HHS awards $2.7M for Microsoft Azure cloud services through Dell Federal Systems BPA

Contract Overview

Contract Amount: $26,999,724 ($27.0M)

Contractor: Dell Federal Systems L.P

Awarding Agency: Department of Health and Human Services

Start Date: 2023-09-30

End Date: 2024-09-29

Contract Duration: 365 days

Daily Burn Rate: $74.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: HHS VMO BPA - MS AZURE CLOUD

Place of Performance

Location: ATLANTA, DEKALB County, GEORGIA, 30341

State: Georgia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $27.0 million to DELL FEDERAL SYSTEMS L.P for work described as: HHS VMO BPA - MS AZURE CLOUD Key points: 1. Contract leverages an existing Blanket Purchase Agreement (BPA) for efficient procurement. 2. Focus on cloud services indicates a trend towards modernizing government IT infrastructure. 3. The firm-fixed-price structure aims to provide cost certainty for the government. 4. Competition was full and open, suggesting a robust bidding process. 5. The contract duration of one year allows for flexibility and regular reassessment. 6. Spending is concentrated within the Centers for Disease Control and Prevention (CDC).

Value Assessment

Rating: good

The contract value of $2.7 million for one year of Microsoft Azure cloud services appears reasonable, especially considering it was awarded under an existing BPA. Benchmarking against similar cloud service contracts is challenging without specific service level agreements and usage metrics. However, the use of a competitive BPA call suggests that pricing was likely evaluated against market rates. The firm-fixed-price nature provides predictability, but it's important to monitor actual usage to ensure optimal value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded via a BPA call under a full and open competition. This indicates that multiple vendors had the opportunity to bid on the original BPA, and subsequent calls are likely open to all parties who were awarded spots on that BPA. The full and open nature generally promotes competitive pricing and allows the government to access a wide range of solutions.

Taxpayer Impact: A full and open competition ensures that taxpayers benefit from the most competitive pricing and innovative solutions available in the market, as multiple vendors vie for the contract.

Public Impact

The Centers for Disease Control and Prevention (CDC) will benefit from enhanced cloud computing capabilities. Services delivered will support critical public health initiatives and data management. The geographic impact is primarily within the operational scope of the CDC, likely nationwide. Workforce implications may include IT personnel managing and utilizing cloud resources.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with specific cloud platforms if not managed carefully.
Reliance on a single cloud provider could pose risks if service disruptions occur.

Positive Signals

Leverages an existing, competitively awarded BPA, indicating pre-vetted solutions and pricing.
Firm-fixed-price contract provides budget certainty for the specified period.
Full and open competition for the BPA likely resulted in favorable terms.

Sector Analysis

The contract falls within the Information Technology sector, specifically focusing on cloud computing services. The market for cloud services is highly competitive and rapidly evolving, with major players like Microsoft Azure, Amazon Web Services, and Google Cloud dominating. Government spending on cloud infrastructure has been steadily increasing as agencies seek to modernize their IT systems, improve scalability, and reduce operational costs. This contract represents a portion of that broader trend in federal IT modernization.

Small Business Impact

The provided data does not indicate any specific small business set-aside or subcontracting requirements for this particular BPA call. However, the original BPA under which this call was made may have had provisions for small business participation. Without further details on the BPA's structure, it's difficult to assess the direct impact on the small business ecosystem for this specific award.

Oversight & Accountability

Oversight for this contract would typically reside with the contracting officer and program managers within the Centers for Disease Control and Prevention (CDC). As it's a BPA call, the original BPA likely has established oversight mechanisms. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

HHS Cloud Computing Services
CDC IT Modernization Initiatives
Federal Data Center Consolidation Initiative
GSA Cloud Purchasing Programs

Risk Flags

Potential for cost overruns if usage exceeds contracted levels without proper monitoring.
Dependence on a single cloud provider introduces platform-specific risks.
Ensuring data security and compliance within the cloud environment requires continuous vigilance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $27.0 million to DELL FEDERAL SYSTEMS L.P. HHS VMO BPA - MS AZURE CLOUD

Who is the contractor on this award?

The obligated recipient is DELL FEDERAL SYSTEMS L.P.

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 $27.0 million.

What is the period of performance?

Start: 2023-09-30. End: 2024-09-29.

What is the track record of Dell Federal Systems L.P. in delivering similar cloud services to federal agencies?

Dell Federal Systems L.P. has a significant track record in providing IT hardware, software, and services to the federal government, including cloud solutions. They are a major government contractor with extensive experience supporting various agencies. Their ability to secure and fulfill large contracts, such as this BPA call for Microsoft Azure services, suggests a demonstrated capacity to meet federal requirements. Specific performance metrics for this contract would be available through internal agency performance reviews and potentially through contract data reporting systems, but their general standing as a large, established federal IT provider indicates a baseline level of capability and experience in this domain.

How does the awarded price compare to market rates for Microsoft Azure cloud services?

Directly comparing the awarded price of $2.7 million for one year of Microsoft Azure services to market rates is complex without granular details on the specific Azure services, usage tiers, and Service Level Agreements (SLAs) included. However, the contract was awarded under a Blanket Purchase Agreement (BPA) that underwent full and open competition. This suggests that the pricing was benchmarked against other competitive offerings at the time the BPA was established. Generally, government contracts, especially those competed broadly, aim to secure pricing at or below commercial list prices, often with volume discounts. The firm-fixed-price nature also implies that the government has locked in a specific cost for the defined scope, providing budget certainty.

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

Key risks include potential vendor lock-in with Microsoft Azure, service disruptions from the cloud provider, and ensuring cost-effectiveness based on actual usage. Vendor lock-in can be mitigated by maintaining multi-cloud strategies or ensuring clear exit strategies are defined. Service disruptions are a standard risk with any cloud service, managed through robust SLAs and disaster recovery planning by the provider, which should be stipulated in the contract. Cost-effectiveness is managed through the firm-fixed-price structure for the defined scope, but ongoing monitoring of usage against the contracted services is crucial to avoid overspending or underutilization. The use of a competitive BPA call also helps mitigate risks by ensuring a vetted provider and potentially competitive pricing.

How effective is the use of a BPA for procuring these types of cloud services?

Using a Blanket Purchase Agreement (BPA) for cloud services like Microsoft Azure is generally an effective procurement strategy for federal agencies. BPAs are established under existing indefinite-delivery, indefinite-quantity (IDIQ) contracts and allow for streamlined ordering of supplies or services. For cloud services, a BPA can provide pre-negotiated terms, conditions, and pricing, significantly reducing the time and effort required for individual task orders. When the BPA itself is competed full and open, it ensures a competitive foundation. Subsequent calls against the BPA can then be awarded quickly, facilitating rapid deployment of necessary IT resources while still allowing for competition among BPA holders, thus balancing speed with value.

What is the historical spending pattern for similar cloud services at the CDC or HHS?

Historical spending on cloud services by the CDC and HHS has been on an upward trajectory, mirroring the broader federal trend towards cloud adoption. Agencies are increasingly migrating workloads from on-premises data centers to cloud environments to gain scalability, flexibility, and potential cost savings. While specific historical figures for Microsoft Azure services procured by the CDC are not detailed here, overall IT spending within HHS, and particularly on cloud infrastructure and services, has seen significant investment over the past several years. This contract represents a continuation of that strategic investment in modernizing IT capabilities to support public health missions.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 75D301-23-Q-77282

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Francisco Partners Management, L.P.

Address: 1 DELL WAY, ROUND ROCK, TX, 78682

Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $26,999,724

Exercised Options: $26,999,724

Current Obligation: $26,999,724

Actual Outlays: $26,401,423

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 47QTCA22A0004

IDV Type: BPA

Timeline