CMS IT Services Contract Awarded to National Government Services, Inc. for $21.8M
Contract Overview
Contract Amount: $21,843,163 ($21.8M)
Contractor: National Government Services, Inc.
Awarding Agency: Department of Health and Human Services
Start Date: 2025-01-27
End Date: 2027-01-26
Contract Duration: 729 days
Daily Burn Rate: $30.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: TIME AND MATERIALS
Sector: IT
Official Description: SPARC WILL BE THE MAJOR CONTRACT VEHICLE FOR CMS IT SYSTEMS AND SUPPORT HHS OPDIVS CAN ALSO MAKE USE OF SPARC TO OBTAIN IT SERVICES ALONG THE ENTERPRISE PERFORMANCE LIFE CYCLE (EPLC). INITIATION, CONCEPT, AND PLANNING SERVICES, REQUIREMENTS SERVICES
Place of Performance
Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244
State: Maryland Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $21.8 million to NATIONAL GOVERNMENT SERVICES, INC. for work described as: SPARC WILL BE THE MAJOR CONTRACT VEHICLE FOR CMS IT SYSTEMS AND SUPPORT HHS OPDIVS CAN ALSO MAKE USE OF SPARC TO OBTAIN IT SERVICES ALONG THE ENTERPRISE PERFORMANCE LIFE CYCLE (EPLC). INITIATION, CONCEPT, AND PLANNING SERVICES, REQUIREMENTS SERVICES Key points: 1. Contract supports critical IT systems for CMS, impacting healthcare delivery. 2. National Government Services, Inc. is the primary awardee, suggesting established capabilities. 3. Full and open competition indicates a robust bidding process. 4. The contract duration of approximately two years provides a stable period for service delivery. 5. Time and Materials pricing structure requires careful monitoring for cost control. 6. The award is a delivery order under a larger contract vehicle, likely SPARC. 7. This contract falls under Computer Systems Design Services, a key IT sector.
Value Assessment
Rating: good
The contract value of $21.8 million over two years for IT systems and support appears reasonable for a federal agency of CMS's size and complexity. Benchmarking against similar IT support contracts within HHS or other large federal agencies would provide a more precise value-for-money assessment. The Time and Materials (T&M) pricing model, while flexible, necessitates diligent oversight to ensure costs remain within expected parameters and do not escalate due to inefficiencies or scope creep. Without specific performance metrics or detailed cost breakdowns, a definitive value assessment is challenging, but the competitive nature of the award suggests a baseline level of fair pricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This approach typically fosters a competitive environment, encouraging multiple bidders to offer their best pricing and technical solutions. The fact that it's a delivery order under a larger vehicle suggests the initial competition for the vehicle itself was extensive, and this order represents a specific task within that framework. The number of bidders for this specific delivery order is not provided, but the overall competition for the parent contract vehicle is a positive indicator for price discovery.
Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces and encouraging innovation from a wider pool of contractors, leading to potentially better value for public funds.
Public Impact
Beneficiaries include Medicare and Medicaid beneficiaries who rely on stable and efficient IT systems for program administration and service delivery. Services delivered encompass computer systems design and support, crucial for the operational integrity of CMS. The geographic impact is primarily national, supporting federal operations, with potential implications for the workforce in Maryland where the contractor is based. Workforce implications may include the direct employment by National Government Services, Inc. and its subcontractors, as well as the indirect impact on federal IT personnel managing these systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Time and Materials pricing requires robust oversight to prevent cost overruns.
- The duration of the contract (729 days) is substantial, necessitating ongoing performance monitoring.
- Dependence on a single delivery order awardee for critical IT functions could pose a risk if performance issues arise.
Positive Signals
- Awarded under full and open competition, suggesting a competitive pricing environment.
- The contractor, National Government Services, Inc., likely has prior experience with federal IT contracts.
- The contract supports essential IT infrastructure for CMS, indicating a focus on critical government functions.
Sector Analysis
This contract falls within the Computer Systems Design Services sector, a significant segment of the IT industry. Federal spending in this area is substantial, supporting a wide range of government operations. The SPARC contract vehicle, under which this delivery order was likely placed, is a major platform for CMS IT procurements, indicating a strategic approach to managing IT services. Comparable spending benchmarks would involve analyzing other large IT support contracts awarded by HHS or similar federal agencies, considering factors like contract scope, duration, and service complexity.
Small Business Impact
The data indicates that small business participation (ss: false, sb: false) was not a primary set-aside criterion for this specific award. This suggests the contract was competed broadly without specific small business goals. However, the prime contractor, National Government Services, Inc., may engage small businesses as subcontractors to fulfill portions of the contract requirements. The extent of small business subcontracting will be a key factor in assessing the impact on the small business ecosystem for this particular award.
Oversight & Accountability
Oversight for this contract will likely be managed by the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. Accountability measures will be embedded within the contract's performance work statement, requiring adherence to service level agreements and delivery schedules. Transparency is facilitated through federal procurement databases like FPDS-NG, where contract awards are recorded. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.
Related Government Programs
- SPARC (Strategic Partners Acquisition Readiness Contract)
- HHS IT Modernization Initiatives
- CMS Health IT Services
- Federal Enterprise Architecture
Risk Flags
- Potential for cost overruns due to Time and Materials pricing.
- Need for robust oversight to manage contractor performance and costs.
- Dependence on a single contractor for critical IT functions.
Tags
it-services, computer-systems-design, health-it, cms, hhs, national-government, delivery-order, time-and-materials, full-and-open-competition, maryland, it-support, federal-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $21.8 million to NATIONAL GOVERNMENT SERVICES, INC.. SPARC WILL BE THE MAJOR CONTRACT VEHICLE FOR CMS IT SYSTEMS AND SUPPORT HHS OPDIVS CAN ALSO MAKE USE OF SPARC TO OBTAIN IT SERVICES ALONG THE ENTERPRISE PERFORMANCE LIFE CYCLE (EPLC). INITIATION, CONCEPT, AND PLANNING SERVICES, REQUIREMENTS SERVICES
Who is the contractor on this award?
The obligated recipient is NATIONAL GOVERNMENT SERVICES, INC..
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 $21.8 million.
What is the period of performance?
Start: 2025-01-27. End: 2027-01-26.
What is the track record of National Government Services, Inc. in delivering similar IT services to federal agencies?
National Government Services, Inc. (NGS) has a significant history of providing IT and administrative services to federal agencies, particularly within the healthcare domain. They are a major contractor for the Centers for Medicare & Medicaid Services (CMS), often handling large-scale IT operations and data processing. Their experience includes managing complex systems, ensuring data security, and supporting critical healthcare programs. While specific performance details for past contracts are not detailed here, their continued selection for major federal contracts suggests a generally positive track record and established capabilities in meeting government requirements. Further analysis would involve reviewing past performance evaluations and any documented issues or commendations.
How does the $21.8 million contract value compare to similar IT support contracts for federal healthcare agencies?
The $21.8 million contract value over approximately two years for IT systems and support is within a common range for federal healthcare agencies like CMS. Large agencies often award multi-million dollar contracts for IT services due to the complexity and criticality of their operations. For instance, contracts for electronic health record (EHR) system maintenance, data analytics platforms, or cybersecurity services can easily reach tens or hundreds of millions of dollars over several years. This specific contract's value appears moderate when considering the scope of supporting CMS's vast IT infrastructure. A more precise comparison would require benchmarking against contracts with identical or highly similar service descriptions and durations within the HHS portfolio or other agencies managing large citizen-facing programs.
What are the primary risks associated with a Time and Materials (T&M) contract for IT services?
The primary risk associated with a Time and Materials (T&M) contract for IT services is the potential for cost overruns. Unlike fixed-price contracts, T&M agreements reimburse the contractor for direct labor hours at specified rates and for the actual cost of materials. This structure can incentivize longer task durations or less efficient work if not rigorously managed. For taxpayers, this means the final cost is not predetermined and can exceed initial estimates if oversight is weak. Key risks include scope creep, where requirements expand without formal change orders, and potential inefficiencies in labor application. Effective mitigation requires strong government oversight, detailed tracking of labor hours and materials, and clear definition of tasks and milestones.
How effective is 'full and open competition' in ensuring value for money in federal IT procurements?
Full and open competition is generally considered the most effective method for ensuring value for money in federal IT procurements. By allowing all responsible sources to submit bids, it maximizes the potential for a competitive marketplace. This competition drives contractors to offer their best pricing, most innovative solutions, and highest quality services to win the contract. It also provides agencies with a wider range of options to choose from, increasing the likelihood of selecting a contractor that offers the best overall value. While it requires more upfront effort in terms of solicitation and evaluation, the long-term benefits of potentially lower costs, improved performance, and greater innovation typically outweigh these initial investments for taxpayers.
What is the typical duration for federal IT support contracts of this nature?
The typical duration for federal IT support contracts, especially those involving ongoing system maintenance, development, and operational support, often ranges from one to five years. This contract's duration of approximately two years (729 days) is well within this common range. Longer durations provide stability for the contractor to implement and manage complex systems, while shorter durations allow agencies more frequent opportunities to re-evaluate performance and market conditions. Delivery orders under larger contract vehicles, like SPARC, can have varying durations depending on the specific task requirements, but a two-year period is standard for many service-based IT engagements.
What are the implications of this contract being a 'delivery order' under a larger vehicle?
This contract being a 'delivery order' signifies that it is a specific task or project awarded under a pre-existing, larger indefinite-delivery/indefinite-quantity (IDIQ) contract vehicle, such as the SPARC vehicle mentioned. The initial competition occurred when the parent IDIQ vehicle was awarded, establishing a pool of pre-qualified contractors. This delivery order represents a specific call for services within the scope of that larger vehicle. The implications include streamlined procurement for the agency, as the foundational competition and contract terms are already established. For the contractor, it means securing a defined piece of work. For taxpayers, it suggests that the initial competition for the vehicle was robust, and this order is a specific task within that framework, likely subject to pre-negotiated rates and terms.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: RFQ-CMS-2024-250297
Offers Received: 1
Pricing Type: TIME AND MATERIALS (Y)
Evaluated Preference: NONE
Contractor Details
Parent Company: Elevance Health, Inc.
Address: 8115 KNUE RD, INDIANAPOLIS, IN, 46250
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $43,501,320
Exercised Options: $21,843,163
Current Obligation: $21,843,163
Actual Outlays: $8,872,762
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HHSM500201600004I
IDV Type: IDC
Timeline
Start Date: 2025-01-27
Current End Date: 2027-01-26
Potential End Date: 2029-01-26 00:00:00
Last Modified: 2026-03-10
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