VA awards $49.8M for VHA Finance Product Line Support to H2 Technology Group, LLC

Contract Overview

Contract Amount: $49,778,164 ($49.8M)

Contractor: H2 Technology Group, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-09-30

End Date: 2026-12-15

Contract Duration: 806 days

Daily Burn Rate: $61.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: VETERANS HEALTH ADMINISTRATION FINANCE PRODUCT LINE DEVELOPMENT, SECURITY, AND OPERATIONS SUPPORT. THE CONTRACTOR SHALL PROVIDE PRODUCT, OPERATIONS SUPPORT, AND SECURITY COMPLIANCE FOR THE SUB-PRODUCT LINES UNDER THE VHA FINANCE PRODUCT LINE.

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35801

State: Alabama Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $49.8 million to H2 TECHNOLOGY GROUP, LLC for work described as: VETERANS HEALTH ADMINISTRATION FINANCE PRODUCT LINE DEVELOPMENT, SECURITY, AND OPERATIONS SUPPORT. THE CONTRACTOR SHALL PROVIDE PRODUCT, OPERATIONS SUPPORT, AND SECURITY COMPLIANCE FOR THE SUB-PRODUCT LINES UNDER THE VHA FINANCE PRODUCT LINE. Key points: 1. Contract aims to enhance product, operations, and security compliance for VHA Finance. 2. H2 Technology Group, LLC secured the award. 3. The contract duration extends through December 2026. 4. This award represents a significant investment in VHA's financial infrastructure. 5. The scope includes support for sub-product lines within the VHA Finance Product Line. 6. The contract type is Time and Materials, suggesting flexibility in service delivery.

Value Assessment

Rating: good

The contract value of $49.8 million over its period of performance appears reasonable for comprehensive IT support services. Benchmarking against similar contracts for VHA finance operations support would provide a clearer picture of value for money. The Time and Materials pricing model allows for flexibility but requires diligent oversight to ensure costs remain aligned with the work performed and market rates for IT services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of 8 bidders suggests a competitive marketplace for these types of IT support services. This level of competition is generally favorable for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: Full and open competition typically leads to better pricing for taxpayers by fostering a competitive environment among vendors.

Public Impact

Veterans will benefit from improved financial operations and security within the VHA. The contract supports critical IT infrastructure for the Veterans Health Administration. Services delivered will enhance the efficiency and reliability of VHA financial systems. The contract is geographically focused on supporting the VHA's national operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Time and Materials (T&M) contract type can lead to cost overruns if not closely monitored, as it pays for direct labor hours and indirect costs at specified rates, plus a fee.
Ensuring the contractor's personnel possess the necessary security clearances and expertise for sensitive VHA financial data is crucial.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process and potential for competitive pricing.
The contract's focus on security compliance aligns with the critical need to protect sensitive veteran data.
The long-term duration (through late 2026) provides stability for VHA's finance product line development and operations.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computer systems design and related services. The market for such services is large and competitive, with numerous firms capable of providing specialized support for government financial systems. The VHA's need for product development, operations support, and security compliance is a common requirement across federal agencies managing large datasets and complex financial operations.

Small Business Impact

The data indicates this contract was not set aside for small businesses and that small business participation was not a stated requirement. Therefore, the direct impact on small businesses is likely minimal unless H2 Technology Group, LLC engages them as subcontractors. Further analysis would be needed to determine subcontracting plans and their potential benefit to the small business ecosystem.

Oversight & Accountability

Oversight will likely be managed by the Department of Veterans Affairs contracting officers and program managers. Transparency is expected through contract reporting mechanisms. The Inspector General's office may conduct audits or investigations if performance issues or financial irregularities arise.

Related Government Programs

VHA IT Modernization Efforts
Federal Financial Management Systems Support
Cybersecurity Support for Federal Agencies
IT Services for Healthcare Providers

Risk Flags

Potential for cost overruns due to Time and Materials contract type.
Ensuring robust data security and privacy compliance for sensitive financial information.
Need for effective performance monitoring and oversight to ensure value for money.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $49.8 million to H2 TECHNOLOGY GROUP, LLC. VETERANS HEALTH ADMINISTRATION FINANCE PRODUCT LINE DEVELOPMENT, SECURITY, AND OPERATIONS SUPPORT. THE CONTRACTOR SHALL PROVIDE PRODUCT, OPERATIONS SUPPORT, AND SECURITY COMPLIANCE FOR THE SUB-PRODUCT LINES UNDER THE VHA FINANCE PRODUCT LINE.

Who is the contractor on this award?

The obligated recipient is H2 TECHNOLOGY GROUP, LLC.

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 $49.8 million.

What is the period of performance?

Start: 2024-09-30. End: 2026-12-15.

What is the track record of H2 Technology Group, LLC with the Department of Veterans Affairs and other federal agencies?

A review of federal procurement data indicates that H2 Technology Group, LLC has a history of receiving contracts from various federal agencies, including the Department of Veterans Affairs. Their contract awards often fall within the IT services and support categories. To fully assess their track record, a deeper dive into past performance evaluations, any past disputes or contract terminations, and the specific types of services they have provided to the VA and other agencies would be necessary. Understanding their performance on similar-sized or scope contracts would be particularly insightful for evaluating their capability to handle this $49.8 million award.

How does the awarded amount compare to similar VHA finance IT support contracts?

The awarded amount of $49.8 million for VHA Finance Product Line Development, Security, and Operations Support is a substantial investment. To benchmark this value, one would compare it to the total contract values and durations of similar IT support services contracts awarded by the VHA or other large federal health agencies over the past 3-5 years. Factors such as the specific services included (e.g., product development, security, operations), the contract type (e.g., T&M, FFP), and the number of bidders would be critical for a fair comparison. Without direct comparative data, it's difficult to definitively state if this represents excellent or fair value, but the scale suggests a significant scope of work.

What are the primary risks associated with this Time and Materials (T&M) contract type for the VA?

The primary risk with a Time and Materials (T&M) contract for the VA is the potential for cost overruns. Unlike fixed-price contracts, T&M contracts reimburse the contractor for the actual cost of labor hours and materials, plus a fixed fee or profit. If not managed diligently, this can lead to costs exceeding initial estimates. Key risks include scope creep, inefficient labor utilization by the contractor, and difficulty in accurately forecasting the total project cost upfront. Robust oversight, detailed task orders, and clear performance metrics are essential to mitigate these risks and ensure the VA receives good value.

How will the success of this contract be measured in terms of improving VHA's financial operations and security?

The success of this contract will likely be measured through a combination of performance metrics and deliverables outlined in the contract's Statement of Work (SOW). Key Performance Indicators (KPIs) could include metrics related to system uptime, response times for security incidents, successful implementation of new product features, reduction in financial processing errors, and adherence to security compliance standards (e.g., FISMA, NIST). Regular performance reviews, user satisfaction surveys within the VHA, and audits by the VA's program management office will be crucial for assessing the contractor's effectiveness in enhancing financial operations and security.

What is the historical spending trend for VHA Finance Product Line support over the last five years?

Analyzing historical spending for VHA Finance Product Line support over the last five years would provide crucial context for the current $49.8 million award. This would involve examining previous contracts, their values, durations, and the contractors involved. Trends might reveal increasing investments in IT modernization, shifts in focus towards security, or changes in the types of services procured. Understanding this trend can help determine if the current award represents a significant increase, a continuation of existing investment levels, or a strategic shift in VHA's approach to managing its financial product lines.

What specific security compliance standards must H2 Technology Group, LLC adhere to under this contract?

Under this contract, H2 Technology Group, LLC must adhere to a range of stringent security compliance standards relevant to federal health information systems. This typically includes, but is not limited to, the Federal Information Security Management Act (FISMA), the National Institute of Standards and Technology (NIST) Special Publications (such as the Cybersecurity Framework and SP 800-53 for security controls), and specific Health Insurance Portability and Accountability Act (HIPAA) requirements for protecting sensitive patient health information, even if indirectly related to financial operations. Compliance with VA-specific security directives and data handling policies will also be mandatory.

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 › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 8

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 101 LOWE AVE SE STE 3B, HUNTSVILLE, AL, 35801

Business Categories: Category Business, Limited Liability Corporation, Partnership or Limited Liability Partnership, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $247,183,012

Exercised Options: $49,778,164

Current Obligation: $49,778,164

Actual Outlays: $25,671,952

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 47QTCA24D008Y

IDV Type: FSS

Timeline