HHS awards $9.8M for Cisco services, with a 3-year performance period

Contract Overview

Contract Amount: $31,128,667 ($31.1M)

Contractor: Disys Solutions, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2021-02-25

End Date: 2024-02-29

Contract Duration: 1,099 days

Daily Burn Rate: $28.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THE PURPOSE OF THIS AWARD IS TO PROCURE CISCO SFC SERVICES IN ACCORDANCE WITH FAR 16.5. THE PERIOD OF PERFORMANCE IS 03/01/2021 - 02/28/2022. THE TOTAL OBLIGATED AMOUNT IS $9,793,902.51.

Place of Performance

Location: ASHBURN, LOUDOUN County, VIRGINIA, 20147

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $31.1 million to DISYS SOLUTIONS, INC. for work described as: THE PURPOSE OF THIS AWARD IS TO PROCURE CISCO SFC SERVICES IN ACCORDANCE WITH FAR 16.5. THE PERIOD OF PERFORMANCE IS 03/01/2021 - 02/28/2022. THE TOTAL OBLIGATED AMOUNT IS $9,793,902.51. Key points: 1. The contract focuses on IT services, specifically Cisco SFC, indicating a need for network infrastructure support. 2. The award was made under full and open competition, suggesting a competitive bidding process. 3. The contract type is Firm Fixed Price, which provides cost certainty for the government. 4. The period of performance spans three years, allowing for sustained service delivery. 5. The obligated amount of $9.8 million suggests a significant investment in IT infrastructure. 6. The National Institutes of Health (NIH) is the specific agency within HHS, highlighting a focus on research and health IT needs.

Value Assessment

Rating: good

The total obligated amount of $9.8 million over three years averages to approximately $3.27 million per year. Benchmarking this against similar IT service contracts requires more granular data on the specific Cisco services procured. However, the firm fixed-price nature of the contract suggests that the government has negotiated a set price, which can be advantageous for cost control. Without specific per-unit costs or detailed service level agreements, a precise value-for-money assessment is challenging, but the competitive award process provides some assurance of fair pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. The data indicates there were two bidders, which suggests a moderate level of competition for this specific award. While two bidders are better than one, a higher number of bidders typically leads to more robust price discovery and potentially lower prices for the government. The specific details of the bidding process, such as the number of proposals received and the evaluation criteria, would provide further insight.

Taxpayer Impact: The full and open competition, even with two bidders, indicates that taxpayers likely benefited from a competitive pricing environment, preventing potential overcharges that could occur with less competition.

Public Impact

The primary beneficiaries are the National Institutes of Health (NIH) and its researchers, who rely on robust IT infrastructure for their work. The services delivered are critical for maintaining and supporting Cisco network infrastructure, ensuring reliable data transmission and connectivity. The geographic impact is primarily within the facilities managed by NIH, likely concentrated in Maryland and other research hubs. Workforce implications may include the need for specialized IT personnel to manage and maintain the Cisco services, both within the government and potentially through contractor support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if services are highly specialized and difficult to transition.
Reliance on a single vendor's technology (Cisco) could pose long-term strategic risks if market dynamics shift.
The limited number of bidders (2) might suggest potential barriers to entry for other qualified vendors.

Positive Signals

Firm Fixed Price contract provides budget certainty.
Full and open competition promotes a fair marketplace.
The contract duration of three years allows for stable service provision.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on network services and hardware support. The market for IT services, particularly for specialized network equipment like Cisco, is substantial and highly competitive. Many government agencies rely on such services to maintain their operational capabilities. Comparable spending benchmarks would typically involve analyzing IT service contracts of similar scope and duration across various federal agencies, looking at average annual costs and pricing structures for network maintenance and support.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract, nor does it explicitly mention subcontracting plans. Given the nature of specialized Cisco services, it's possible that larger, more established IT service providers were the primary bidders. Further investigation into subcontracting opportunities would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically reside with the contracting officers and program managers within the National Institutes of Health (NIH). Accountability measures are embedded in the Firm Fixed Price contract terms, requiring delivery of specified services. Transparency is generally maintained through contract databases like FPDS, which record award details. 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 Network Services
Cisco Systems Support
Federal Information Technology Contracts
Health IT Infrastructure
Network Maintenance and Operations

Risk Flags

Potential for vendor lock-in
Reliance on proprietary technology
Limited competition observed (2 bidders)

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $31.1 million to DISYS SOLUTIONS, INC.. THE PURPOSE OF THIS AWARD IS TO PROCURE CISCO SFC SERVICES IN ACCORDANCE WITH FAR 16.5. THE PERIOD OF PERFORMANCE IS 03/01/2021 - 02/28/2022. THE TOTAL OBLIGATED AMOUNT IS $9,793,902.51.

Who is the contractor on this award?

The obligated recipient is DISYS SOLUTIONS, INC..

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 $31.1 million.

What is the period of performance?

Start: 2021-02-25. End: 2024-02-29.

What is the track record of DISYS SOLUTIONS, INC. in performing similar federal IT service contracts?

DISYS SOLUTIONS, INC. has a history of performing federal IT service contracts. Analyzing their past performance on similar awards, particularly those involving network infrastructure and Cisco technologies, would be crucial. This includes examining contract values, performance ratings, and any past performance issues or successes. A review of their federal contract history would reveal their experience level and reliability in delivering complex IT solutions to government agencies. For instance, were they the prime contractor, and what was the scope of their responsibilities? Understanding their prior engagements provides insight into their capacity and capability to fulfill the requirements of this current contract effectively.

How does the annual cost of this contract compare to similar IT network service contracts awarded by NIH or other HHS agencies?

The annual cost for this contract averages approximately $3.27 million ($9.8M / 3 years). To benchmark this effectively, we would need to compare it against other Firm Fixed Price contracts for Cisco network services or comparable IT infrastructure support awarded by NIH or other Department of Health and Human Services (HHS) agencies over a similar timeframe. Key comparison points would include the scope of services, the specific Cisco products or solutions covered, the duration of the contract, and the number of bidders. If similar contracts show significantly lower annual costs for comparable services, it might indicate that this award is priced at a premium. Conversely, if the costs align with or are lower than benchmarks, it suggests reasonable value for the services rendered.

What are the primary risks associated with relying on a single vendor's technology (Cisco) for critical network infrastructure?

Relying on a single vendor like Cisco for critical network infrastructure presents several risks. Firstly, there's the risk of vendor lock-in, where transitioning to a different vendor in the future becomes prohibitively expensive or technically challenging due to proprietary technologies and integrated systems. Secondly, pricing power can shift towards the vendor, potentially leading to increased costs for maintenance, upgrades, and new equipment over time, especially if competition diminishes. Thirdly, the agency becomes dependent on the vendor's product roadmap, security updates, and support availability. Any disruptions in the vendor's operations or product lifecycle could directly impact the agency's IT services. Finally, a lack of interoperability with non-vendor-specific solutions might limit flexibility and innovation.

What is the expected effectiveness of these Cisco services in supporting the National Institutes of Health's research and operational goals?

The effectiveness of these Cisco services is expected to be high, given that the National Institutes of Health (NIH) is a major research institution with significant IT demands. Reliable and high-performance network infrastructure is fundamental for data-intensive research, collaboration among scientists, and the operation of complex IT systems. By procuring Cisco SFC services, NIH aims to ensure the stability, security, and speed of its network, which directly supports its mission of advancing health and biomedical research. The three-year performance period suggests a commitment to sustained operational capability. The effectiveness will ultimately depend on the quality of service delivery by the contractor and the alignment of the Cisco infrastructure with NIH's evolving technological and research needs.

How has federal spending on IT network services, particularly Cisco-related, trended over the past five years?

Federal spending on IT network services, including those related to Cisco, has generally trended upwards over the past five years, driven by the increasing digitization of government operations and the need for robust cybersecurity. Agencies are continuously upgrading their networks to support cloud computing, big data analytics, and remote work capabilities. Spending on specific vendor technologies like Cisco often reflects market dominance and agency standardization choices. While overall IT spending fluctuates based on budget appropriations and strategic priorities, the demand for reliable network infrastructure remains a constant. Analyzing detailed spending data would reveal specific growth rates and identify which agencies or types of network services are experiencing the most significant investment.

What are the implications of the 'Other Computer Related Services' NAICS code (541519) for the scope of this contract?

The NAICS code 541519, 'Other Computer Related Services,' is a broad category that encompasses a wide range of IT services not classified under more specific codes. For this contract, which specifies 'Cisco SFC Services,' this code suggests the services likely extend beyond simple hardware installation or basic network support. It could include a combination of network design, implementation, integration, maintenance, troubleshooting, and potentially consulting related to Cisco's networking solutions. This broad classification allows for flexibility in the scope of work but also necessitates clear definition within the contract's Statement of Work (SOW) to ensure both the government and the contractor understand the precise deliverables and expectations. It implies services that are computer system design-related but not primarily focused on hardware or software product sales.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

Product/Service Code: IT AND TELECOM - END USER

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 44670 CAPE CT STE 100, ASHBURN, VA, 20147

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $31,128,667

Exercised Options: $31,128,667

Current Obligation: $31,128,667

Actual Outlays: $21,334,765

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: HHSN316201500053W

IDV Type: GWAC

Timeline