HHS awards $31.4M contract to Red River Technology LLC for IT services, with 4 orders issued

Contract Overview

Contract Amount: $31,380,637 ($31.4M)

Contractor: RED River Technology LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2023-08-14

End Date: 2026-09-29

Contract Duration: 1,142 days

Daily Burn Rate: $27.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: RED RIVER COMPUTER CO:1105831 [23-002835]

Place of Performance

Location: CLAREMONT, SULLIVAN County, NEW HAMPSHIRE, 03743

State: New Hampshire Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $31.4 million to RED RIVER TECHNOLOGY LLC for work described as: RED RIVER COMPUTER CO:1105831 [23-002835] Key points: 1. Contract value of $31.4M over its period of performance suggests a significant investment in IT services. 2. The contract was awarded under full and open competition, indicating a broad market search. 3. The fixed-price contract type aims to control costs by establishing a set price for services. 4. The duration of the contract (1142 days) allows for sustained IT support and project execution. 5. The award to Red River Technology LLC represents a key vendor relationship for NIH's IT needs. 6. The North American Industry Classification System (NAICS) code 541519 points to specialized computer services.

Value Assessment

Rating: good

The contract value of $31.4M for IT services over approximately three years appears reasonable given the scope of work implied by the NAICS code. Benchmarking against similar large-scale IT service contracts awarded by federal agencies would provide a more precise value-for-money assessment. The firm fixed-price structure suggests an effort to manage cost predictability, which is a positive indicator for value.

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 an offer. This approach typically fosters a competitive environment, encouraging multiple bidders to vie for the contract. The presence of 4 delivery orders suggests active utilization and potentially multiple phases or service components being procured under this umbrella agreement.

Taxpayer Impact: Full and open competition generally benefits taxpayers by promoting a wider range of offers, which can lead to more competitive pricing and better value for the government's investment.

Public Impact

The primary beneficiaries are the National Institutes of Health (NIH) and the broader Department of Health and Human Services (HHS), which will receive essential IT services. The services delivered likely encompass a range of IT support, maintenance, and potentially project-based solutions critical for healthcare research and administration. The geographic impact is centered around NIH facilities, but the services may support remote operations and research across the nation. Workforce implications could include the direct employment of IT professionals by Red River Technology LLC and potential indirect impacts on government IT staff who manage or collaborate on these services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if contract scope is not carefully managed.
Reliance on a single vendor for critical IT services could pose a risk if performance issues arise.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process.
Firm fixed-price contract type helps control costs and provides budget certainty.
Long contract duration allows for stable IT support and project continuity.

Sector Analysis

The IT services sector within the federal government is vast, encompassing a wide array of support, development, and maintenance activities. Contracts like this, under NAICS code 541519 (Other Computer Related Services), are crucial for agencies like HHS and NIH to maintain and modernize their technological infrastructure. Spending in this category is consistently high across federal agencies, reflecting the increasing reliance on digital solutions for operations and mission delivery. This contract fits within the broader trend of federal agencies outsourcing specialized IT functions to private sector partners.

Small Business Impact

This contract does not appear to have been set aside for small businesses, as indicated by 'ss': false and 'sb': false. The award to Red River Technology LLC, a company likely of significant size given the contract value, suggests that subcontracting opportunities for small businesses may exist, but this is not explicitly detailed in the provided data. Further analysis of the contract's subcontracting plan would be necessary to assess the direct impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the National Institutes of Health (NIH). The firm fixed-price nature of the contract provides a degree of accountability by setting clear cost expectations. Transparency is generally facilitated through contract databases like FPDS, where award details are published. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

HHS IT Modernization Contracts
NIH IT Support Services
Federal Civilian Agency IT Services
Information Technology Professional Services
Computer Systems Design Services

Risk Flags

Potential for scope creep if not managed tightly.
Reliance on contractor for critical IT infrastructure.
Cybersecurity risks inherent in IT service provision.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $31.4 million to RED RIVER TECHNOLOGY LLC. RED RIVER COMPUTER CO:1105831 [23-002835]

Who is the contractor on this award?

The obligated recipient is RED RIVER TECHNOLOGY 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 $31.4 million.

What is the period of performance?

Start: 2023-08-14. End: 2026-09-29.

What is the track record of Red River Technology LLC with federal contracts, particularly within HHS?

Red River Technology LLC has a substantial history of federal contracting, with numerous awards across various agencies. While specific details for HHS are not provided in this snippet, their presence in federal procurement suggests experience in delivering IT solutions. A deeper dive into their contract history, including past performance reviews and any past issues or successes within HHS or similar agencies, would be necessary for a comprehensive assessment. Their ability to secure a contract of this magnitude from NIH indicates a level of trust and proven capability, but a thorough review of their performance on prior federal engagements is crucial for understanding their reliability and effectiveness.

How does the pricing structure of this contract compare to similar IT service contracts awarded by NIH or HHS?

The contract is structured as Firm Fixed Price (FFP), which is a common and generally favorable pricing arrangement for the government as it shifts cost risk to the contractor. Without specific line-item details or labor rates, a direct comparison of unit costs is challenging. However, the overall award value of $31.4 million over approximately three years for 'Other Computer Related Services' (NAICS 541519) can be benchmarked against the average value of similar FFP IT service contracts awarded by NIH or HHS. If this contract's total value falls within or below the typical range for comparable services and durations, it suggests competitive pricing. Conversely, if it significantly exceeds benchmarks, it might warrant further investigation into the scope or specific services required.

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

Key risks include potential performance deficiencies by the contractor, cost overruns if the scope expands beyond initial expectations (though FFP mitigates this significantly), and cybersecurity vulnerabilities associated with IT services. Mitigation strategies typically involve robust contract oversight, clearly defined performance metrics and Service Level Agreements (SLAs), regular performance reviews, and adherence to strict cybersecurity protocols mandated by HHS. The firm fixed-price nature itself is a risk mitigation tool for cost control. The government's ability to issue delivery orders also allows for phased implementation and adjustment, potentially reducing upfront risk.

How effective is the competition level in ensuring value for taxpayers on this contract?

The contract was awarded under 'full and open competition,' which is the most competitive method available. This approach theoretically maximizes the number of potential bidders, driving down prices and encouraging innovation. The fact that it was competed suggests that multiple companies were interested and capable of performing the work. The effectiveness for taxpayers hinges on whether the competition was robust enough to yield the best possible price and technical solution. While 'full and open' is ideal, the actual number of bids received and the evaluation process are critical determinants of its success in securing taxpayer value.

What is the historical spending pattern for 'Other Computer Related Services' (NAICS 541519) at NIH and HHS?

Historical spending on NAICS 541519 by NIH and HHS is substantial, reflecting the critical role of IT services in supporting health research, data management, and administrative functions. Agencies like NIH consistently procure a wide range of computer-related services, from system design and integration to maintenance and support. Analyzing past spending trends for this specific NAICS code would reveal whether this $31.4 million award represents an increase, decrease, or continuation of previous investment levels. It would also help identify key vendors and the types of services most frequently contracted, providing context for the current award's significance and potential future needs.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: CS-114301

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 21 WATER ST STE 500, CLAREMONT, NH, 03743

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $42,109,362

Exercised Options: $31,380,637

Current Obligation: $31,380,637

Actual Outlays: $31,380,092

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: HHSN316201500065W

IDV Type: GWAC

Timeline