VA's T4NG program modification shifts $18.9M contract from HMS to Sierra 7, impacting IT services

Contract Overview

Contract Amount: $18,915,224 ($18.9M)

Contractor: Sierra7, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2021-01-06

End Date: 2026-01-05

Contract Duration: 1,825 days

Daily Burn Rate: $10.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: TRANSFORMATION TWENTY-ONE TOTAL TECHNOLOGY NEXT GENERATION (T4NG) PROGRAM MODIFICATION P00008 NOVATION HMS TECHNOLOGIES, INC. TO SIERRA 7, INC.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20005

State: District of Columbia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $18.9 million to SIERRA7, INC. for work described as: TRANSFORMATION TWENTY-ONE TOTAL TECHNOLOGY NEXT GENERATION (T4NG) PROGRAM MODIFICATION P00008 NOVATION HMS TECHNOLOGIES, INC. TO SIERRA 7, INC. Key points: 1. Contract novation involves a significant transfer of a large IT services contract. 2. The shift from HMS Technologies to Sierra 7, Inc. requires careful monitoring of performance continuity. 3. Potential risks include integration challenges and disruption to ongoing services. 4. The contract is part of a larger IT services program (T4NG) for the VA. 5. Computer Systems Design Services are the primary focus of this contract. 6. The contract's duration extends to January 2026, indicating long-term service needs.

Value Assessment

Rating: fair

This contract modification represents a novation, transferring ownership from one contractor to another. Direct value-for-money assessment is challenging without knowing the specific terms of the novation and the pricing structure under the new contractor. However, the original contract was awarded under full and open competition, suggesting a competitive pricing environment initially. Benchmarking against similar IT services contracts for the VA would be necessary to determine if the current pricing remains competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The original contract was awarded through full and open competition, indicating a robust bidding process. The novation itself does not change the competition level of the original award but shifts the responsibility to a new entity. The number of bidders for the original T4NG contract was substantial, which generally leads to better price discovery and value for the government.

Taxpayer Impact: The initial full and open competition likely secured favorable pricing for taxpayers. The novation requires ensuring the new contractor can deliver services at a comparable or improved value proposition.

Public Impact

The Department of Veterans Affairs benefits from continued IT support services. Veterans and VA staff will experience ongoing access to critical IT systems. Services are primarily delivered within the District of Columbia. The contract supports IT infrastructure and potentially impacts the IT workforce through Sierra 7, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for service disruption during contractor transition.
Ensuring continuity of critical IT services for the VA.
Assessing the new contractor's capability to meet performance requirements.
Monitoring compliance with contract terms under new ownership.

Positive Signals

Contract awarded under full and open competition, suggesting a competitive process.
The T4NG program is a well-established vehicle for VA IT needs.
The contract has a defined end date, providing a clear timeframe for services.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a critical component of the broader Information Technology (IT) industry. The IT services market for the federal government is substantial, with agencies like the VA being major consumers. The T4NG program itself is a significant Indefinite Delivery/Indefinite Quantity (IDIQ) contract vehicle designed to procure a wide range of IT solutions, indicating this specific contract is part of a larger strategic IT procurement effort.

Small Business Impact

The provided data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside. However, the prime contractor, Sierra 7, Inc., may engage small businesses as subcontractors, which would be detailed in their subcontracting plan, if applicable.

Oversight & Accountability

Oversight for this contract would typically reside with the Department of Veterans Affairs contracting officers and program managers. Transparency is facilitated through contract databases like FPDS. Accountability measures are embedded in the contract terms, including performance standards and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Transformation Twenty-One Total Technology (T4NG) Program
Department of Veterans Affairs IT Modernization Efforts
Computer Systems Design Services Contracts
Federal IT Services Procurement

Risk Flags

Contract Novation Risk
Service Continuity Concern
Contractor Performance Uncertainty

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $18.9 million to SIERRA7, INC.. TRANSFORMATION TWENTY-ONE TOTAL TECHNOLOGY NEXT GENERATION (T4NG) PROGRAM MODIFICATION P00008 NOVATION HMS TECHNOLOGIES, INC. TO SIERRA 7, INC.

Who is the contractor on this award?

The obligated recipient is SIERRA7, INC..

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 $18.9 million.

What is the period of performance?

Start: 2021-01-06. End: 2026-01-05.

What is the track record of Sierra 7, Inc. in managing large federal IT contracts, particularly those involving novation?

Assessing Sierra 7, Inc.'s track record requires a review of their past performance on federal contracts, especially those of similar size and scope to the T4NG modification. Information on their experience with contract novations is crucial to understand their capability to seamlessly take over existing obligations and maintain service delivery. A deep dive into their performance evaluations, any past issues or disputes, and their overall financial stability would provide a clearer picture of their suitability to manage this significant VA contract. Without specific performance data on Sierra 7, Inc. related to this contract or similar ones, it's difficult to definitively assess their capabilities beyond the fact that they were approved to take over this contract.

How does the pricing under Sierra 7, Inc. compare to the original pricing under HMS Technologies, Inc. for similar services?

A direct comparison of pricing between HMS Technologies, Inc. and Sierra 7, Inc. for this specific contract modification is not readily available from the provided data. The novation transfers the contract, but the specific financial terms of the transfer and any adjustments to the underlying pricing structure are not detailed. To assess value, one would need to compare the rates and total contract value under Sierra 7, Inc. against the original contract's rates and against market benchmarks for comparable Computer Systems Design Services. Factors such as changes in scope, service level agreements, and the overall economic climate since the original award would influence any pricing comparison.

What are the key performance indicators (KPIs) for this contract, and how will Sierra 7, Inc.'s performance be measured?

The specific Key Performance Indicators (KPIs) for this contract modification are not detailed in the provided data. However, as part of the T4NG program, it is expected that the contract includes performance standards related to service availability, response times, system uptime, security compliance, and user satisfaction. Sierra 7, Inc.'s performance will be measured against these established KPIs through regular reporting, quality assurance reviews, and potentially through contractor performance assessment reporting (CPAR) systems. The Department of Veterans Affairs contracting officer's representative (COR) and contracting officer (CO) are responsible for monitoring and evaluating Sierra 7, Inc.'s adherence to these performance metrics.

What is the historical spending pattern for the T4NG program, and how does this $18.9M modification fit within that context?

The T4NG program is a large, multi-award IDIQ contract vehicle with a significant overall ceiling, designed to support the VA's diverse IT needs. Historical spending under T4NG has been substantial, reflecting the VA's ongoing investment in technology. This $18.9 million modification represents a portion of the total contract value awarded to a specific task order or delivery order under the T4NG umbrella. Its significance lies in the transfer of this specific financial commitment from one contractor to another, rather than necessarily indicating a surge or decrease in overall T4NG program spending. Understanding the cumulative spending across all T4NG orders would provide broader context.

Are there any identified risks associated with the novation of this contract from HMS Technologies, Inc. to Sierra 7, Inc.?

The primary risks associated with the novation of this contract involve potential disruptions to service continuity and the integration of Sierra 7, Inc. into the VA's IT environment. There's a risk that the transition could lead to temporary performance degradation, delays in service delivery, or challenges in knowledge transfer from the incumbent contractor. Ensuring that Sierra 7, Inc. possesses the necessary technical expertise, security clearances, and operational capacity to immediately assume the responsibilities is critical. The VA will need to closely monitor the transition period to mitigate these risks and ensure that critical IT services remain uninterrupted for veterans and staff.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 11951 FREEDOM DR STE 1300, RESTON, VA, 20190

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Hispanic American Owned Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $26,115,418

Exercised Options: $18,915,224

Current Obligation: $18,915,224

Actual Outlays: $14,371,561

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $953,715

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA11816D1014

IDV Type: IDC

Timeline