies often involve rigorous negotiation of contract terms, including pricing, service level agreements (SLAs), and exit clauses. Agencies may also conduct independent market research to ensure the price is fair and reasonable, and establish clear performance metrics to hold the vendor accountable. For ServiceNow, this might involve negotiating multi-year agreements with capped price increases or securing favorable terms for future module additions.

How does this $17.5 million contract fit into the broader context of the Department of the Army's IT modernization efforts and spending patterns?

This $17.5 million contract for ServiceNow Total Impact likely represents a component of the Department of the Army's broader IT modernization strategy, aimed at consolidating platforms, improving service delivery, and enhancing operational efficiency. Federal agencies, including the DoD, are increasingly adopting enterprise-wide software solutions like ServiceNow to streamline workflows, manage IT infrastructure, and improve data accessibility. Spending on such platforms can be substantial, reflecting the critical role of IT in supporting military operations and administrative functions. This specific award suggests a focus on leveraging a unified platform for the AESMP program, potentially replacing disparate systems and enabling better integration across different Army functions. Understanding its place requires examining the Army's overall IT budget and strategic technology goals.

Industry Classification

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

Product/Service Code: IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 11493 SUNSET HILLS RD, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $17,453,878

Exercised Options: $17,453,878

Current Obligation: $17,453,878

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W519TC23D0005

IDV Type: IDC

Timeline