Award Context and Insight

07/13/2021 4:09 AM

Zscaler Gets CBP Renewal Worth Up to $7.8 Million

Zscaler on July 12 received a three-year contract worth up to $7.8 million from U.S. Customs and Border Protection. The award appears to renew licenses the agency purchased for $992k a year ago.

While the maximum value of the new award includes room for expanded capacity, it's unclear if CBP intends to boost spending with Zscaler in the first year of the deal. Just $576k of the $7.8 million ceiling amount was obligated, or guaranteed, at the time of signing, a decline from the $992k obligated in July 2020 under the prior contract. While additional transactions could be approved over the next 12 months, there's no guarantee the contract will reach its maximum implied run rate of $2.6 million/year (or even match last year's spending level).

Notably, CBP's prior contract with Zscaler had a one-year ceiling amount of $3.86 million but generated only $992k. This may indicate that CBP has been planning to expand usage of Zscaler but has experienced delays in implementation.

CBP Zscaler Transactions:

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