DoD awards $17.6M ServiceNow contract to Carahsoft for AESMP program, raising competition concerns

Contract Overview

Contract Amount: $17,655,966 ($17.7M)

Contractor: Carahsoft Technology Corp

Awarding Agency: Department of Defense

Start Date: 2025-11-19

End Date: 2026-11-18

Contract Duration: 364 days

Daily Burn Rate: $48.5K/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 $17.7 million to CARAHSOFT TECHNOLOGY CORP for work described as: ACQUISITION OF SERVICENOW TOTAL IMPACT IN SUPPORT OF AESMP PROGRAM. Key points: 1. Significant award value of $17.6M for ServiceNow. 2. Sole awardee, Carahsoft Technology Corp, limits competitive options. 3. Potential risk due to lack of competition and fixed-price contract. 4. IT sector spending on software and services continues to grow.

Value Assessment

Rating: fair

The $17.6M award for ServiceNow appears high without a competitive benchmark. Pricing assessment is difficult due to the sole-source nature of the award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for this ServiceNow acquisition.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. The Department of the Army is acquiring critical software without exploring market alternatives. Reliance on a single vendor for essential IT services can create long-term dependencies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for overpayment

Positive Signals

Supports critical AESMP program
Firm fixed-price contract provides cost certainty

Sector Analysis

This acquisition falls within the IT sector, specifically custom computer programming services. Spending on enterprise software solutions like ServiceNow is common across government agencies.

Small Business Impact

The contract was awarded to Carahsoft Technology Corp, which is not identified as a small business in the provided data. Further analysis would be needed to determine if small businesses were subcontracting opportunities.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny from oversight bodies to ensure the government is receiving fair value. Transparency in the justification for not competing is crucial.

Related Government Programs

Custom Computer Programming Services
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Lack of competition
Potential for inflated pricing
Limited vendor options
No small business participation noted

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.7 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 $17.7 million.

What is the period of performance?

Start: 2025-11-19. End: 2026-11-18.

What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of market availability. Without a competitive process, ensuring fair and reasonable pricing relies heavily on government negotiation, historical pricing data, and independent cost estimates. Agencies must document these efforts thoroughly to demonstrate responsible stewardship of taxpayer funds.

What are the long-term risks associated with acquiring enterprise software like ServiceNow through sole-source contracts?

Long-term risks include vendor lock-in, escalating costs without competitive pressure, and reduced flexibility to adopt alternative solutions. Agencies may become dependent on a single vendor's roadmap and pricing structure, potentially hindering innovation and increasing overall IT expenditure over time. This can also limit opportunities for smaller, innovative companies to enter the government market.

How does this sole-source award impact the Department of the Army's ability to achieve cost savings and operational efficiencies?

Sole-source awards generally limit the potential for cost savings that arise from competitive bidding. Without market pressure, the awarded price may not reflect the best possible value. While ServiceNow itself can drive efficiencies, the acquisition method here may prevent the Army from realizing maximum cost-effectiveness and could impact overall budget allocation for other critical needs.

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: $17,655,966

Exercised Options: $17,655,966

Current Obligation: $17,655,966

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W519TC23D0005

IDV Type: IDC

Timeline