HHS awards $17.7M for EHB Operations & Maintenance to Digital Management LLC, focusing on IT services

Contract Overview

Contract Amount: $17,734,167 ($17.7M)

Contractor: Digital Management LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2024-08-08

End Date: 2025-08-07

Contract Duration: 364 days

Daily Burn Rate: $48.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: OIT-SERVICES40 C 6828 - EHB OPERATIONS & MAINTENANCE (O&M) ENTERPRISE SUPPORT

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $17.7 million to DIGITAL MANAGEMENT LLC for work described as: OIT-SERVICES40 C 6828 - EHB OPERATIONS & MAINTENANCE (O&M) ENTERPRISE SUPPORT Key points: 1. Contract value represents a significant investment in essential IT infrastructure. 2. Competition dynamics suggest a potentially competitive bidding process for this service. 3. Risk indicators are moderate, given the operational nature of the contract. 4. Performance context is tied to maintaining critical health IT systems. 5. Sector positioning is within the broader federal IT services market. 6. The contract duration of one year allows for agile adjustments.

Value Assessment

Rating: good

The contract value of approximately $17.7 million for a one-year period for IT operations and maintenance services appears reasonable when benchmarked against similar federal IT support contracts. While specific per-unit cost data is not provided, the overall award amount suggests a competitive pricing strategy was likely employed given the full and open competition. The scope of work, encompassing enterprise support for Health Resources and Services Administration (HRSA) systems, indicates a need for specialized IT expertise.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors were eligible to bid. The specific number of bidders is not detailed, but the designation suggests a robust competitive environment. This level of competition is generally favorable for price discovery and ensures that the government can select from a wide range of qualified offerors, potentially leading to better value.

Taxpayer Impact: Taxpayers benefit from a process that encourages competitive pricing and allows for the selection of the most capable and cost-effective provider for essential IT operations.

Public Impact

The primary beneficiaries are the Health Resources and Services Administration (HRSA) and its stakeholders, who rely on stable and efficient IT systems. Services delivered include operations and maintenance for the Enterprise Health Benefits (EHB) system, ensuring its continued functionality. The geographic impact is primarily within the federal government's IT infrastructure, supporting national health initiatives. Workforce implications include the potential for Digital Management LLC to utilize skilled IT professionals for system support and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if follow-on contracts are not competitively bid.
Reliance on a single vendor for critical IT operations could pose a risk if performance falters.

Positive Signals

Awarded through full and open competition, suggesting a competitive market.
Firm Fixed Price contract type helps control costs and manage budget predictability.
Digital Management LLC's role in IT operations and maintenance indicates established capabilities.

Sector Analysis

The federal IT services sector is a large and dynamic market, with agencies consistently seeking support for a wide array of digital infrastructure and software solutions. Contracts for operations and maintenance (O&M) are crucial for ensuring the continuity and reliability of government IT systems. Spending in this category is driven by the need to maintain legacy systems, modernize infrastructure, and support mission-critical applications. Comparable spending benchmarks for IT O&M contracts vary widely based on system complexity and scope, but this award falls within a typical range for enterprise-level support.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. The award to a single entity, Digital Management LLC, suggests that the primary focus was on securing comprehensive IT operations and maintenance services. Further analysis would be needed to determine if small businesses are involved in the supply chain or as subcontractors to the prime awardee.

Oversight & Accountability

Oversight for this contract will likely be managed by the Health Resources and Services Administration (HRSA) contracting officers and program managers. Accountability measures are typically embedded within the contract's performance work statement, outlining specific deliverables and service level agreements. Transparency is facilitated through federal procurement databases where contract awards are reported. The Inspector General's office for the Department of Health and Human Services may conduct audits or investigations if performance issues or concerns arise.

Related Government Programs

Federal IT Operations and Maintenance Contracts
Health IT Modernization Programs
Enterprise Resource Planning (ERP) System Support
Cloud Computing Services for Government Agencies
Cybersecurity Support Services

Risk Flags

Potential for performance issues impacting critical health IT systems.
Reliance on a single vendor for essential IT operations.
Cybersecurity vulnerabilities if not adequately managed.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $17.7 million to DIGITAL MANAGEMENT LLC. OIT-SERVICES40 C 6828 - EHB OPERATIONS & MAINTENANCE (O&M) ENTERPRISE SUPPORT

Who is the contractor on this award?

The obligated recipient is DIGITAL MANAGEMENT LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Health Resources and Services Administration).

What is the total obligated amount?

The obligated amount is $17.7 million.

What is the period of performance?

Start: 2024-08-08. End: 2025-08-07.

What is the track record of Digital Management LLC in delivering similar IT operations and maintenance services to federal agencies?

Digital Management LLC has a history of performing IT services for federal agencies. While specific details on their track record for EHB Operations & Maintenance (O&M) are not provided in this data snippet, their award for this contract suggests they possess the necessary qualifications and experience. A deeper dive into their past performance evaluations, contract history with agencies like HHS or HRSA, and any reported issues or successes would provide a more comprehensive understanding of their capabilities and reliability in delivering complex IT O&M solutions. Examining their portfolio of similar contracts, particularly those involving enterprise-level systems and critical infrastructure, would be crucial for assessing their suitability.

How does the awarded amount of $17.7 million compare to historical spending on EHB Operations & Maintenance?

Without historical spending data specifically for EHB Operations & Maintenance (O&M) from HRSA, a direct comparison is challenging. However, the $17.7 million award for a one-year duration provides a benchmark for current market rates and the agency's investment in this critical IT function. To assess historical trends, one would need to analyze previous contract awards for similar services, potentially looking at contracts awarded to different vendors or previous contracts awarded to Digital Management LLC for the same or related systems. Factors such as scope changes, inflation, and technological advancements would need to be considered when making historical comparisons to understand if this award represents an increase, decrease, or stable level of investment.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

The provided data does not specify the key performance indicators (KPIs) or service level agreements (SLAs) for this contract. Typically, IT Operations & Maintenance (O&M) contracts include detailed SLAs related to system uptime, response times for issue resolution, patch management, security compliance, and data integrity. KPIs would likely measure the contractor's adherence to these SLAs, overall system performance, and user satisfaction. These metrics are crucial for ensuring the effective delivery of services and holding the contractor accountable. A thorough review of the contract's Performance Work Statement (PWS) would be necessary to identify the specific KPIs and SLAs governing this award.

What is the potential impact of this contract on the broader federal IT services market, particularly for competitors?

This contract award to Digital Management LLC, under full and open competition, signals a healthy competitive environment within the federal IT services market for O&M. For competitors, it indicates that HRSA is actively seeking and evaluating proposals from various vendors for critical IT support. The success of Digital Management LLC in securing this contract may influence their market position and future bidding strategies. It also highlights the ongoing demand for specialized IT O&M services within federal health agencies, potentially encouraging other firms to enhance their capabilities in this area to compete for similar future opportunities. The competitive nature of the award suggests that pricing and technical solutions are key differentiators.

Are there any specific cybersecurity requirements or risks associated with the EHB Operations & Maintenance contract?

While the provided data does not detail specific cybersecurity requirements, any contract involving federal IT systems, especially those related to health benefits (EHB), inherently carries significant cybersecurity considerations. The contractor, Digital Management LLC, would be expected to adhere to stringent federal cybersecurity standards, such as those mandated by NIST (National Institute of Standards and Technology) and agency-specific policies. Risks could include potential data breaches, unauthorized access, or system vulnerabilities. The contract likely includes clauses addressing data protection, incident response, and compliance with security protocols. Continuous monitoring and robust security measures are paramount to mitigate these risks and protect sensitive health information.

Industry Classification

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

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

Solicitation ID: 75R60224Q00223

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6550 ROCK SPRING DR, BETHESDA, MD, 20817

Business Categories: Category Business, Limited Liability Corporation, Minority Owned Business, Not Designated a Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $17,734,167

Exercised Options: $17,734,167

Current Obligation: $17,734,167

Actual Outlays: $17,734,166

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 75R60224A00036

IDV Type: BPA

Timeline