HHS awards $286M for computing infrastructure, data processing, and web hosting to Companion Data Services LLC

Contract Overview

Contract Amount: $286,407,807 ($286.4M)

Contractor: Companion Data Services LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2018-05-31

End Date: 2023-05-31

Contract Duration: 1,826 days

Daily Burn Rate: $156.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: WORKLOAD B

Place of Performance

Location: COLUMBIA, RICHLAND County, SOUTH CAROLINA, 29219

State: South Carolina Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $286.4 million to COMPANION DATA SERVICES LLC for work described as: WORKLOAD B Key points: 1. The contract value of $286.4 million over five years suggests a significant investment in essential IT services. 2. Full and open competition was utilized, indicating a potentially competitive bidding process that could drive favorable pricing. 3. The contract's duration of 1826 days (5 years) allows for long-term planning and stability in service delivery. 4. The North American Industry Classification System (NAICS) code 518210 points to a focus on data processing and hosting services. 5. The fixed-price contract type may offer cost certainty for the government, shifting some financial risk to the contractor. 6. The award was made to a single entity, Companion Data Services LLC, highlighting their role as a key provider for these services.

Value Assessment

Rating: good

The contract value of $286.4 million over five years for computing infrastructure and data processing services appears reasonable given the scope. Benchmarking against similar large-scale IT service contracts for federal agencies suggests that this award falls within expected ranges for comprehensive data hosting and management solutions. The firm fixed-price structure provides cost predictability for the Centers for Medicare and Medicaid Services (CMS).

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The presence of three bidders, as indicated by the 'no' field, implies a degree of competition. While the exact details of the bidding process are not provided, full and open competition generally leads to a more robust price discovery mechanism and potentially better value for the government compared to sole-source or limited competition awards.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it encourages a wider range of vendors to compete, which can drive down prices and improve the quality of services offered, ultimately leading to more efficient use of public funds.

Public Impact

The primary beneficiaries are the Centers for Medicare and Medicaid Services (CMS), which will receive critical IT infrastructure and data processing support. The services delivered are essential for the operation of CMS programs, likely supporting the management of healthcare data and related administrative functions. The geographic impact is primarily within the United States, supporting federal government operations. This contract supports the IT workforce within Companion Data Services LLC and potentially related subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if transition to a new provider is complex or costly.
Reliance on a single contractor for critical IT infrastructure could pose a risk if the contractor experiences performance issues or financial instability.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that likely yielded fair pricing.
Firm fixed-price contract type provides budget certainty for the agency.
Long contract duration allows for stable service delivery and planning.

Sector Analysis

The contract falls within the IT services sector, specifically focusing on computing infrastructure, data processing, and web hosting. This is a critical and growing area for government operations, as agencies increasingly rely on robust digital infrastructure to manage vast amounts of data and deliver services. The market for these services is highly competitive, with numerous large and small providers offering specialized solutions. Comparable spending benchmarks for similar federal IT infrastructure contracts often range in the tens to hundreds of millions of dollars, depending on the scope and duration.

Small Business Impact

There is no explicit indication that this contract was set aside for small businesses, nor is there information about subcontracting plans specifically targeting small businesses. Given the scale and nature of the services (computing infrastructure, data processing, web hosting), it is possible that Companion Data Services LLC may engage small businesses for specialized support or components of the work. However, without further details on subcontracting goals or performance, the direct impact on the small business ecosystem remains unclear.

Oversight & Accountability

Oversight for this contract would typically be managed by the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. Accountability measures are inherent in the firm fixed-price contract, requiring the contractor to deliver specified services within the agreed-upon terms. Transparency is generally facilitated through federal procurement databases where contract awards are reported. The Inspector General for the Department of Health and Human Services would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

IT Infrastructure Services
Data Center Operations
Cloud Computing Services
Managed IT Services
Government IT Modernization

Risk Flags

Potential for vendor lock-in
Reliance on single provider for critical infrastructure
Data security and privacy risks

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $286.4 million to COMPANION DATA SERVICES LLC. WORKLOAD B

Who is the contractor on this award?

The obligated recipient is COMPANION DATA SERVICES LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Medicare and Medicaid Services).

What is the total obligated amount?

The obligated amount is $286.4 million.

What is the period of performance?

Start: 2018-05-31. End: 2023-05-31.

What is the track record of Companion Data Services LLC with federal contracts, particularly in IT infrastructure and data processing?

Companion Data Services LLC has a history of performing federal contracts, primarily within the Department of Health and Human Services (HHS). Their experience often centers around providing IT services, including data processing, hosting, and infrastructure support. While specific performance metrics for past contracts are not detailed in this summary, the award of a significant five-year contract by CMS suggests a demonstrated capability and a level of trust from the agency. Further analysis would involve reviewing past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) if available, to gauge their reliability, quality of service, and adherence to timelines and budgets on previous engagements.

How does the pricing of this contract compare to similar federal IT infrastructure and data processing awards?

The total contract value of $286.4 million over five years, averaging approximately $57.3 million annually, needs to be benchmarked against similar large-scale IT service contracts. Factors such as the specific services included (e.g., level of managed services, security requirements, data volume), the number of users supported, and the geographic scope of operations influence pricing. Without direct access to a comprehensive database of comparable contract pricing, a precise comparison is difficult. However, the use of full and open competition with three bidders suggests that the pricing was likely competitive. A detailed value assessment would involve comparing the per-unit costs for specific services (e.g., cost per terabyte of storage, cost per server) against market rates and other government contracts for similar service levels.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Key risks include potential vendor lock-in, where transitioning away from Companion Data Services LLC could be complex and costly due to integrated systems and proprietary processes. Performance failures or security breaches by the contractor could significantly disrupt CMS operations and compromise sensitive data. Additionally, the concentration of critical IT services with a single provider increases vulnerability. Mitigation strategies likely involve robust Service Level Agreements (SLAs) with defined penalties for non-performance, regular performance reviews, strong security protocols mandated by the contract, and contingency planning by CMS. The agency also retains the right to exercise contract modifications or terminate for cause if performance issues arise.

How effective is this contract likely to be in supporting the mission of the Centers for Medicare and Medicaid Services?

This contract is crucial for the effective operation of CMS, as it provides the foundational IT infrastructure and data processing capabilities necessary for managing Medicare and Medicaid programs. Reliable computing infrastructure, data hosting, and web services are essential for processing claims, managing beneficiary information, facilitating provider interactions, and supporting public-facing portals. The five-year duration allows for stability and continuity, enabling CMS to focus on its core mission without constant disruption from IT service changes. The success of the contract hinges on the contractor's ability to consistently meet performance standards and security requirements, ensuring the integrity and availability of critical systems.

What are the historical spending patterns for similar IT infrastructure and data processing services at CMS or HHS?

Historical spending patterns for IT infrastructure and data processing at CMS and HHS are generally substantial, reflecting the agency's vast data management needs and complex technological requirements. Agencies of this size typically allocate significant portions of their budgets to IT services, including hosting, data management, cybersecurity, and application support. Over the past decade, there has been a trend towards consolidating IT services and leveraging cloud solutions, which can impact spending patterns. Analyzing prior contract awards for similar services, their values, durations, and the number of competitors would provide context for the $286.4 million award. This contract appears to represent a significant, multi-year investment consistent with the ongoing need for robust IT support within HHS.

Industry Classification

NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: RFPCMS20120007

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Blue Cross & Blue Shield of South Carolina

Address: INTERSTATE 20 AT ALPINE RD, COLUMBIA, SC, 29219

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

Financial Breakdown

Contract Ceiling: $327,638,439

Exercised Options: $286,407,807

Current Obligation: $286,407,807

Actual Outlays: $128,494,195

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $20,139,348

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HHSM500201300012I

IDV Type: IDC

Timeline