CMS Spends $12.5M on ServiceNow Licenses via Full and Open Competition

Contract Overview

Contract Amount: $12,480,137 ($12.5M)

Contractor: Carahsoft Technology Corp

Awarding Agency: Department of Health and Human Services

Start Date: 2025-08-01

End Date: 2026-07-31

Contract Duration: 364 days

Daily Burn Rate: $34.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THIS EFFORT IS TO PROCURE/ACQUIRE SERVICENOW LICENSES FOR THE CENTERS FOR MEDICARE AND MEDICAID SERVICES (CMS) FOR CMS REQUIREMENTS FOR THE NEXT FIVE YEARS. THIS EFFORT WILL CONTINUE THE ACQUISITION OF SERVICENOW LICENSES THAT ARE PROVIDED UNDER THE

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $12.5 million to CARAHSOFT TECHNOLOGY CORP for work described as: THIS EFFORT IS TO PROCURE/ACQUIRE SERVICENOW LICENSES FOR THE CENTERS FOR MEDICARE AND MEDICAID SERVICES (CMS) FOR CMS REQUIREMENTS FOR THE NEXT FIVE YEARS. THIS EFFORT WILL CONTINUE THE ACQUISITION OF SERVICENOW LICENSES THAT ARE PROVIDED UNDER THE Key points: 1. CMS is acquiring ServiceNow licenses for a five-year period. 2. Carahsoft Technology Corp is the awardee. 3. The contract was awarded under full and open competition. 4. The total value is approximately $12.48 million.

Value Assessment

Rating: good

The contract value of $12.48 million for five years of ServiceNow licenses appears reasonable given the software's capabilities and typical enterprise pricing. Benchmarking against similar large-scale government or enterprise software procurements would provide further validation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, indicating a robust price discovery process. This method allows multiple vendors to bid, driving competitive pricing and ensuring the government receives fair market value.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it promotes a competitive environment, potentially leading to lower prices and better value for the government's investment.

Public Impact

Ensures continued access to critical IT infrastructure for CMS operations. Supports data management and workflow automation for healthcare services. Potential for improved efficiency in processing and managing healthcare information.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with long-term software licenses.
Reliance on a single software platform could pose integration challenges.

Positive Signals

Leverages a widely adopted and feature-rich platform.
Full and open competition ensures fair pricing.
Supports critical government functions for healthcare.

Sector Analysis

This procurement falls within the IT sector, specifically software licensing. Spending on enterprise software like ServiceNow is common across government agencies to support various operational needs, including data management and workflow automation.

Small Business Impact

While the awardee is Carahsoft Technology Corp, the contract was awarded under full and open competition. Analysis of subcontracting opportunities for small businesses is not detailed in the provided data.

Oversight & Accountability

The contract was awarded under full and open competition, suggesting a transparent process. Further oversight would involve monitoring contract performance, adherence to terms, and ensuring continued value for money throughout the contract period.

Related Government Programs

Software Publishers
Department of Health and Human Services Contracting
Centers for Medicare and Medicaid Services Programs

Risk Flags

Potential for cost escalation in future years beyond the initial award.
Dependence on a single vendor for critical software functionality.
Risk of underutilization if license needs are miscalculated.
Cybersecurity risks associated with cloud-based software.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $12.5 million to CARAHSOFT TECHNOLOGY CORP. THIS EFFORT IS TO PROCURE/ACQUIRE SERVICENOW LICENSES FOR THE CENTERS FOR MEDICARE AND MEDICAID SERVICES (CMS) FOR CMS REQUIREMENTS FOR THE NEXT FIVE YEARS. THIS EFFORT WILL CONTINUE THE ACQUISITION OF SERVICENOW LICENSES THAT ARE PROVIDED UNDER THE

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 $12.5 million.

What is the period of performance?

Start: 2025-08-01. End: 2026-07-31.

What is the specific breakdown of license types and quantities being procured, and how does this align with CMS's projected user needs over the five-year period?

The provided data does not detail the specific breakdown of ServiceNow license types and quantities. A thorough analysis would require access to the contract's statement of work and license schedule. Understanding the exact mix of user, platform, and application licenses is crucial to assess if the procurement adequately addresses CMS's evolving requirements and avoids over or under-licensing, thereby ensuring optimal value.

What are the key performance indicators (KPIs) established for this ServiceNow contract, and how will their achievement be measured to ensure effective service delivery and value realization?

The provided data does not specify the Key Performance Indicators (KPIs) for this ServiceNow contract. Effective oversight requires clearly defined KPIs related to uptime, performance, support response times, and user satisfaction. Regular performance reviews against these metrics are essential to ensure the vendor meets contractual obligations and that the significant taxpayer investment in these licenses yields the intended operational benefits for CMS.

Are there any planned transitions or integrations with other CMS IT systems, and what is the strategy to manage potential interoperability challenges and associated costs?

Information regarding planned transitions or integrations with other CMS IT systems is not available in the provided data. ServiceNow often integrates with various enterprise systems. A proactive strategy to address potential interoperability challenges, including data exchange protocols, API compatibility, and security considerations, is vital to prevent cost overruns and ensure seamless functionality, maximizing the return on this substantial software investment.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 75FCMC25QJ0140001

Offers Received: 1

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: $12,480,137

Exercised Options: $12,480,137

Current Obligation: $12,480,137

Actual Outlays: $12,480,137

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47QSWA18D008F

IDV Type: FSS

Timeline