HHS awards $61.5M for digital engagement system to Carahsoft, highlighting software publishing needs

Contract Overview

Contract Amount: $61,535,641 ($61.5M)

Contractor: Carahsoft Technology Corp

Awarding Agency: Department of Health and Human Services

Start Date: 2023-03-01

End Date: 2027-02-28

Contract Duration: 1,460 days

Daily Burn Rate: $42.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 000764-OFFICE OF COMMUNICATIONS DIGITAL ENGAGEMENT SYSTEM (OCDES)

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $61.5 million to CARAHSOFT TECHNOLOGY CORP for work described as: 000764-OFFICE OF COMMUNICATIONS DIGITAL ENGAGEMENT SYSTEM (OCDES) Key points: 1. The contract focuses on software publishing, indicating a need for specialized digital engagement tools. 2. A firm-fixed-price structure suggests predictable costs for the government. 3. The duration of the contract (4 years) allows for sustained development and implementation. 4. The award was made under full and open competition, implying a robust bidding process. 5. The value of the contract is significant within the software publishing NAICS code. 6. The primary contractor, Carahsoft, is a well-known reseller of government IT solutions.

Value Assessment

Rating: good

The contract value of $61.5M over four years for a digital engagement system appears reasonable given the scope of software publishing and support services. Benchmarking against similar government contracts for enterprise software solutions suggests this pricing is within expected ranges. The firm-fixed-price nature provides cost certainty, which is a positive indicator of value for money. However, a detailed breakdown of the software licenses, customization, and support costs would allow for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of six bidders suggests a healthy level of competition for this requirement. A competitive bidding process generally leads to better price discovery and ensures that the government receives offers from a range of qualified sources, potentially driving down costs and improving the quality of the solution.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are being used efficiently by fostering a competitive environment that encourages favorable pricing and innovative solutions.

Public Impact

Beneficiaries include CMS staff and potentially the public through improved digital communication channels. Services delivered encompass software licensing, development, and support for digital engagement platforms. The geographic impact is primarily within the Centers for Medicare and Medicaid Services (CMS) operations. Workforce implications may involve training for CMS personnel on the new digital tools and potential support roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the chosen software platform is highly proprietary.
Risk of scope creep if requirements are not clearly defined and managed throughout the contract lifecycle.
Dependence on the contractor for critical system updates and maintenance.
Ensuring adequate data security and privacy compliance for sensitive health information.

Positive Signals

The use of a firm-fixed-price contract provides cost predictability.
Full and open competition suggests a thorough vetting of potential solutions and pricing.
The contract duration allows for stable implementation and support of the digital engagement system.
Carahsoft's experience as a government IT reseller can facilitate access to a wide range of software solutions.

Sector Analysis

This contract falls within the Software Publishers (NAICS 511210) sector, which includes companies that publish, develop, and distribute software. The federal government is a significant consumer of software, with spending concentrated on enterprise resource planning, cybersecurity, cloud services, and specialized application development. This contract for a digital engagement system aligns with the government's ongoing efforts to modernize its IT infrastructure and improve citizen interaction through digital platforms. Comparable spending benchmarks in this sector often involve multi-year licenses and support agreements for large-scale software deployments.

Small Business Impact

The contract was not awarded as a small business set-aside, and the prime contractor, Carahsoft Technology Corp, is a large business. While there is no direct set-aside, Carahsoft often partners with small businesses for subcontracting opportunities, particularly for specialized services or niche software components. The impact on the small business ecosystem will depend on whether Carahsoft actively seeks out and awards subcontracts to small businesses for this specific contract.

Oversight & Accountability

Oversight for this contract will primarily reside with the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. Accountability measures are embedded within the firm-fixed-price contract terms, requiring delivery of specified software and services. Transparency is facilitated through federal procurement databases where contract awards are publicly reported. While no specific Inspector General jurisdiction is mentioned, the HHS Office of Inspector General would have oversight over potential fraud, waste, and abuse related to federal spending.

Related Government Programs

HHS IT Modernization Initiatives
CMS Digital Services
Government Software Licensing Programs
Federal Cloud Computing Strategy
Digital Government Services Fund

Risk Flags

Potential for vendor lock-in
Data security and privacy concerns
Risk of scope creep
Dependence on contractor for critical services

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $61.5 million to CARAHSOFT TECHNOLOGY CORP. 000764-OFFICE OF COMMUNICATIONS DIGITAL ENGAGEMENT SYSTEM (OCDES)

Who is the contractor on this award?

The obligated recipient is CARAHSOFT TECHNOLOGY CORP.

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 $61.5 million.

What is the period of performance?

Start: 2023-03-01. End: 2027-02-28.

What is Carahsoft Technology Corp's track record with the Department of Health and Human Services?

Carahsoft Technology Corp has a significant track record of contracting with the Department of Health and Human Services (HHS) and its various agencies, including CMS. As a major reseller of IT solutions, Carahsoft frequently secures contracts for software licenses, hardware, and related services across numerous federal agencies. Their awards with HHS often involve providing access to a wide array of commercial off-the-shelf software products through various government-wide acquisition contracts (GWACs) and agency-specific contracts. This extensive history suggests familiarity with HHS procurement processes and a capacity to deliver a broad range of IT products and services to the department.

How does the $61.5M contract value compare to similar digital engagement system procurements?

The $61.5 million contract value for a four-year digital engagement system appears to be within a reasonable range when compared to similar federal procurements for enterprise-level software solutions and IT services. The specific nature of 'digital engagement' can encompass a wide array of functionalities, from public-facing portals and communication tools to internal collaboration platforms. Contracts for comprehensive customer relationship management (CRM) systems, citizen engagement platforms, or advanced communication suites often fall within this multi-million dollar bracket over several years. Factors influencing the cost include the number of users, the complexity of required integrations, customization needs, and ongoing support and maintenance agreements. Without a detailed breakdown of the specific functionalities and services included in this OCDES contract, a precise comparison is challenging, but the overall value is consistent with significant IT investments in this domain.

What are the primary risks associated with this contract for the government?

The primary risks for the government associated with this contract include potential vendor lock-in, where the chosen software platform becomes difficult or costly to replace, limiting future flexibility. There's also a risk of scope creep, where the project's requirements expand beyond the initial agreement, potentially leading to cost overruns or delays, despite the firm-fixed-price structure. Ensuring robust data security and privacy compliance is critical, especially given the sensitive nature of health-related information that might be handled or communicated through the digital engagement system. Furthermore, the government's reliance on Carahsoft and its underlying software vendors for critical updates, maintenance, and technical support presents an operational risk if service levels are not met or if vendor support diminishes.

How effective is the 'Software Publishers' NAICS code in categorizing this digital engagement system contract?

The 'Software Publishers' (NAICS 511210) code is a relevant, though potentially narrow, categorization for this digital engagement system contract. While the contract involves the acquisition and likely customization of software, the core purpose is 'digital engagement,' which implies a broader set of services beyond just publishing. This could include system integration, platform development, ongoing support, and potentially managed services. Software publishers primarily focus on developing and distributing software products. This contract, however, seems to leverage software to achieve a specific functional outcome – digital engagement. Therefore, while software is a key component, other NAICS codes related to IT services, custom software development, or telecommunications might also be applicable depending on the detailed statement of work. The current categorization highlights the product aspect of the acquisition.

What are the historical spending patterns for digital engagement systems within HHS?

Historical spending patterns for digital engagement systems within HHS are likely characterized by a mix of large, enterprise-wide platform procurements and smaller, agency-specific solutions. HHS, encompassing agencies like CMS, NIH, and CDC, has a continuous need to improve communication with healthcare providers, beneficiaries, and the public. Spending often involves acquiring or developing portals, secure messaging systems, data visualization tools, and public information websites. These investments are driven by evolving technology, changing regulatory requirements, and the need for more efficient and accessible information dissemination. The trend has been towards more integrated, user-friendly, and data-driven digital platforms, reflecting broader government initiatives like 'Digital Government' and '21st Century Integrated Digital Experience (TIDE) Act'.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

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: RFQ-CMS-2023-230557

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 11493 SUNSET HILLS RD, 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: $78,644,502

Exercised Options: $61,535,641

Current Obligation: $61,535,641

Actual Outlays: $45,172,916

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 47QSWA18D008F

IDV Type: FSS

Timeline