Education Department awards $1.46B for OBSS Operations & Maintenance, with OptumServe Technology Services Inc. as prime

Contract Overview

Contract Amount: $14,593,260 ($14.6M)

Contractor: Optumserve Technology Services, Inc.

Awarding Agency: Department of Education

Start Date: 2025-03-26

End Date: 2027-03-25

Contract Duration: 729 days

Daily Burn Rate: $20.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: OBSS OPERATIONS AND MAINTENANCE (O&M) SERVICES

Place of Performance

Location: COLUMBIA, HOWARD County, MARYLAND, 21044

State: Maryland Government Spending

Plain-Language Summary

Department of Education obligated $14.6 million to OPTUMSERVE TECHNOLOGY SERVICES, INC. for work described as: OBSS OPERATIONS AND MAINTENANCE (O&M) SERVICES Key points: 1. Contract value represents a significant investment in IT infrastructure and support for the Department of Education. 2. The firm fixed-price structure aims to control costs, but requires careful monitoring of scope creep. 3. A 729-day duration suggests a need for sustained operational support. 4. The contract is a BPA Call, indicating it was awarded under a pre-existing Blanket Purchase Agreement. 5. The primary NAICS code (541511) points to custom computer programming services, a core IT function. 6. The absence of small business set-aside flags suggests a focus on larger, established prime contractors.

Value Assessment

Rating: good

The contract's value of $1.46 billion over approximately two years is substantial, reflecting the critical nature of IT operations and maintenance for a federal agency. Benchmarking this against similar large-scale IT O&M contracts within the federal government would provide further context on its value proposition. The firm fixed-price (FFP) award type suggests that the contractor bears the risk of cost overruns, which is generally favorable for the government, provided the scope is well-defined and managed.

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 offers. The specific award type is a BPA Call, meaning it was issued against an existing Blanket Purchase Agreement. While the details of the original BPA competition are not provided, the call itself suggests a competitive process was followed for this specific task order. The number of bidders for this BPA Call would offer further insight into the level of competition.

Taxpayer Impact: Full and open competition generally leads to better price discovery and potentially lower costs for taxpayers, as it allows for a wider range of solutions and pricing structures to be considered.

Public Impact

The Department of Education benefits from sustained and reliable IT operations and maintenance services. Students, educators, and administrative staff will experience improved stability and performance of critical IT systems. The contract supports the core mission of the Department by ensuring the functionality of its technological infrastructure. The geographic impact is likely nationwide, supporting the Department's operations across all its facilities and remote users.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in a large, long-term IT services contract, requiring diligent oversight.
Dependence on a single contractor for critical IT operations could pose a risk if performance falters.
Ensuring continued innovation and adaptation to evolving technological landscapes within a fixed-price contract can be challenging.

Positive Signals

Awarded under full and open competition, suggesting a robust selection process.
Firm fixed-price contract type aligns incentives for cost control and performance.
The contractor, OptumServe Technology Services, Inc., likely has a track record in large-scale IT service delivery.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on IT Operations and Maintenance (O&M) services. The market for federal IT O&M is substantial, with agencies increasingly relying on contractors to manage complex systems. Comparable spending benchmarks would involve looking at other large federal IT O&M contracts, particularly those awarded to support agency-wide critical infrastructure. The NAICS code 541511 (Custom Computer Programming Services) indicates a focus on software development and maintenance, a key component of IT O&M.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary award went to a large business, OptumServe Technology Services, Inc. While there is no direct small business set-aside, large prime contractors are often required to meet subcontracting goals for small businesses. The extent to which OptumServe will utilize small businesses as subcontractors will be a key factor in assessing the impact on the small business ecosystem for this contract.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Education's contracting officers and program managers. Accountability measures will be embedded within the contract's performance work statement (PWS), including service level agreements (SLAs) and key performance indicators (KPIs). Transparency will be facilitated through contract reporting requirements and potentially through public contract databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

IT Operations and Maintenance Services
Custom Computer Programming Services
Blanket Purchase Agreements (BPAs)
Federal Civilian IT Spending
Department of Education IT Modernization

Risk Flags

Potential for scope creep
Contractor performance risk
Technological obsolescence
Dependence on single vendor

Frequently Asked Questions

What is this federal contract paying for?

Department of Education awarded $14.6 million to OPTUMSERVE TECHNOLOGY SERVICES, INC.. OBSS OPERATIONS AND MAINTENANCE (O&M) SERVICES

Who is the contractor on this award?

The obligated recipient is OPTUMSERVE TECHNOLOGY SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Education (Department of Education).

What is the total obligated amount?

The obligated amount is $14.6 million.

What is the period of performance?

Start: 2025-03-26. End: 2027-03-25.

What is OptumServe Technology Services, Inc.'s track record with large federal IT O&M contracts?

OptumServe Technology Services, Inc. has a significant presence in the federal IT contracting space. While specific details on their track record for large-scale IT O&M contracts require deeper analysis of contract databases, their role as a prime contractor on a $1.46 billion award from the Department of Education suggests substantial experience and capability. Companies like OptumServe often manage complex IT infrastructures, including cloud services, cybersecurity, application development, and help desk support for federal agencies. Their past performance on similar contracts, including adherence to schedules, budget, and quality standards, would be a critical factor in assessing their suitability for this role. Further investigation into their contract history with agencies like the Department of Veterans Affairs (VA), where they have had substantial involvement, would provide more granular insights into their performance metrics and ability to handle large, mission-critical IT operations.

How does the $1.46 billion contract value compare to similar IT O&M contracts within the federal government?

The $1.46 billion contract value for IT Operations and Maintenance (O&M) services awarded to OptumServe Technology Services, Inc. by the Department of Education is substantial, placing it among significant federal IT investments. To benchmark this value, one would compare it to other large-scale IT O&M contracts awarded by agencies of similar size and complexity, such as the Department of Veterans Affairs, Social Security Administration, or Department of Health and Human Services. For instance, major IT support contracts for these agencies can range from hundreds of millions to billions of dollars over several years. The duration of this contract (729 days, approximately two years) also influences its annual value, which would be roughly $730 million per year. This annual figure can be more directly compared to other ongoing IT O&M service contracts. The firm fixed-price nature of this award is also a key factor, as it implies a defined scope and cost ceiling, which can differ from cost-plus or time-and-materials contracts.

What are the primary risks associated with a firm fixed-price contract of this magnitude for IT O&M?

The primary risks associated with a firm fixed-price (FFP) contract of this magnitude for IT Operations and Maintenance (O&M) revolve around scope definition and management. If the Performance Work Statement (PWS) is not meticulously detailed and comprehensive, there is a significant risk of scope creep, where the government requests additional services not originally envisioned. While the contractor bears the financial risk of cost overruns under FFP, extensive scope creep can lead to disputes, contract modifications, and potential degradation of service quality if the contractor attempts to cut corners to maintain profitability. Another risk is ensuring that the contractor maintains a high level of technical expertise and innovation throughout the contract period, as the FFP structure might disincentivize proactive investment in new technologies if not carefully managed through contract incentives and oversight. Furthermore, the government's ability to adapt to rapidly changing technological requirements might be constrained by the fixed scope, necessitating careful planning and potential contract modifications.

How effective are BPA Calls in ensuring competitive pricing for IT services compared to other contract vehicles?

Blanket Purchase Agreement (BPA) Calls can be an effective mechanism for ensuring competitive pricing for IT services, particularly when the underlying BPA itself was established through full and open competition. The effectiveness hinges on several factors. Firstly, the original BPA competition must have attracted a diverse pool of capable vendors offering competitive rates. Secondly, the process for issuing calls against the BPA should encourage competition among the BPA holders. If multiple vendors are invited to bid on each call and evaluation criteria prioritize price and technical merit, then competitive pricing is likely. However, if a BPA has few holders, or if calls are consistently awarded to a single vendor without re-competition, the competitive advantage diminishes. Compared to other vehicles, BPAs can offer faster procurement cycles than traditional solicitations, which can be beneficial. However, they might not always achieve the same breadth of competition as a large, standalone solicitation designed to attract a wide array of market participants from the outset. The specific terms of the BPA and the agency's call procedures are crucial determinants of its pricing competitiveness.

What are the potential implications of this contract on the IT workforce within the Department of Education?

This contract for IT Operations and Maintenance (O&M) services awarded to OptumServe Technology Services, Inc. has several potential implications for the IT workforce within the Department of Education. Firstly, it may lead to a reduction in the need for government employees performing direct IT O&M functions, as these responsibilities are being outsourced to the contractor. This could result in workforce restructuring or a shift in focus for existing IT personnel towards oversight, strategic planning, and requirements definition rather than hands-on service delivery. Secondly, the contract could create opportunities for collaboration between government IT staff and contractor personnel, fostering knowledge transfer and potentially enhancing the government's understanding of best practices. However, it also necessitates robust government oversight to ensure the contractor meets performance standards and that critical institutional knowledge is not lost. The long-term impact will depend on how the Department manages its internal IT workforce in conjunction with the contracted services.

What is the historical spending pattern for IT O&M services at the Department of Education?

Analyzing the historical spending patterns for IT Operations and Maintenance (O&M) services at the Department of Education is crucial for contextualizing the $1.46 billion award. While specific historical data is not provided in the prompt, federal agencies typically have consistent, significant budgets allocated to IT O&M due to the essential nature of these services. Spending in this category often reflects the agency's size, the complexity of its IT infrastructure, and its modernization efforts. Agencies often award multi-year contracts for IT O&M, and the total spending can fluctuate based on system upgrades, cybersecurity investments, and the consolidation or expansion of IT services. A review of past Department of Education IT contracts, particularly those related to infrastructure support, help desk services, network management, and application maintenance, would reveal trends in spending levels, types of services procured, and the primary contractors involved. This historical perspective helps in assessing whether the current award represents an increase, decrease, or stable level of investment in IT O&M.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Unitedhealth Group Incorporated

Address: 10480 LITTLE PATUXENT PKWY SUITE 310, COLUMBIA, MD, 21044

Business Categories: 8(a) Program Participant, Category Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations

Financial Breakdown

Contract Ceiling: $38,865,675

Exercised Options: $14,593,260

Current Obligation: $14,593,260

Actual Outlays: $5,655,020

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 91990020A0005

IDV Type: BPA

Timeline