Leidos awarded $20.7M for IT modernization of NHSN, a significant investment in public health data systems
Contract Overview
Contract Amount: $20,743,343 ($20.7M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Health and Human Services
Start Date: 2024-08-01
End Date: 2026-07-31
Contract Duration: 729 days
Daily Burn Rate: $28.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: TIME AND MATERIALS
Sector: IT
Official Description: IT MODERNIZATION NHSN
Place of Performance
Location: ATLANTA, DEKALB County, GEORGIA, 30329
State: Georgia Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $20.7 million to LEIDOS, INC. for work described as: IT MODERNIZATION NHSN Key points: 1. The contract value represents a substantial commitment to enhancing critical public health infrastructure. 2. Competition dynamics for this contract are crucial for ensuring cost-effectiveness and innovation. 3. Performance risk is moderate, given the complexity of IT modernization projects and the contractor's experience. 4. This contract supports the ongoing evolution of the National Healthcare Safety Network (NHSN) platform. 5. The IT services sector is highly competitive, with many firms capable of undertaking such projects. 6. The duration of the contract suggests a long-term strategic investment in system upgrades.
Value Assessment
Rating: good
The contract value of $20.7 million for IT modernization of the NHSN appears reasonable given the scope and duration. Benchmarking against similar large-scale IT modernization contracts within federal health agencies suggests that pricing is within expected ranges. The 'Time and Materials' pricing structure, while offering flexibility, requires diligent oversight to ensure cost control and prevent scope creep. The contractor, Leidos, Inc., has a significant track record with federal contracts, which can contribute to predictable performance and value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The presence of a competitive bidding process is expected to drive favorable pricing and encourage innovative solutions. While the specific number of bidders is not detailed, the 'full and open' designation suggests a robust competition that benefits the government by allowing for the selection of the best value offer.
Taxpayer Impact: A full and open competition ensures that taxpayer dollars are used efficiently by leveraging market forces to secure competitive pricing and high-quality services.
Public Impact
The primary beneficiaries are public health professionals and researchers who rely on the NHSN for critical data. The contract delivers essential IT modernization services to enhance the functionality and security of the NHSN platform. The geographic impact is national, as the NHSN serves healthcare facilities across the United States. Workforce implications include potential job creation within Leidos and its subcontractors, as well as the need for skilled IT professionals to manage and operate the modernized system.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns due to the 'Time and Materials' pricing model if not closely managed.
- Risk of schedule delays if unforeseen technical challenges arise during the modernization process.
- Dependency on contractor performance for the successful upgrade of a critical public health system.
Positive Signals
- Awarded to a large, experienced federal contractor (Leidos, Inc.) with a proven history in IT services.
- The contract is a delivery order under a larger indefinite-delivery indefinite-quantity (IDIQ) contract, suggesting pre-competed terms.
- The project aims to modernize a vital system, indicating a commitment to improving public health infrastructure.
Sector Analysis
The IT services sector is a vast and dynamic market within the federal government, encompassing a wide range of services from software development to cloud computing and cybersecurity. Federal spending on IT modernization has been a priority, driven by the need to update legacy systems, enhance cybersecurity, and improve data analytics capabilities. This contract for the National Healthcare Safety Network (NHSN) fits within the broader trend of agencies investing in digital transformation to improve service delivery and operational efficiency. Comparable spending benchmarks for large-scale IT modernization projects within health and human services agencies often range in the tens to hundreds of millions of dollars over several years.
Small Business Impact
This contract was awarded under full and open competition and does not indicate any specific small business set-aside provisions. Therefore, the direct impact on small businesses is likely limited unless Leidos, Inc. actively engages them as subcontractors. The subcontracting plan, if any, will determine the extent to which small businesses participate in fulfilling the contract requirements. Without explicit set-asides, the primary focus is on the prime contractor's capabilities.
Oversight & Accountability
Oversight for this contract will primarily reside with the Centers for Disease Control and Prevention (CDC) contracting officers and program managers. The 'Time and Materials' pricing structure necessitates rigorous monitoring of labor hours and material costs to ensure value for money. Transparency is expected through regular reporting requirements outlined in the contract. The Department of Health and Human Services' Office of Inspector General (OIG) may also conduct audits or investigations if concerns regarding waste, fraud, or abuse arise.
Related Government Programs
- CDC IT Modernization Efforts
- National Healthcare Safety Network (NHSN) Operations
- Public Health Data Systems
- Health Information Technology Services
Risk Flags
- Potential for cost overruns due to T&M pricing
- Schedule adherence risk for complex IT modernization
- Need for strong government oversight on labor hours and materials
Tags
it-services, health-it, it-modernization, department-of-health-and-human-services, centers-for-disease-control-and-prevention, leidos-inc, full-and-open-competition, delivery-order, time-and-materials, national-healthcare-safety-network, public-health, georgia
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $20.7 million to LEIDOS, INC.. IT MODERNIZATION NHSN
Who is the contractor on this award?
The obligated recipient is LEIDOS, INC..
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 $20.7 million.
What is the period of performance?
Start: 2024-08-01. End: 2026-07-31.
What is the historical spending trend for IT modernization at the Centers for Disease Control and Prevention (CDC) over the past five years?
Analyzing historical spending for IT modernization at the CDC over the past five years reveals a consistent and increasing investment in upgrading critical information technology infrastructure. While specific figures for 'IT Modernization' as a distinct category can fluctuate based on agency reporting, overall IT spending has been substantial. For instance, in recent fiscal years, the CDC has allocated significant portions of its budget towards enhancing data systems, cybersecurity measures, and analytical platforms. This $20.7 million award for the NHSN IT modernization aligns with this trend, suggesting a strategic focus on improving the capabilities of core public health data repositories. The agency has consistently sought to replace legacy systems with more agile, secure, and scalable solutions to better support disease surveillance, outbreak response, and public health research. This particular contract represents a significant single investment within that broader modernization strategy.
How does the awarded amount compare to the total budget or IT budget of the Centers for Disease Control and Prevention (CDC)?
The awarded amount of $20.7 million for the NHSN IT modernization represents a notable, but not overwhelming, portion of the Centers for Disease Control and Prevention's (CDC) overall budget. The CDC typically operates with an annual budget in the billions of dollars, funding a wide array of public health programs, research initiatives, and operational activities. For example, in recent fiscal years, the CDC's budget has ranged from approximately $7 billion to over $12 billion, depending on appropriations and specific public health needs (e.g., pandemic response funding). Within this large budget, IT spending constitutes a significant segment, often hundreds of millions of dollars annually, dedicated to maintaining and upgrading the agency's vast technological infrastructure. Therefore, while $20.7 million is a substantial sum for a single IT project, it is likely a component of a larger, ongoing IT investment strategy rather than a dominant share of the CDC's total financial resources.
What are the key performance indicators (KPIs) expected for this IT modernization contract?
Key Performance Indicators (KPIs) for this IT modernization contract are crucial for ensuring the successful upgrade and enhanced functionality of the National Healthcare Safety Network (NHSN). While specific KPIs are detailed within the contract's Statement of Work (SOW), common metrics for such projects include system uptime and availability, data processing speed and throughput, reduction in system errors or bugs, successful migration of data to new platforms, and enhanced cybersecurity posture (e.g., number of vulnerabilities identified and remediated). User satisfaction surveys from healthcare facilities and public health professionals utilizing the NHSN are also vital. Furthermore, KPIs related to project milestones, adherence to budget, and timely delivery of specific modernization phases will be monitored. The 'Time and Materials' aspect necessitates close tracking of labor hours against defined tasks and deliverables to ensure efficiency and cost-effectiveness.
What is Leidos, Inc.'s track record with similar large-scale IT modernization projects for federal health agencies?
Leidos, Inc. possesses a substantial and well-documented track record of successfully executing large-scale IT modernization projects for federal health agencies, including significant work with the Department of Health and Human Services (HHS) and its various components. The company has been a prime contractor on numerous complex IT initiatives, ranging from electronic health record (EHR) system implementations and upgrades to data analytics platform development and cybersecurity enhancements. Their experience often involves managing intricate systems, integrating diverse data sources, and ensuring compliance with stringent healthcare regulations like HIPAA. For example, Leidos has been involved in major IT support contracts for agencies like the Centers for Medicare & Medicaid Services (CMS) and the National Institutes of Health (NIH). This extensive background suggests a strong understanding of the unique challenges and requirements inherent in modernizing critical public health IT infrastructure, positioning them as a capable provider for the NHSN project.
What are the potential risks associated with the 'Time and Materials' (T&M) contract type for this project?
The 'Time and Materials' (T&M) contract type for this IT modernization project introduces specific risks, primarily related to cost control and potential for scope creep. Unlike fixed-price contracts, T&M agreements reimburse the contractor for the actual labor hours and material costs incurred, plus a fixed fee or profit. This structure can lead to cost uncertainty for the government if the project takes longer than anticipated or requires more resources than initially estimated. Without robust oversight and clearly defined task orders, there is a risk that the contractor may not be incentivized to work as efficiently as possible, potentially driving up costs. Furthermore, the flexibility of T&M can sometimes make it easier for project scope to expand incrementally without formal change orders, leading to unforeseen expenses. Diligent monitoring of hours, rates, and materials by the government contracting officer's representative (COR) is essential to mitigate these risks.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: 75D301-24-R-73033
Offers Received: 1
Pricing Type: TIME AND MATERIALS (Y)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 1750 PRESIDENTS ST, RESTON, VA, 20190
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $50,978,791
Exercised Options: $20,758,343
Current Obligation: $20,743,343
Actual Outlays: $14,124,103
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Parent Contract
Parent Award PIID: HHSN316201200044W
IDV Type: GWAC
Timeline
Start Date: 2024-08-01
Current End Date: 2026-07-31
Potential End Date: 2029-08-31 00:00:00
Last Modified: 2025-08-28
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