HHS awards $20.1M for IT infrastructure and cybersecurity, with 19 bids received

Contract Overview

Contract Amount: $20,115,317 ($20.1M)

Contractor: DLH, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2021-06-30

End Date: 2026-06-29

Contract Duration: 1,825 days

Daily Burn Rate: $11.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 19

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IT INFRASTRUCTURE, ENGINEERING AND CYBERSECURITY OPERATIONS SERVICES

Place of Performance

Location: FREDERICK, FREDERICK County, MARYLAND, 21703

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $20.1 million to DLH, LLC for work described as: IT INFRASTRUCTURE, ENGINEERING AND CYBERSECURITY OPERATIONS SERVICES Key points: 1. Contract value represents a significant investment in essential IT and cybersecurity services. 2. Strong competition indicates a healthy market for these specialized services. 3. The firm-fixed-price structure aims to control costs and provide predictable spending. 4. Performance period spans five years, suggesting a need for sustained support. 5. The contract is positioned within the IT services sector, crucial for government operations. 6. Cybersecurity operations are a key focus, aligning with national security priorities.

Value Assessment

Rating: good

The contract's value of $20.1 million over five years for IT infrastructure, engineering, and cybersecurity operations services appears reasonable given the scope. Benchmarking against similar large-scale IT support contracts within federal agencies suggests this pricing is competitive. The firm-fixed-price (FFP) award type further supports value for money by shifting cost risk to the contractor, encouraging efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition after exclusion of sources, indicating a robust bidding process. With 19 bids received, the level of competition was high, suggesting that multiple capable vendors vied for the opportunity. This broad participation generally leads to better price discovery and a wider range of technical solutions being considered.

Taxpayer Impact: The high number of bidders in this full and open competition is beneficial for taxpayers, as it likely drove down prices and ensured the government secured services at a competitive market rate.

Public Impact

The National Institutes of Health (NIH) benefits from enhanced IT infrastructure and cybersecurity. Essential IT operations, engineering, and cybersecurity services are delivered to support NIH's mission. The contract's impact is primarily within Maryland, where the services are likely performed. The contract supports a workforce skilled in IT infrastructure management and cybersecurity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if follow-on work is not competed.
Reliance on a single contractor for critical IT and cybersecurity functions could pose a risk.
Ensuring continuous alignment with evolving cybersecurity threats and technological advancements.

Positive Signals

Strong competition indicates a healthy market and potential for innovation.
Firm-fixed-price contract incentivizes cost efficiency and predictable spending.
Long-term contract duration allows for stable support and knowledge retention.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computer systems design and related services. The federal government is a major consumer of such services, with significant spending allocated to maintaining and securing its vast IT infrastructure. This contract with NIH represents a portion of that overall spending, supporting critical research and health initiatives through robust technological capabilities.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside requirement for this award (ss: false, sb: false). While DLH, LLC is the prime contractor, there is no explicit information on subcontracting plans for small businesses within this data. Further analysis would be needed to determine if small businesses are involved in the supply chain or if there are opportunities for them to participate in future related procurements.

Oversight & Accountability

Oversight for this contract is likely managed by the contracting officer's representative (COR) within the National Institutes of Health. The firm-fixed-price nature of the contract provides a degree of financial oversight by establishing a set cost. Transparency is generally maintained through federal procurement databases, and the contract is subject to review by relevant oversight bodies and potentially the Inspector General if performance issues arise.

Related Government Programs

IT Infrastructure Support Services
Cybersecurity Services Contracts
Computer Systems Design Services
Federal IT Modernization Programs
Health IT Services

Risk Flags

Cybersecurity Risk
Performance Management
Contractor Dependency
Technology Obsolescence

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $20.1 million to DLH, LLC. IT INFRASTRUCTURE, ENGINEERING AND CYBERSECURITY OPERATIONS SERVICES

Who is the contractor on this award?

The obligated recipient is DLH, LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $20.1 million.

What is the period of performance?

Start: 2021-06-30. End: 2026-06-29.

What is the track record of DLH, LLC in performing similar IT infrastructure and cybersecurity contracts for the federal government?

DLH, LLC has a substantial history of performing IT, engineering, and professional services for various federal agencies, including the Department of Health and Human Services (HHS) and the Department of Defense. Their portfolio often includes large-scale contracts for IT modernization, cybersecurity operations, and health IT solutions. Analyzing their past performance on similar contracts, particularly those with firm-fixed-price structures and long durations, would provide insight into their ability to manage complex projects, meet performance metrics, and maintain cost control. Specific contract performance reports and past performance questionnaires from previous awards would offer a more detailed assessment of their reliability and effectiveness in delivering these types of services.

How does the awarded price compare to market rates for similar IT infrastructure and cybersecurity operations services?

Benchmarking the $20.1 million contract value against market rates requires detailed analysis of the specific services, labor categories, and geographic locations involved. However, given the firm-fixed-price structure and the competitive nature of the procurement (19 bids), it suggests the price is likely aligned with or favorable compared to market rates. Federal procurement data, such as the Federal Procurement Data System (FPDS), can be used to find comparable contracts. Analyzing the average cost per labor hour for similar roles (e.g., cybersecurity analysts, network engineers) in the Maryland region, and comparing the total contract value against the estimated scope of work, would provide a more precise valuation. The high number of bidders further supports the notion that the pricing is competitive.

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

Key risks include potential cybersecurity vulnerabilities if the contractor's security protocols are insufficient, performance degradation over the five-year period, and contractor personnel turnover impacting institutional knowledge. Mitigation strategies likely involve stringent security requirements outlined in the contract, performance-based metrics with potential penalties for non-compliance, and regular performance reviews by the government. The firm-fixed-price nature also mitigates cost overrun risks for the government. Furthermore, the government's ability to exercise options and conduct market research for future procurements can mitigate risks associated with long-term reliance on a single vendor.

How effective is the current IT infrastructure and cybersecurity support likely to be given the contract's scope and duration?

The effectiveness hinges on the contractor's execution and the clarity of the performance work statement (PWS). A five-year duration for IT infrastructure and cybersecurity operations suggests a need for sustained, high-level support to maintain and enhance critical systems. The firm-fixed-price model incentivizes efficiency, but the government must actively monitor performance against defined metrics. The NIH's mission-critical nature implies that robust and reliable IT and cybersecurity are paramount. Effectiveness will be measured by system uptime, incident response times, successful threat mitigation, and the ability to adapt to evolving technological landscapes and security threats throughout the contract period.

What are the historical spending patterns for IT infrastructure and cybersecurity services at the National Institutes of Health?

Historical spending patterns at NIH for IT infrastructure and cybersecurity services are likely substantial and have shown a consistent upward trend, mirroring broader federal government investments in these areas. Agencies like NIH rely heavily on secure and advanced IT systems to support research, data management, and operational functions. Analyzing past contract awards for similar services over the last 5-10 years would reveal the typical contract values, durations, and types of competition. This specific $20.1 million award should be viewed within that context, potentially representing a consolidation of services or a response to increased demand driven by digital transformation initiatives and heightened cybersecurity threats.

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 - IT MANAGEMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: NIMH-21000925

Offers Received: 19

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: DLH Holdings Corp

Address: 6720B ROCKLEDGE DR STE 777, BETHESDA, MD, 20817

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $22,190,248

Exercised Options: $20,115,317

Current Obligation: $20,115,317

Actual Outlays: $16,426,421

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSN316201200145W

IDV Type: GWAC

Timeline