HHS awards $27.5M contract for IT support, with FUTRON, INC. as the primary contractor

Contract Overview

Contract Amount: $27,478,435 ($27.5M)

Contractor: Futron, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2021-01-15

End Date: 2026-05-14

Contract Duration: 1,945 days

Daily Burn Rate: $14.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: TRANSITION AND OPERATIONAL SUPPORT FOR OCIO AND OS

Place of Performance

Location: WOODBRIDGE, PRINCE WILLIAM County, VIRGINIA, 22193

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $27.5 million to FUTRON, INC. for work described as: TRANSITION AND OPERATIONAL SUPPORT FOR OCIO AND OS Key points: 1. The contract value of $27.5 million over approximately 5 years suggests a significant investment in IT operational support. 2. The 'FULL AND OPEN COMPETITION' indicates a potentially competitive bidding process, which could lead to better pricing. 3. The contract is categorized under NAICS code 517110 (Wired Telecommunications Carriers), suggesting a focus on network and communication infrastructure. 4. The contract's duration of 1945 days (approx. 5.3 years) allows for sustained support but also necessitates ongoing performance monitoring. 5. The primary contractor, FUTRON, INC., will be responsible for delivering transition and operational support to the OCIO and OS. 6. The contract type is 'FIRM FIXED PRICE', which shifts cost risk to the contractor but requires careful scope definition to avoid change orders.

Value Assessment

Rating: good

The contract value of $27.5 million for IT operational support over five years appears reasonable given the scope of services typically required for an organization like HHS. Benchmarking against similar IT support contracts within federal agencies would provide a more precise value-for-money assessment. The firm-fixed-price structure suggests that the contractor bears the risk of cost overruns, which is generally favorable for the government if the scope is well-defined.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION', implying that all responsible sources were permitted to submit bids. The number of bidders is not specified, but this procurement method generally fosters a competitive environment, which can lead to more favorable pricing and innovative solutions for the government. The agency's commitment to open competition suggests a desire to leverage the broadest possible market.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it increases the likelihood of obtaining the best value by encouraging multiple companies to offer competitive bids, potentially driving down costs and improving service quality.

Public Impact

The Office of the Chief Information Officer (OCIO) and Office of the Secretary (OS) within HHS will benefit from enhanced IT operational support. Services delivered will likely include network management, system maintenance, cybersecurity support, and potentially help desk functions. The geographic impact is primarily within HHS facilities, likely concentrated in the Washington D.C. metropolitan area where major offices are located. The contract supports the federal IT workforce by engaging a contractor to provide specialized technical expertise.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if requirements are not precisely defined under the firm-fixed-price contract.
Dependence on a single contractor for critical IT operational support could pose a risk if performance falters.
Ensuring adequate knowledge transfer and transition planning at the end of the contract period will be crucial.

Positive Signals

The firm-fixed-price contract structure incentivizes the contractor to manage costs effectively.
Full and open competition suggests a robust selection process that likely identified a capable provider.
The multi-year duration allows for stability and continuity in IT operations.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on telecommunications and operational support. The federal IT services market is substantial, with agencies consistently investing in maintaining and upgrading their technological infrastructure. This contract aligns with the government's ongoing need for reliable and secure IT operations to support its mission-critical functions. Comparable spending benchmarks would involve analyzing other large-scale IT support contracts awarded to telecommunications carriers or IT service providers.

Small Business Impact

The data provided does not indicate any specific small business set-aside provisions for this contract. As it was awarded under full and open competition, the primary contractor, FUTRON, INC., is likely a large business. There is no explicit information on subcontracting plans for small businesses, which would be a key area to monitor to ensure opportunities are extended to the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Health and Human Services' contracting officers and program managers. Accountability measures are inherent in the firm-fixed-price contract type, which holds the contractor responsible for delivering services within the agreed-upon price. Transparency is facilitated through federal procurement databases like FPDS, where contract awards are recorded. The Inspector General's office for HHS may conduct audits or investigations if performance issues or potential fraud are identified.

Related Government Programs

HHS IT Modernization Initiatives
Federal Cybersecurity Contracts
Telecommunications Services for Government
IT Operations and Maintenance Support

Risk Flags

Potential for vendor lock-in if transition planning is inadequate.
Risk of cybersecurity breaches if contractor security protocols are insufficient.
Dependency on contractor performance for critical IT functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $27.5 million to FUTRON, INC.. TRANSITION AND OPERATIONAL SUPPORT FOR OCIO AND OS

Who is the contractor on this award?

The obligated recipient is FUTRON, INC..

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Office of the Assistant Secretary for Administration).

What is the total obligated amount?

The obligated amount is $27.5 million.

What is the period of performance?

Start: 2021-01-15. End: 2026-05-14.

What is the track record of FUTRON, INC. in performing similar IT operational support contracts for federal agencies?

A review of FUTRON, INC.'s contract history would be necessary to assess their performance on similar IT operational support contracts. Key indicators to examine include past performance evaluations, any documented disputes or contract terminations, and the scale and complexity of previous projects. Understanding their experience with government-specific requirements, such as security protocols and reporting standards, is also crucial. If FUTRON, INC. has a history of successful delivery on comparable contracts, it suggests a lower risk for this HHS award. Conversely, any past performance issues would warrant closer scrutiny of this current contract's oversight and risk mitigation strategies.

How does the awarded value compare to similar IT support contracts within HHS or other large federal agencies?

To benchmark the $27.5 million contract value, a comparative analysis of similar IT operational support contracts awarded by HHS or other large federal agencies (e.g., DoD, GSA, DHS) over the past 3-5 years is required. This analysis should consider contracts with comparable scope, duration, and service requirements, adjusted for inflation and market rate fluctuations. Factors such as the number of end-users supported, the criticality of the systems managed, and the specific technologies involved should be normalized. If this contract's value per year or per service unit is significantly higher than comparable contracts, it may indicate potential overpricing or a less competitive award. Conversely, a value within the typical range suggests fair pricing.

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

Primary risks for this contract include potential contractor underperformance, cybersecurity vulnerabilities, and the possibility of scope creep, especially given the firm-fixed-price nature which requires precise definition. Mitigation strategies typically involve robust contract oversight by HHS program managers, regular performance reviews, clearly defined Service Level Agreements (SLAs), and stringent cybersecurity protocols. The contract's multi-year duration also necessitates proactive transition planning to ensure continuity of services upon completion. The government's ability to enforce contractual terms and penalties serves as a key risk mitigation tool. A thorough review of the contract's Performance Work Statement (PWS) and associated risk management plan would provide specific details.

How effective is the 'FULL AND OPEN COMPETITION' strategy likely to be in ensuring value for money for this specific IT support requirement?

The 'FULL AND OPEN COMPETITION' strategy is generally considered the most effective method for ensuring value for money, as it maximizes the pool of potential bidders and fosters a competitive environment. For this IT support contract, its effectiveness hinges on the clarity and completeness of the solicitation documents (e.g., Performance Work Statement) and the agency's ability to attract a sufficient number of qualified and competitive bidders. If the solicitation accurately defines the government's needs and the evaluation criteria are objective, competition should drive down prices and encourage innovative solutions. However, if the requirements are overly complex or niche, the number of truly competitive bidders might be limited, potentially reducing the realized benefits of open competition.

What are the historical spending patterns for IT operational support within HHS's OCIO and OS, and how does this award fit?

Analyzing historical spending patterns for IT operational support within HHS's OCIO and OS is crucial to contextualize this $27.5 million award. This involves examining previous contract values, durations, and awarded contractors for similar services over the last 5-10 years. Understanding whether spending has been consistent, increasing, or decreasing can reveal trends in IT investment and operational needs. This new award should be compared against these historical figures to determine if it represents a significant increase, a continuation of previous levels, or a shift in strategy. Factors such as technological advancements, changes in agency size or mission, and budget allocations would influence these patterns and help assess the appropriateness of the current award amount.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - IT MANAGEMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Futron, Incorporated

Address: 14067 CROWN CT, WOODBRIDGE, VA, 22193

Business Categories: Category Business, DoT Certified Disadvantaged Business Enterprise, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $27,478,435

Exercised Options: $27,478,435

Current Obligation: $27,478,435

Actual Outlays: $22,259,646

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q12NSD0010

IDV Type: IDC

Timeline