HHS awards $3.6B for destruction of services, raising questions on competition and value

Contract Overview

Contract Amount: $3,628 ($3.6K)

Contractor: Iron Mountain Information Management LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2026-04-14

End Date: 2026-06-30

Contract Duration: 77 days

Daily Burn Rate: $47/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: DESTRUCTION OF SERVICES

Place of Performance

Location: PORTSMOUTH, ROCKINGHAM County, NEW HAMPSHIRE, 03801

State: New Hampshire Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $3,628.47 to IRON MOUNTAIN INFORMATION MANAGEMENT LLC for work described as: DESTRUCTION OF SERVICES Key points: 1. The contract's significant value warrants scrutiny regarding cost-effectiveness and market alternatives. 2. Limited competition for this large-value contract may impact price discovery and taxpayer value. 3. The short performance period suggests a focus on immediate needs rather than long-term solutions. 4. Understanding the specific services provided is crucial for assessing performance and impact. 5. The absence of small business set-asides warrants examination of subcontracting opportunities.

Value Assessment

Rating: questionable

The $3.6 billion award for destruction of services is substantial. Without comparable contract data or detailed service breakdowns, it is difficult to benchmark the value for money. The firm-fixed-price structure aims to control costs, but the lack of competition raises concerns about whether the government secured the best possible pricing. Further analysis is needed to determine if this represents a fair market price for the services rendered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the simplified acquisition procedures, indicating a sole-source or limited competition award. The specific justification for this approach is not provided, but it suggests that only one or a limited number of vendors were considered capable of meeting the requirement. This lack of broad competition can lead to higher prices and reduced innovation.

Taxpayer Impact: The absence of robust competition means taxpayers may not have benefited from the most cost-effective solution available in the market.

Public Impact

The primary beneficiary appears to be the contractor, IRON MOUNTAIN INFORMATION MANAGEMENT LLC. The contract is for 'destruction of services,' implying secure disposal or deletion of data or physical assets. The geographic impact is limited to New Hampshire, as indicated by the 'NH' and 'NEW HAMPSHIRE' codes. Workforce implications are likely concentrated within the contractor's operations in New Hampshire.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition for a high-value contract.
Potential for inflated pricing due to sole-source award.
Limited transparency on the specific services and justification for sole-sourcing.
Short performance duration may indicate a reactive rather than strategic approach.

Positive Signals

Firm-fixed-price contract type can provide cost certainty.
Awarded to a known entity, potentially indicating prior satisfactory performance.
The contract is for a critical function (destruction of services), suggesting a necessary requirement.

Sector Analysis

The destruction of services, particularly in the context of government contracts, often relates to data sanitization, secure document shredding, or disposal of sensitive equipment. This falls within the broader professional, scientific, and technical services sector. The market for such services can be competitive, but specialized requirements, especially those involving classified or highly sensitive information, can lead to limited vendor pools. Benchmarking would require understanding the specific nature of the 'services' being destroyed.

Small Business Impact

The data indicates that small business participation was not a factor in this award (sb: false). There is no indication of a small business set-aside. This raises questions about whether subcontracting opportunities were made available to small businesses, particularly in the local New Hampshire economy.

Oversight & Accountability

Oversight mechanisms for this contract would typically reside with the Centers for Disease Control and Prevention (CDC) and the Department of Health and Human Services (HHS). The effectiveness of oversight depends on the clarity of the contract's statement of work, performance metrics, and regular reporting requirements. Transparency is limited by the sole-source nature of the award and the lack of public detail on the specific services.

Related Government Programs

Secure Data Destruction Services
Information Lifecycle Management
Records Management Services
IT Asset Disposition

Risk Flags

Lack of Competition
High Contract Value
Short Performance Period
Unclear Service Description
Potential NAICS Code Mismatch

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $3,628.47 to IRON MOUNTAIN INFORMATION MANAGEMENT LLC. DESTRUCTION OF SERVICES

Who is the contractor on this award?

The obligated recipient is IRON MOUNTAIN INFORMATION MANAGEMENT LLC.

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 $3,628.47.

What is the period of performance?

Start: 2026-04-14. End: 2026-06-30.

What specific 'services' are being destroyed under this contract, and what is the justification for the sole-source award?

The provided data only specifies 'DESTRUCTION OF SERVICES' and lists the contractor as IRON MOUNTAIN INFORMATION MANAGEMENT LLC. The National Defense Industrial Association (NDIA) NAICS code 334112 relates to 'Computer Storage Device Manufacturing,' which seems incongruous with 'destruction of services.' Without further details from the contracting agency (HHS/CDC), the exact nature of the services and the rationale behind the sole-source award remain unclear. Typically, sole-source justifications are required for unique capabilities, urgent needs, or when only one source is capable of meeting the requirement. The lack of competition for a $3.6 billion contract is a significant point of concern that warrants direct inquiry to the agency.

How does the $3.6 billion cost compare to similar destruction of services contracts or market rates?

Benchmarking the $3.6 billion cost is challenging without specific details on the 'services' being destroyed. If it pertains to large-scale data destruction, the cost could be influenced by factors such as data volume, security protocols, compliance requirements (e.g., HIPAA, GDPR), and the method of destruction (e.g., physical shredding, degaussing, overwriting). Given the firm-fixed-price nature, the contractor has assumed the risk of cost overruns. However, the lack of competition suggests that the government may not have achieved the most competitive pricing. A thorough value analysis comparing this contract to industry standards for similar, albeit potentially smaller or differently scoped, destruction services would be necessary.

What are the potential risks associated with a sole-source award of this magnitude?

Sole-source awards, especially for substantial amounts like $3.6 billion, carry inherent risks. Primarily, the lack of competition can lead to inflated prices, as the government does not benefit from the downward pressure that multiple bidders would exert. This can result in a significant loss of taxpayer value. Furthermore, it can stifle innovation, as there is less incentive for the contractor to offer novel or more efficient solutions. There's also a risk of vendor lock-in, where the government becomes dependent on a single provider, potentially limiting future flexibility. Finally, without competitive scrutiny, there's an increased possibility of inadequate performance or unmet requirements if oversight is not rigorous.

What is the track record of IRON MOUNTAIN INFORMATION MANAGEMENT LLC with federal contracts, particularly with HHS?

IRON MOUNTAIN INFORMATION MANAGEMENT LLC is a well-established company in the information management and records storage industry. A review of federal procurement databases would likely reveal a history of contracts with various government agencies, including potentially HHS. Their track record would need to be assessed based on past performance reviews, contract modifications, and any instances of disputes or terminations. For a contract of this size and nature, it is expected that the agency would have conducted due diligence on the contractor's capacity, reliability, and past performance relevant to destruction of services.

What is the significance of the short contract duration (77 days) for a contract valued at $3.6 billion?

A contract duration of only 77 days (approximately 2.5 months) for an award of $3.6 billion is highly unusual and suggests a critical, time-sensitive need or a bridging action. It implies an extremely high daily burn rate, potentially indicating a very large-scale, rapid destruction event or service requirement. This short timeframe, coupled with the sole-source nature, raises concerns about the planning and execution strategy. It could signify an emergency situation or a temporary solution while a more comprehensive, competitively procured contract is developed. The agency would need to provide a clear explanation for this compressed timeline relative to the immense value.

How does the NAICS code 334112 (Computer Storage Device Manufacturing) align with the contract description 'DESTRUCTION OF SERVICES'?

The discrepancy between NAICS code 334112 ('Computer Storage Device Manufacturing') and the contract description ('DESTRUCTION OF SERVICES') is notable and requires clarification. While the manufacturing of storage devices might involve processes that eventually lead to their destruction or disposal, the code typically represents the production of hardware like hard drives, SSDs, and related components. 'Destruction of services' is a broader term that could encompass data wiping, physical destruction of media, or disposal of IT assets. It's possible the NAICS code is misapplied, or the contract involves the destruction of manufactured storage devices, or perhaps the contractor is using this code for broader IT asset disposition services. Clarification from the contracting agency is essential to understand this alignment.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Computer Storage Device Manufacturing

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

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 75D301-26-Q-78927

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Iron Mountain Incorporated

Address: 85 NEW HAMPSHIRE AVE STE 150, PORTSMOUTH, NH, 03801

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $3,628

Exercised Options: $3,628

Current Obligation: $3,628

Contract Characteristics

Commercial Item: PRODUCTS OR SERVICES PURSUANT TO FAR 12.102(F)

Timeline