HHS awards $41.7M for computing infrastructure, data processing, and web hosting to Harvard Pilgrim Health Care Inc

Contract Overview

Contract Amount: $41,709,752 ($41.7M)

Contractor: Harvard Pilgrim Health Care Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2016-09-20

End Date: 2023-10-01

Contract Duration: 2,567 days

Daily Burn Rate: $16.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CL::IGF FY16 SENTINEL INFRASTRUCTURE, METHODS&SURVEILLANCE

Place of Performance

Location: WELLESLEY HILLS, NORFOLK County, MASSACHUSETTS, 02481

State: Massachusetts Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $41.7 million to HARVARD PILGRIM HEALTH CARE INC for work described as: IGF::CL::IGF FY16 SENTINEL INFRASTRUCTURE, METHODS&SURVEILLANCE Key points: 1. Value for money appears fair given the long-term nature of the contract and the services provided. 2. Competition dynamics indicate a full and open competition, suggesting potential for competitive pricing. 3. Risk indicators are moderate, with a long contract duration potentially increasing cost escalation risks. 4. Performance context is for essential IT infrastructure services supporting the FDA. 5. Sector positioning is within the broader IT services market, specifically data processing and hosting.

Value Assessment

Rating: fair

The contract's total value of $41.7 million over approximately seven years suggests a moderate annual spend. Benchmarking against similar contracts for computing infrastructure and data processing services is challenging without more granular data on service levels and specific technologies utilized. However, the firm-fixed-price structure generally provides cost certainty for the government. The duration of the contract may allow for economies of scale for the contractor, but also presents a risk of price increases over time if not managed carefully.

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 number of bidders is not specified, but the competitive nature of the award process suggests that multiple companies likely vied for this opportunity. This level of competition is generally expected to drive more favorable pricing and service offerings for the government.

Taxpayer Impact: A full and open competition is beneficial for taxpayers as it increases the likelihood of securing services at competitive market rates, preventing potential overpayment and encouraging efficiency from the awarded contractor.

Public Impact

The primary beneficiaries are the Food and Drug Administration (FDA) and its various programs, which rely on robust IT infrastructure. Services delivered include computing infrastructure, data processing, and web hosting, crucial for data management and operational continuity. The geographic impact is primarily national, supporting federal health initiatives across the United States. Workforce implications are indirect, supporting the federal IT workforce by providing essential backend services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 7 years) could lead to price escalation if not managed proactively.
Lack of specific performance metrics makes it difficult to assess the true value and efficiency of services rendered.
Dependence on a single vendor for critical infrastructure could pose a risk if the vendor faces operational issues.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
Firm-fixed-price contract provides cost certainty for the government.
Long-term nature of the contract may allow for stable service provision and potential for contractor investment in infrastructure.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computing infrastructure, data processing, and web hosting. This market is highly competitive and characterized by rapid technological advancements. The government's spending in this area is substantial, supporting a wide range of agencies and their digital operations. Comparable spending benchmarks would typically involve analyzing the average cost per gigabyte of storage, per hour of compute time, or per user for similar cloud or data center services, which are not detailed here.

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 or specific impacts on the small business ecosystem stemming from a set-aside provision. The prime contractor, Harvard Pilgrim Health Care Inc., is likely a larger entity, and any subcontracting would be at their discretion to meet operational needs.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services' contracting officers and program managers. Transparency is facilitated through contract databases like FPDS. Accountability measures are inherent in the firm-fixed-price contract type, requiring the contractor to deliver specified services. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

HHS IT Infrastructure Support Contracts
FDA Data Management Services
Federal Cloud Computing Services
Government Data Center Operations
Health IT Services

Risk Flags

Long contract duration may lead to technology obsolescence.
Potential for price escalation over the contract term.
Limited visibility into specific performance metrics.
Dependence on a single vendor for critical infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $41.7 million to HARVARD PILGRIM HEALTH CARE INC. IGF::CL::IGF FY16 SENTINEL INFRASTRUCTURE, METHODS&SURVEILLANCE

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 $41.7 million.

What is the period of performance?

Start: 2016-09-20. End: 2023-10-01.

What is the historical spending pattern for computing infrastructure and data processing services by the FDA?

Analyzing historical spending patterns for computing infrastructure and data processing services by the FDA is crucial for understanding trends and justifying current expenditures. While this specific contract represents a significant award of $41.7 million over its duration, a comprehensive view requires examining prior years' budgets and contract awards within these categories. Factors such as the shift towards cloud computing, increasing data volumes, and evolving cybersecurity requirements have likely influenced spending. Without access to detailed historical data for the FDA's IT infrastructure procurements, it's difficult to provide precise figures. However, federal agencies, including the FDA, have generally seen increasing IT expenditures to modernize systems and enhance data analytics capabilities. This contract's value should be assessed against the agency's overall IT budget and the specific needs it addresses, such as supporting critical public health initiatives and regulatory functions.

How does the pricing of this contract compare to similar government or commercial contracts for cloud hosting and data processing?

Directly comparing the pricing of this $41.7 million contract to similar government or commercial contracts is challenging without granular details on the specific services, service level agreements (SLAs), and infrastructure configurations. The contract is for 'Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services' (NAICS 518210) and is a firm-fixed-price award. To benchmark effectively, one would need to break down the costs into components like compute hours, storage capacity, data transfer rates, and managed services. Government contracts, especially those awarded through full and open competition, often aim for competitive pricing. However, long-term contracts can sometimes include escalation clauses or may not reflect the most current market rates if awarded years ago. Commercial cloud providers (e.g., AWS, Azure, Google Cloud) offer various pricing models, and comparing a bundled government contract to these requires careful analysis of equivalent service offerings and volume discounts.

What are the key performance indicators (KPIs) used to measure the success of this contract?

The provided data does not explicitly list the Key Performance Indicators (KPIs) used to measure the success of this contract. Typically, for contracts involving computing infrastructure, data processing, and web hosting, KPIs would focus on aspects such as system uptime and availability (e.g., 99.9% availability), response times for data retrieval and processing, data security compliance (e.g., adherence to FISMA standards), incident response times, and adherence to service level agreements (SLAs). The firm-fixed-price nature of the contract implies that the contractor is obligated to deliver the specified services, and failure to meet agreed-upon performance standards could lead to penalties or contract termination. The effectiveness of the contract is ultimately judged by its ability to provide reliable, secure, and cost-effective IT infrastructure that supports the operational needs of the Food and Drug Administration.

What is Harvard Pilgrim Health Care Inc.'s track record with federal IT service contracts?

Harvard Pilgrim Health Care Inc. (HP) is primarily known as a health insurance provider. While they may have internal IT departments managing their own infrastructure and services, their direct track record as a prime contractor for large-scale federal IT infrastructure, data processing, and web hosting services, particularly for agencies like the FDA, is not widely publicized. It's possible this contract represents a diversification or a specific capability they possess. A thorough assessment would require reviewing their contract history in federal procurement databases to identify past performance, contract types, agencies served, and overall value of awards in the IT services domain. Without this specific data, it's difficult to definitively assess their track record in this particular area, though their status as a large organization suggests they have the capacity to manage complex operations.

What are the potential risks associated with a long-duration contract (over 7 years) for IT infrastructure services?

Long-duration contracts for IT infrastructure services, such as this seven-year award, present several potential risks. Firstly, technology evolves rapidly; a contract signed today might obligate the government to use infrastructure or services that become outdated or less efficient over time. This could lead to a mismatch between contracted capabilities and current technological best practices. Secondly, price escalation is a significant concern. While firm-fixed-price contracts offer initial cost certainty, the longer the term, the greater the potential for market rates to shift, making the contracted price less competitive over time, especially if inflation or increased demand drives up costs for the contractor. Thirdly, vendor lock-in can become a challenge. Migrating critical infrastructure away from a long-term provider can be complex, costly, and disruptive, potentially reducing the government's leverage in future negotiations. Finally, the contractor's own financial stability or strategic direction could change over such a long period, potentially impacting service delivery.

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: $41,709,752

Exercised Options: $41,709,752

Current Obligation: $41,709,752

Actual Outlays: $726,780

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