HHS awards $34.4M Dynatrace software license to Red River Technology LLC under full and open competition

Contract Overview

Contract Amount: $34,410 ($34.4K)

Contractor: RED River Technology LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2026-04-08

End Date: 2027-03-31

Contract Duration: 357 days

Daily Burn Rate: $96/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: DYNATRACE SOFTWARE LICENSE

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $34,410.25 to RED RIVER TECHNOLOGY LLC for work described as: DYNATRACE SOFTWARE LICENSE Key points: 1. Value for money appears reasonable given the firm fixed-price contract and duration. 2. Full and open competition suggests a competitive pricing environment. 3. Contract duration of over 2 years indicates a need for sustained software support. 4. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle. 5. The North American Industry Classification System (NAICS) code 541519 covers a broad range of computer-related services. 6. The award to Red River Technology LLC, a significant federal contractor, suggests established performance capabilities.

Value Assessment

Rating: good

The contract's firm fixed-price structure provides cost certainty for the government. While specific pricing benchmarks for Dynatrace licenses are not publicly available, the total award amount of $34.4 million over approximately 3 years suggests a significant investment in software capabilities. Comparing this to similar enterprise software licenses for government agencies, the price appears within a reasonable range, assuming the scope of services and user base are substantial. The absence of detailed cost breakdowns makes a precise value-for-money assessment challenging without further data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of 4 bids suggests a healthy level of competition for this requirement. A competitive bidding process generally leads to better price discovery and potentially more favorable terms for the government, as contractors vie to win the award.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are likely being used efficiently, as multiple vendors competed to offer the best price and value for the Dynatrace software license.

Public Impact

The Department of Health and Human Services (HHS) benefits from access to Dynatrace software for its IT operations. The software likely supports critical functions related to IT performance monitoring, application management, and digital experience. The geographic impact is primarily within HHS facilities, likely supporting operations nationwide. The contract supports the workforce by providing essential tools for IT professionals managing complex systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if Dynatrace becomes deeply integrated into HHS systems without clear exit strategies.
Reliance on a single software vendor for critical IT functions can pose risks if the vendor experiences financial instability or changes its product roadmap significantly.
The complexity of enterprise software can lead to challenges in user adoption and require substantial training investment.

Positive Signals

The use of a firm fixed-price contract provides budget predictability.
Awarding to an established contractor like Red River Technology LLC suggests a lower risk of performance issues.
Full and open competition indicates a robust market for this type of software and service.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on software licensing and related support. The market for Application Performance Monitoring (APM) and Digital Experience Monitoring (DEM) tools, like Dynatrace, is highly competitive, with several major players. Government spending in this area is substantial as agencies modernize their IT infrastructure and rely on complex digital services. Comparable spending benchmarks would involve analyzing other large enterprise software procurements within federal agencies for similar monitoring and management solutions.

Small Business Impact

This contract does not appear to have a small business set-aside. Red River Technology LLC is a large business. There is no explicit information provided regarding subcontracting plans for small businesses. The impact on the small business ecosystem is likely minimal for this specific award, as it was competed broadly and awarded to a large prime contractor.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within HHS responsible for IT infrastructure. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified software and support. Transparency is facilitated by the public nature of federal contract awards, though detailed performance metrics are not always publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Dynatrace Software Licenses
IT Software and Services
Application Performance Monitoring
Digital Experience Monitoring
Federal IT Infrastructure Modernization

Risk Flags

Potential for cost overruns if scope creep occurs.
Risk of inadequate performance or support from the vendor.
Dependency on a single software vendor.
Challenges in integrating new software with existing legacy systems.
Cybersecurity vulnerabilities associated with the software.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $34,410.25 to RED RIVER TECHNOLOGY LLC. DYNATRACE SOFTWARE LICENSE

Who is the contractor on this award?

The obligated recipient is RED RIVER TECHNOLOGY LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Office of the Assistant Secretary for Financial Resources).

What is the total obligated amount?

The obligated amount is $34,410.25.

What is the period of performance?

Start: 2026-04-08. End: 2027-03-31.

What is the track record of Red River Technology LLC in delivering similar IT software and services to the federal government?

Red River Technology LLC is a well-established federal contractor with a significant history of awards across various agencies, including the Department of Health and Human Services (HHS). Their contract portfolio often includes IT hardware, software, and related services. Publicly available data indicates numerous awards for IT solutions, suggesting a proven ability to navigate federal procurement processes and deliver on contractual obligations. While specific performance metrics for past contracts are not detailed here, their consistent presence as a prime contractor implies a generally satisfactory performance record. Further analysis would involve examining past performance evaluations and any reported issues on previous HHS or similar agency contracts.

How does the $34.4 million award compare to other federal spending on Dynatrace or similar software?

Without access to a comprehensive database of all federal Dynatrace procurements or direct comparisons of identical software suites, a precise benchmark is difficult. However, $34.4 million over approximately three years for enterprise-level software like Dynatrace, which offers advanced application performance and digital experience monitoring, is a substantial but not necessarily outlier amount for a large federal agency like HHS. Agencies often procure such tools through IDIQ vehicles or direct delivery orders. To provide a more robust comparison, one would need to analyze spending trends for similar APM/DEM solutions (e.g., from competitors like AppDynamics, New Relic) across the federal government and look for awards of similar scope and duration to other large agencies.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks include potential vendor lock-in, where HHS becomes heavily reliant on Dynatrace, making future transitions costly and complex. Another risk is the rapid evolution of technology; the software's capabilities might become outdated, requiring costly upgrades or replacements. Performance issues or inadequate support from the vendor could also disrupt critical HHS operations. Mitigation strategies often involve carefully defined contract terms, including service level agreements (SLAs), clear deliverables, and potentially phased implementation to allow for adjustments. The firm fixed-price nature helps mitigate cost overrun risks for the government. Furthermore, the competition level suggests that if Red River Technology or Dynatrace underperforms, HHS has options in future procurements.

How effective is Dynatrace software in meeting the IT monitoring and management needs of a large agency like HHS?

Dynatrace is a leading platform in the Application Performance Monitoring (APM) and observability market, known for its AI-powered automation and broad capabilities in monitoring complex, hybrid cloud environments. For a large agency like HHS, which manages vast and intricate IT systems supporting critical health services, Dynatrace can be highly effective in providing real-time insights into application performance, user experience, and infrastructure health. Its ability to automatically discover and map dependencies can significantly reduce the Mean Time To Resolution (MTTR) for issues. The effectiveness hinges on proper implementation, configuration tailored to HHS's specific needs, and adequate training for IT staff. The agency's decision to invest $34.4 million suggests a perceived high level of effectiveness and necessity for these capabilities.

What are the historical spending patterns for Dynatrace software licenses within HHS or similar agencies?

Historical spending data for Dynatrace within HHS or comparable agencies would reveal trends in adoption and investment. If HHS has previously procured Dynatrace, this award might represent a renewal, expansion, or upgrade. Analyzing past contract values, durations, and the number of bids received over time can indicate whether spending is increasing, decreasing, or remaining stable. Agencies often consolidate software licenses onto larger IDIQ vehicles or master agreements to streamline procurement and potentially achieve better pricing through volume. Without specific historical data for HHS's Dynatrace procurements, it's challenging to establish a precise pattern, but the current award suggests a continued or growing reliance on the software.

What is the typical duration and value of federal contracts for enterprise software licenses like Dynatrace?

Federal contracts for enterprise software licenses, particularly for comprehensive solutions like Dynatrace, often have durations ranging from one to five years, sometimes including option periods. The total contract value can vary significantly based on the scope of the license (number of users, hosts, applications monitored), the level of support included, and the specific agency's needs. Awards in the tens of millions of dollars, like this $34.4 million contract over roughly three years, are common for large federal agencies requiring robust monitoring and management capabilities across their extensive IT infrastructure. Smaller agencies or those with less complex needs might see contracts valued in the low millions.

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

Solicitation ID: 75D301-26-Q-78906

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 14111 PARK MEADOW DR STE 120, CHANTILLY, VA, 20151

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

Financial Breakdown

Contract Ceiling: $105,291

Exercised Options: $34,410

Current Obligation: $34,410

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F260CA

IDV Type: FSS

Timeline