New York City awarded $19.8M for data center services, with 3 bidders competing under full and open competition

Contract Overview

Contract Amount: $19,777,346 ($19.8M)

Contractor: City of NEW York Fire Department

Awarding Agency: Department of Health and Human Services

Start Date: 2022-09-29

End Date: 2027-02-28

Contract Duration: 1,613 days

Daily Burn Rate: $12.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: DATA CENTER 1 SERVICES TO THE WTCHP

Place of Performance

Location: BROOKLYN, KINGS County, NEW YORK, 11201

State: New York Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $19.8 million to CITY OF NEW YORK FIRE DEPARTMENT for work described as: DATA CENTER 1 SERVICES TO THE WTCHP Key points: 1. The contract value appears reasonable given the scope of data center services. 2. Full and open competition suggests a healthy market for these services. 3. The fixed-price contract type mitigates cost overrun risks. 4. The contract duration is substantial, indicating a long-term need. 5. The award to a city agency for federal services warrants further examination of the intergovernmental relationship. 6. The lack of small business set-aside may limit opportunities for smaller providers.

Value Assessment

Rating: good

Benchmarking data center service contracts is complex due to varying scopes and service levels. However, the $19.8 million award over approximately 4.5 years (from Sep 2022 to Feb 2027) suggests a moderate annual spend. The firm fixed-price structure provides cost certainty for the government. Without specific details on the services rendered (e.g., colocation, managed services, cloud integration), a precise value-for-money assessment is challenging, but the competitive nature of the award implies a fair market price was likely achieved.

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 a bid. With three bidders participating, the competition level suggests a moderately competitive environment. This level of competition is generally favorable for price discovery and can lead to better value for the government compared to sole-source or limited competition scenarios. The agency likely received multiple proposals to evaluate.

Taxpayer Impact: The full and open competition with multiple bidders is beneficial for taxpayers as it likely drove down prices through market forces, ensuring the government is not overpaying for essential data center services.

Public Impact

The primary beneficiary is the Centers for Disease Control and Prevention (CDC), which will receive essential data center services. These services are critical for the administration of public health programs, ensuring data integrity and accessibility. The geographic impact is centered in New York, where the services will be provided. The contract supports the operational infrastructure necessary for public health data management and analysis.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The specific nature of 'DATA CENTER 1 SERVICES' is broad and could encompass a wide range of critical infrastructure needs.
The duration of the contract (1613 days) is significant, requiring sustained performance and oversight.
The award to a city agency (NYC Fire Department) for federal services raises questions about the procurement vehicle and inter-agency agreements.

Positive Signals

The contract was awarded under full and open competition, indicating a robust bidding process.
The firm fixed-price contract type provides cost predictability and limits financial risk for the government.
The award was made by a reputable federal agency (HHS/CDC) suggesting a legitimate need for the services.

Sector Analysis

Data center services are a critical component of the IT infrastructure sector, supporting everything from cloud computing to data storage and processing. The market is highly competitive, with numerous providers ranging from large cloud hyperscalers to specialized colocation facilities. Federal spending in this area is substantial, driven by the need for secure, reliable, and scalable data management. This contract fits within the broader federal strategy to modernize IT infrastructure and ensure the continuity of essential government operations.

Small Business Impact

There is no indication of a small business set-aside for this contract, nor is there information on subcontracting plans. This suggests that the competition was open to all eligible businesses, potentially favoring larger, established providers. The absence of specific small business considerations might limit opportunities for smaller firms to participate in providing these critical IT services to the federal government.

Oversight & Accountability

Oversight for this contract would primarily fall under the Centers for Disease Control and Prevention (CDC) contracting officers and program managers. As a definitive contract, it is subject to standard federal procurement regulations and oversight. Transparency is facilitated by public contract databases, but detailed performance metrics and specific oversight mechanisms are not publicly available. The Inspector General for the Department of Health and Human Services would have jurisdiction in cases of fraud or mismanagement.

Related Government Programs

Federal Data Center Consolidation Initiative
Cloud Computing Services Contracts
IT Infrastructure Modernization Programs
Public Health Data Management Systems

Risk Flags

Unusual awardee type (municipal agency for federal IT services)
Lack of detailed service description
Potential misalignment with data center consolidation goals

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $19.8 million to CITY OF NEW YORK FIRE DEPARTMENT. DATA CENTER 1 SERVICES TO THE WTCHP

Who is the contractor on this award?

The obligated recipient is CITY OF NEW YORK FIRE DEPARTMENT.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Disease Control and Prevention).

What is the total obligated amount?

The obligated amount is $19.8 million.

What is the period of performance?

Start: 2022-09-29. End: 2027-02-28.

What specific data center services are being provided under this contract?

The provided data is limited and only specifies 'DATA CENTER 1 SERVICES'. This broad description does not detail whether the services include colocation, managed hosting, cloud infrastructure, disaster recovery, or other specialized data center functions. Understanding the precise nature of these services is crucial for a comprehensive assessment of the contract's value, performance, and alignment with the CDC's mission. Further inquiry would be needed to obtain a detailed Statement of Work (SOW) or service level agreement (SLA) associated with this definitive contract.

How does the pricing compare to similar federal data center contracts?

A direct comparison of pricing is difficult without knowing the exact services rendered and their scope. The total award of $19.8 million over approximately 4.5 years translates to an average annual cost of roughly $4.4 million. This figure needs to be contextualized by the specific service level agreements, capacity, security requirements, and geographic location. Federal contracts for data center services can vary widely in price based on these factors. The competitive nature of this award suggests the price is likely aligned with market rates for comparable services, but a detailed benchmark would require access to more granular service details and pricing structures.

What is the track record of the City of New York Fire Department in providing federal IT services?

The City of New York Fire Department (FDNY) is primarily a municipal emergency response agency. Its involvement in providing federal IT services, specifically data center services for the CDC, is unusual. Typically, federal agencies procure such services directly from commercial vendors or through other federal entities with established IT service capabilities. This award suggests a potential intergovernmental agreement or a specific procurement mechanism that allowed a city agency to act as a service provider. The FDNY's track record in managing large-scale federal IT infrastructure contracts is likely limited or non-existent, raising questions about their capacity and experience in this domain compared to specialized IT service providers.

What are the potential risks associated with awarding data center services to a municipal agency?

Several risks could be associated with awarding federal data center services to a municipal agency like the FDNY. These include potential gaps in specialized IT expertise, less agile response times compared to commercial providers, and challenges in meeting stringent federal security and compliance standards (e.g., FedRAMP). Furthermore, the procurement process itself might be less optimized for IT services compared to commercial IT vendors. Ensuring adequate oversight and performance management will be critical. The long-term sustainability and scalability of services provided by a non-IT-focused municipal agency also warrant consideration.

How does this contract align with federal initiatives like the Data Center Consolidation Initiative?

The award of this contract, while providing necessary data center services, needs to be viewed in the context of federal IT modernization efforts. Initiatives like the Data Center Consolidation Initiative (DCCI) aim to reduce the number of federal data centers and transition services to more efficient models, such as cloud computing. If 'DATA CENTER 1 SERVICES' represents a new or expanded facility, it might run counter to consolidation goals unless it's part of a strategic regional hub or a highly specialized requirement not met by cloud solutions. Conversely, if it supports consolidation by centralizing specific functions, it could align. The specific nature of the services and the CDC's overall IT strategy would determine its alignment.

Industry Classification

NAICS: Public Administration › Administration of Human Resource Programs › Administration of Public Health Programs

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 75D301-22-R-72244

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 9 METROTECH CTR, BROOKLYN, NY, 11201

Business Categories: Category Business, Government, U.S. Local Government, U.S. National Government, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $19,777,346

Exercised Options: $19,777,346

Current Obligation: $19,777,346

Actual Outlays: $11,931,428

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: YES

Timeline