HHS awards $24M for security operations management, raising value-for-money questions

Contract Overview

Contract Amount: $23,990,750 ($24.0M)

Contractor: CNI Federal Services, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2011-04-08

End Date: 2013-09-11

Contract Duration: 887 days

Daily Burn Rate: $27.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: SECURITY OPERATIONS MANAGEMENT SUPPORT

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $24.0 million to CNI FEDERAL SERVICES, LLC for work described as: SECURITY OPERATIONS MANAGEMENT SUPPORT Key points: 1. The contract's value-for-money is questionable given the lack of competition and the absence of a clear benchmark for the services provided. 2. Competition dynamics were limited, with the contract being awarded on a non-competitive basis. 3. Risk indicators include the potential for inflated costs due to limited competition and the lack of performance data for comparison. 4. Performance context is difficult to assess without comparable contracts or detailed service delivery metrics. 5. The contract falls within the IT services sector, specifically focusing on facilities management. 6. The total award amount of $23,990,749.64 over its duration warrants scrutiny for efficiency.

Value Assessment

Rating: questionable

The total award of approximately $24 million over two years for security operations management support lacks sufficient comparative data to definitively assess value. Without a competitive bidding process, it is difficult to benchmark pricing against market rates or similar government contracts. The absence of detailed performance metrics makes it challenging to evaluate the effectiveness and efficiency of the services rendered for the price paid. Further analysis would be needed to determine if this represents a fair market price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not open to full and open competition. This significantly limits the number of potential bidders and the opportunity for market forces to drive down prices. The justification for a sole-source award would typically involve unique capabilities or circumstances, which are not detailed here. The lack of competition means that the government did not benefit from a range of proposals and pricing strategies.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is less pressure on the contractor to offer competitive pricing. It also reduces transparency in the procurement process.

Public Impact

The primary beneficiary of this contract is the Department of Health and Human Services (HHS), specifically the Food and Drug Administration (FDA). The services delivered are related to security operations management, which is crucial for protecting sensitive data and infrastructure. The geographic impact is centered in Maryland, where the contract is managed. While not explicitly stated, such contracts often involve IT and security personnel, potentially impacting the workforce in these specialized fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding may lead to higher costs.
Absence of detailed performance metrics hinders value assessment.
Sole-source award limits transparency and potential for cost savings.
Contract duration and total value require careful monitoring for efficiency.

Positive Signals

Contract supports critical security operations for a major federal agency.
Services are essential for protecting sensitive government data and systems.
Contract is managed within the specified geographic region.

Sector Analysis

This contract falls within the broader IT services sector, specifically under computer facilities management services. The market for such services is substantial, with numerous government agencies relying on contractors for security operations and IT infrastructure support. Comparable spending benchmarks are difficult to establish without more specific service details and competitive pricing data. However, the trend in federal IT spending is towards specialized support services to maintain and secure complex systems.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a small business set-aside. The award to a large business (implied by the lack of small business designation) means that opportunities for small business participation through subcontracting would depend on the prime contractor's own subcontracting plan, which is not detailed here.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the contracting officer's representative (COR) at the FDA, responsible for monitoring performance and ensuring compliance with contract terms. Accountability measures are inherent in the contract's performance requirements and payment terms. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Security Services
Information Technology Support Services
Computer Facilities Management
Federal IT Procurement
Sole Source Contracts
Department of Health and Human Services Contracts

Risk Flags

Sole Source Award
Lack of Competition
Limited Performance Data
Potential for Cost Overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $24.0 million to CNI FEDERAL SERVICES, LLC. SECURITY OPERATIONS MANAGEMENT SUPPORT

Who is the contractor on this award?

The obligated recipient is CNI FEDERAL SERVICES, LLC.

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 $24.0 million.

What is the period of performance?

Start: 2011-04-08. End: 2013-09-11.

What is the track record of CNI FEDERAL SERVICES, LLC in performing similar security operations management support contracts for the federal government?

Information regarding CNI FEDERAL SERVICES, LLC's specific track record on similar security operations management support contracts is not provided in the data. To assess their performance history, one would need to review past performance evaluations, contract awards, and any reported issues or successes on previous government contracts. A deeper dive into federal procurement databases like SAM.gov or FPDS would be necessary to identify and analyze their prior engagements in this specific service area. Without this information, it's difficult to gauge their experience and reliability for this particular task.

How does the awarded amount of approximately $24 million compare to the market rate for similar security operations management support services?

Directly comparing the $24 million award to market rates is challenging without more specific details about the scope of services, service level agreements, and the specific technologies or methodologies employed. The contract type is Time and Materials, which can be variable. Given the sole-source nature of the award, there is a higher likelihood that the price may not be as competitive as it would be in a fully competed environment. Benchmarking against publicly available data for similar government or commercial contracts, adjusted for contract duration and service complexity, would be the next step in a thorough value assessment. However, the lack of competition inherently limits the ability to establish a definitive market comparison.

What are the primary risks associated with awarding a contract of this magnitude on a sole-source basis?

The primary risks associated with awarding a $24 million contract on a sole-source basis include: 1. Inflated Costs: Without competition, the contractor may not have the same incentive to offer the most competitive pricing, potentially leading to higher costs for the government. 2. Limited Innovation: A sole-source award can stifle innovation as there is no competitive pressure to introduce new or more efficient methods. 3. Reduced Transparency: The procurement process is less transparent, making it harder for external observers to assess fairness and value. 4. Potential for Vendor Lock-in: The agency may become overly reliant on a single provider, making future transitions more difficult and costly. 5. Performance Concerns: While not guaranteed, the absence of competitive pressure could theoretically lead to complacency in performance if not rigorously overseen.

What specific security operations management services are included under this contract, and how is their effectiveness measured?

The provided data identifies the contract as being for 'SECURITY OPERATIONS MANAGEMENT SUPPORT' under NAICS code 541513 (Computer Facilities Management Services). However, the specific details of the services rendered (e.g., network monitoring, incident response, vulnerability management, security policy development) are not itemized. Similarly, the metrics used to measure the effectiveness of these services are not specified. Typically, such contracts would include performance work statements (PWS) outlining deliverables and key performance indicators (KPIs) such as response times, resolution rates, or security posture improvements. Without access to these documents, a precise evaluation of service scope and effectiveness measurement is not possible.

What has been the historical spending pattern for security operations management support at the FDA or HHS?

The provided data only pertains to this specific contract awarded on April 8, 2011, with an end date of September 11, 2013, totaling $23,990,749.64. It does not offer insight into historical spending patterns for similar services at the FDA or HHS. To understand historical spending, one would need to analyze procurement data over multiple fiscal years, identifying all contracts related to security operations management and similar IT support services. This would involve querying databases for relevant NAICS codes, contract descriptions, and agencies over an extended period to identify trends, average contract values, and fluctuations in spending.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Chickasaw Nation (UEI: 070848361)

Address: 2600 JOHN SAXON BLVD STE 2219, NORMAN, OK, 04

Business Categories: 8(a) Program Participant, Category Business, Government, Native American Tribal Government, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, Tribally Owned Firm

Financial Breakdown

Contract Ceiling: $23,990,750

Exercised Options: $23,990,750

Current Obligation: $23,990,750

Parent Contract

Parent Award PIID: HHSF223200850012I

IDV Type: IDC

Timeline