HHS awards $31.6M for computing infrastructure, data processing, and web hosting to Harvard Pilgrim Health Care Inc

Contract Overview

Contract Amount: $31,625,000 ($31.6M)

Contractor: Harvard Pilgrim Health Care Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2014-09-18

End Date: 2019-09-21

Contract Duration: 1,829 days

Daily Burn Rate: $17.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CT::IGF CORE SENTINEL ACTIVITIES

Place of Performance

Location: WELLESLEY HILLS, NORFOLK County, MASSACHUSETTS, 02481

State: Massachusetts Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $31.6 million to HARVARD PILGRIM HEALTH CARE INC for work described as: IGF::CT::IGF CORE SENTINEL ACTIVITIES Key points: 1. The contract value of $31.6 million over five years suggests a significant investment in essential IT services. 2. The fixed-price contract type indicates a clear understanding of project scope and cost, potentially mitigating cost overrun risks. 3. The award was made under full and open competition, implying a robust selection process and potential for competitive pricing. 4. The services procured fall under the 'Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services' NAICS code, a common area for federal IT spending. 5. The contract duration of 1829 days (approximately 5 years) aligns with typical IT service agreements for sustained operational support. 6. The absence of small business set-aside flags suggests this contract was not specifically targeted to boost small business participation.

Value Assessment

Rating: good

The contract value of $31.6 million over five years for computing infrastructure and related services appears reasonable given the scope. Benchmarking against similar large-scale IT service contracts for federal agencies would provide a more precise value-for-money assessment. The firm fixed-price structure suggests that the pricing was determined upfront and is less susceptible to cost escalations, 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, indicating that all responsible sources were permitted to submit a bid. The specific number of bidders is not provided, but the 'full and open' designation generally suggests a competitive environment that allows for price discovery and selection of the best value offer.

Taxpayer Impact: A competitive bidding process for essential IT services like computing infrastructure helps ensure that taxpayer dollars are used efficiently and that the government secures services at a fair market price.

Public Impact

The primary beneficiaries are the agencies within the Department of Health and Human Services (HHS) that rely on robust computing infrastructure and data processing capabilities. The services delivered include essential IT functions such as data processing, web hosting, and computing infrastructure provision, crucial for agency operations. The geographic impact is likely nationwide, supporting the operational needs of a federal agency with a broad reach. The contract supports the IT workforce within Harvard Pilgrim Health Care Inc. and potentially its subcontractors, contributing to employment in the technology sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if transition to a new provider is complex or costly.
Reliance on a single vendor for critical IT infrastructure could pose risks if the vendor experiences service disruptions.
Ensuring ongoing cost-effectiveness over the five-year term requires diligent performance monitoring.

Positive Signals

The firm fixed-price contract provides cost certainty for the government.
Awarding under full and open competition suggests a thorough evaluation process and selection of a capable provider.
The five-year duration allows for stable service delivery and operational continuity.

Sector Analysis

The federal IT services market is vast and highly competitive, with significant spending on cloud computing, data processing, and infrastructure hosting. This contract fits within the broader trend of federal agencies outsourcing IT operations to specialized providers to enhance efficiency and access advanced technologies. Comparable spending benchmarks for similar cloud hosting and data processing contracts can range widely based on scale and service level agreements.

Small Business Impact

The contract does not indicate any specific small business set-aside provisions. This means that the competition was open to all eligible businesses, and there was no explicit requirement for a portion of the work to be subcontracted to small businesses. The impact on the small business ecosystem is neutral unless the prime contractor voluntarily engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically be managed by the Food and Drug Administration (FDA) contracting officers and program managers within HHS. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified services. Transparency is generally maintained through contract award databases, though specific performance metrics and detailed oversight activities are often internal.

Related Government Programs

HHS IT Modernization Initiatives
Federal Cloud Computing Strategy
FDA IT Infrastructure Support Contracts
Data Center Consolidation Programs

Risk Flags

Vendor capability assessment needed for non-traditional IT service provider.
Cybersecurity compliance and monitoring.
Performance metrics and SLA adherence.
Long-term cost-effectiveness and potential for price increases upon renewal.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $31.6 million to HARVARD PILGRIM HEALTH CARE INC. IGF::CT::IGF CORE SENTINEL ACTIVITIES

Who is the contractor on this award?

The obligated recipient is HARVARD PILGRIM HEALTH CARE INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $31.6 million.

What is the period of performance?

Start: 2014-09-18. End: 2019-09-21.

What is the track record of Harvard Pilgrim Health Care Inc. in delivering federal IT services?

Harvard Pilgrim Health Care Inc. is primarily known as a health insurance provider. While they may have internal IT capabilities to manage their own operations, their experience as a direct federal IT service contractor, particularly for large-scale computing infrastructure, data processing, and web hosting, is less established compared to dedicated IT service firms. Further investigation into their specific federal contract history, performance reviews, and any past IT-related awards would be necessary to fully assess their track record in this domain. The nature of this award, being a delivery order under a larger contract vehicle (implied by 'MA' for Massachusetts state, potentially a state-specific contract or a GSA Schedule), might indicate a specific niche or a partnership rather than a direct, large-scale federal IT service provision.

How does the $31.6 million contract value compare to similar federal IT service contracts?

The $31.6 million contract value over five years, averaging approximately $6.32 million per year, falls within a moderate range for federal IT service contracts. Large federal agencies often award multi-billion dollar contracts for comprehensive IT solutions. However, for specific services like computing infrastructure, data processing, and web hosting, this amount can represent a significant procurement, especially if it serves a critical function or a specific division within HHS. To provide a precise comparison, one would need to benchmark against contracts with similar NAICS codes (518210), contract types (firm fixed-price), and durations, while also considering the specific service level agreements and the size/scope of the supported agency component. Contracts for enterprise-wide cloud services or data center management can easily exceed hundreds of millions or billions.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks include potential vendor performance issues, cybersecurity vulnerabilities, and the possibility of cost increases if the scope expands beyond the initial fixed-price agreement (though less likely with FFP). Mitigations are typically embedded in the contract through performance standards, service level agreements (SLAs), and reporting requirements. The government's ability to monitor performance, conduct audits, and potentially exercise contract clauses for non-performance are crucial. Cybersecurity is managed through adherence to federal standards (e.g., NIST, FISMA) and specific security requirements outlined in the contract. The firm fixed-price nature inherently mitigates cost overrun risks, assuming the scope is well-defined and managed.

How effective is the 'full and open competition' process in ensuring value for this type of IT service?

Full and open competition is generally considered the most effective method for ensuring value in federal procurements, including IT services. It allows a wide range of qualified vendors to compete, driving down prices through market forces and encouraging innovation. For computing infrastructure, data processing, and web hosting, where numerous providers exist, this process helps the government identify the best combination of technical capability and cost. The effectiveness hinges on the clarity of the solicitation requirements, the fairness of the evaluation criteria, and the actual number and quality of bids received. A robust competition should lead to a technically sound solution at a competitive price, maximizing the value for taxpayer dollars.

What are the historical spending patterns for similar IT services within the Department of Health and Human Services?

HHS, like many large federal agencies, has consistently allocated substantial portions of its budget to IT services, including infrastructure, software, and support. Spending on data processing, web hosting, and computing infrastructure has likely seen an upward trend over the years, driven by increasing data volumes, the need for advanced analytics, and the shift towards cloud-based solutions. Historical data would reveal fluctuations based on specific agency needs, modernization efforts, and budget appropriations. Analyzing past contracts for similar services within HHS would provide context on average award values, contract durations, and the prevalence of different contract types and competition levels, helping to assess whether this $31.6 million award aligns with established spending patterns or represents a deviation.

Industry Classification

NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services

Product/Service Code: SPECIAL STUDIES/ANALYSIS, NOT R&D › SPECIAL STUDIES - NOT R and D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 93 WORCESTER ST, WELLESLEY, MA, 02481

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

Financial Breakdown

Contract Ceiling: $31,625,000

Exercised Options: $31,625,000

Current Obligation: $31,625,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HHSF223201400030I

IDV Type: IDC

Timeline