NIH awards $4.78M for IT software maintenance, with 2 bids received

Contract Overview

Contract Amount: $4,778,427 ($4.8M)

Contractor: CDW Government LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2022-03-14

End Date: 2027-03-30

Contract Duration: 1,842 days

Daily Burn Rate: $2.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IT SOFTWARE MAINTENANCE

Place of Performance

Location: VERNON HILLS, LAKE County, ILLINOIS, 60061

State: Illinois Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $4.8 million to CDW GOVERNMENT LLC for work described as: IT SOFTWARE MAINTENANCE Key points: 1. Value for money appears fair given the firm-fixed-price structure and competition. 2. Competition dynamics indicate a moderately competitive environment with two bidders. 3. Risk indicators are low due to the firm-fixed-price contract type and established vendor. 4. Performance context suggests a need for ongoing IT software support within NIH. 5. Sector positioning is within the IT software maintenance domain for healthcare research.

Value Assessment

Rating: fair

The contract's value of $4.78 million for IT software maintenance over approximately five years appears reasonable. The firm-fixed-price structure helps control costs. Benchmarking against similar IT software maintenance contracts for federal agencies would provide a clearer picture of value, but the presence of competition suggests pricing is likely within a market-driven range. The award to CDW Government LLC, a known IT vendor, also lends some confidence to the pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With two bids received, the competition level was moderate. While more bidders could potentially drive prices lower, two bidders suggest that the market is aware of the opportunity and that some level of price discovery occurred. The specific details of the bidding process and the nature of the software would determine if this level of competition was sufficient.

Taxpayer Impact: The moderate competition suggests that taxpayers likely received a fair price, avoiding the potential overpayment associated with sole-source or highly restricted procurements. However, a higher number of bids could have potentially yielded even greater savings.

Public Impact

The National Institutes of Health (NIH) benefits from continued access to essential IT software maintenance. This contract ensures the operational continuity of critical IT systems supporting biomedical research. The geographic impact is primarily within the NIH's operational locations, likely in Maryland and other research facilities. Workforce implications are minimal, as this is a software maintenance contract likely managed by existing IT staff or the contractor's support team.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the software is proprietary and maintenance is specialized.
Risk of cost escalation in future contract renewals if competition diminishes.
Dependence on a single contractor for critical software support could impact operational resilience.

Positive Signals

Firm-fixed-price contract limits cost uncertainty for the government.
Full and open competition provides a baseline for fair pricing.
Award to a reputable IT vendor like CDW Government LLC suggests reliability.

Sector Analysis

This contract falls within the Information Technology sector, specifically IT software maintenance. The market for IT software maintenance is substantial, encompassing support for a wide range of software applications used by government agencies. Comparable spending benchmarks for IT software maintenance vary widely based on the criticality and complexity of the software, but federal agencies consistently invest significant amounts in ensuring the operational integrity of their IT infrastructure.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award to CDW Government LLC, a large business, means that opportunities for small business participation through subcontracting are unlikely unless CDW Government LLC voluntarily engages them. This contract does not directly contribute to the small business ecosystem through set-asides.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer's representative (COR) at NIH, who monitors performance and ensures compliance with contract terms. Accountability is established through the firm-fixed-price structure, which incentivizes the contractor to meet performance standards within the agreed-upon price. Transparency is facilitated by the public availability of contract awards, though detailed performance metrics are not always disclosed.

Related Government Programs

IT Software Licensing and Support
Information Technology Professional Services
Cloud Computing Services
Cybersecurity Software Maintenance

Risk Flags

Moderate competition may limit price optimization.
Lack of specific software details hinders in-depth value analysis.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $4.8 million to CDW GOVERNMENT LLC. IT SOFTWARE MAINTENANCE

Who is the contractor on this award?

The obligated recipient is CDW GOVERNMENT 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 $4.8 million.

What is the period of performance?

Start: 2022-03-14. End: 2027-03-30.

What specific IT software is covered under this maintenance contract?

The provided data does not specify the exact IT software covered by this maintenance contract. However, given the agency (National Institutes of Health) and the North American Industry Classification System (NAICS) code 334111 (Electronic Computer Manufacturing), it is highly probable that the software relates to the maintenance and support of computer hardware, operating systems, or specialized scientific software crucial for biomedical research. Further investigation into the contract details or NIH's IT infrastructure would be necessary to identify the precise software applications.

How does the $4.78 million cost compare to similar IT software maintenance contracts at NIH or other health agencies?

Benchmarking the $4.78 million cost requires comparing it to similar IT software maintenance contracts awarded by agencies like NIH or other health-focused federal bodies. Factors such as the number of users, the criticality of the software, the vendor's support level (e.g., 24/7 vs. business hours), and the duration of the contract significantly influence pricing. Without access to a database of comparable contracts with detailed specifications, a precise value-for-money assessment is challenging. However, the firm-fixed-price nature and the presence of two bidders suggest the price is likely within a reasonable market range for the services provided over the contract's duration.

What are the key performance indicators (KPIs) for this software maintenance contract?

The provided data does not explicitly list the Key Performance Indicators (KPIs) for this IT software maintenance contract. Typically, for such contracts, KPIs would focus on aspects like software uptime, response times for issue resolution, availability of technical support, successful application of patches and updates, and adherence to service level agreements (SLAs). The contracting officer's representative (COR) at NIH would be responsible for monitoring these KPIs to ensure the contractor is meeting their obligations. The firm-fixed-price nature implies that meeting these performance standards is crucial for the contractor to achieve profitability.

What is CDW Government LLC's track record with similar federal IT maintenance contracts?

CDW Government LLC is a well-established vendor in the federal IT space and frequently secures contracts for software, hardware, and related maintenance services across various government agencies. Their track record generally indicates experience in fulfilling IT requirements for large organizations. Specific to software maintenance, they typically act as a reseller and support provider, often partnering with software manufacturers. A review of federal procurement databases (like FPDS or SAM.gov) would reveal the volume and nature of their past maintenance contracts, including performance history and any reported issues, to further assess their suitability for this NIH requirement.

What is the historical spending trend for IT software maintenance at the National Institutes of Health?

The provided data only pertains to a single contract award. To understand the historical spending trend for IT software maintenance at the National Institutes of Health (NIH), one would need to analyze procurement data over several fiscal years. This would involve identifying all contracts categorized under IT software maintenance, support, and related services awarded by NIH. Trends could reveal whether spending is increasing, decreasing, or remaining stable, and whether the agency is consolidating or diversifying its software maintenance providers. Such analysis is crucial for budget planning and identifying potential efficiencies.

What are the potential risks associated with relying on CDW Government LLC for this critical software maintenance?

Potential risks associated with relying on CDW Government LLC for this critical software maintenance include vendor performance issues, such as delays in support or inadequate resolution of technical problems. While CDW is a large vendor, the specific personnel assigned to NIH's account could vary. Another risk is potential price increases upon contract renewal, especially if competition is limited in the future. Furthermore, if the software is highly specialized, there could be a degree of vendor lock-in, making it difficult or costly to switch providers if necessary. However, the firm-fixed-price structure and the initial competition mitigate some of these risks by setting clear expectations and pricing upfront.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing

Product/Service Code: IT AND TELECOM - END USER

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 223381

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 230 N MILWAUKEE AVE, VERNON HILLS, IL, 60061

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $7,766,165

Exercised Options: $4,778,427

Current Obligation: $4,778,427

Actual Outlays: $3,663,856

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: NNG15SC04B

IDV Type: GWAC

Timeline