HHS awarded $351.5M for data center services, with a significant portion going to Companion Data Services LLC

Contract Overview

Contract Amount: $351,528,045 ($351.5M)

Contractor: Companion Data Services LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2007-01-19

End Date: 2014-05-31

Contract Duration: 2,689 days

Daily Burn Rate: $130.7K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ENTERPRISE DATA CENTER SERVICES

Place of Performance

Location: COLUMBIA, RICHLAND County, SOUTH CAROLINA, 29219

State: South Carolina Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $351.5 million to COMPANION DATA SERVICES LLC for work described as: ENTERPRISE DATA CENTER SERVICES Key points: 1. The contract value suggests a substantial investment in enterprise data center infrastructure. 2. The duration of the contract (over 7 years) indicates a long-term need for these services. 3. The award was a delivery order under a larger contract, implying a phased or modular approach to service delivery. 4. The fixed-price contract type suggests that the government aimed to control costs by setting a predetermined price. 5. The services provided fall under Computer Facilities Management, a critical area for government IT operations. 6. The contract was awarded to a single entity, raising questions about the breadth of competition for this specific order.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the scope of services and the duration of the delivery order. However, the total award of over $351 million over approximately 7.5 years indicates a significant financial commitment. Comparing this to similar enterprise data center services contracts would require access to a broader dataset of comparable procurements. The fixed-price nature of the contract suggests an attempt to manage cost certainty, but the overall value-for-money assessment depends heavily on the performance and efficiency delivered by Companion Data Services LLC.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

The provided data indicates this was a 'COMPETITIVE DELIVERY ORDER'. However, the specific competition details, such as the number of bids received for this particular order or the nature of the parent contract's competition, are not fully detailed. If the parent contract was competitively awarded, this delivery order likely benefited from that initial competition. If the delivery order itself was competed among multiple vendors, it suggests a reasonable level of market engagement. Without more information on the bidding process for this specific order, it's difficult to definitively assess the level of competition.

Taxpayer Impact: A competitively awarded delivery order, even if under a larger contract, generally offers better price discovery for taxpayers compared to a sole-source award. This suggests that the government likely received more favorable pricing due to the competitive pressure among potential providers.

Public Impact

Beneficiaries include the Centers for Medicare and Medicaid Services (CMS) and potentially other agencies within HHS that rely on its data infrastructure. Services delivered include the management and operation of enterprise data centers, crucial for hosting and processing sensitive health data. The geographic impact is primarily focused on the location of the data centers managed, with the contract originating from South Carolina. Workforce implications include the employment of IT professionals and support staff by Companion Data Services LLC to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed competition information for the specific delivery order.
Potential for vendor lock-in if the parent contract was not broadly competed.
Dependence on a single contractor for critical data center services.

Positive Signals

The contract was awarded as a 'COMPETITIVE DELIVERY ORDER', suggesting some level of market engagement.
The fixed-price contract type can provide cost predictability.
The long contract duration indicates a stable, ongoing need for these essential services.

Sector Analysis

Enterprise data center services are a critical component of the IT sector, supporting the infrastructure for cloud computing, data storage, and application hosting. The market for these services is large and competitive, with significant spending by both government and private entities. This contract represents a substantial portion of spending within this sub-sector for the Department of Health and Human Services, likely supporting mission-critical functions for CMS. Comparable spending benchmarks would typically involve analyzing the average cost per square foot for data center space, power, cooling, and managed services across similar government and commercial contracts.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract, nor does it detail subcontracting plans. The award to Companion Data Services LLC, a single entity, does not inherently suggest opportunities or challenges for small businesses unless specific subcontracting goals were established. Further investigation into the parent contract and any associated subcontracting requirements would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. Transparency is generally facilitated through contract award databases like FPDS-NG. Accountability measures would be tied to the performance standards outlined in the contract. The Inspector General for HHS would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

HHS Enterprise Data Center Services
CMS IT Infrastructure Support
Federal Data Center Consolidation Initiative
Cloud Computing Services Contracts
IT Facilities Management Contracts

Risk Flags

Competition level for the specific delivery order is not fully detailed.
Performance metrics and historical performance data are not readily available.
Potential for cost overruns if not managed effectively under fixed-price.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $351.5 million to COMPANION DATA SERVICES LLC. ENTERPRISE DATA CENTER SERVICES

Who is the contractor on this award?

The obligated recipient is COMPANION DATA SERVICES LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Medicare and Medicaid Services).

What is the total obligated amount?

The obligated amount is $351.5 million.

What is the period of performance?

Start: 2007-01-19. End: 2014-05-31.

What was the specific nature of the competition for this delivery order, and how many bids were received?

The data indicates this was a 'COMPETITIVE DELIVERY ORDER,' suggesting that multiple vendors were likely considered or invited to bid. However, the exact number of bids received for this specific order is not provided. The parent contract under which this delivery order was issued may have been competitively awarded, which would have established a pool of eligible vendors. Without more granular data on the bidding process for this particular order, it's difficult to fully assess the intensity of the competition and its potential impact on pricing. Further inquiry into the specific solicitation and award documents for this delivery order would be necessary to determine the precise competitive landscape.

How does the per-unit cost of these data center services compare to industry benchmarks or similar government contracts?

Determining a precise per-unit cost benchmark is challenging without detailed service level agreements (SLAs) and specific metrics (e.g., cost per server, cost per terabyte of storage, cost per kilowatt-hour of power). The total award of $351.5 million over approximately 2,689 days (about 7.3 years) provides an average annual spend of roughly $48 million. This figure needs to be contextualized by the scale and scope of the data center operations supported. Comparing this to industry benchmarks would require analyzing the cost of similar managed data center services, including colocation, power, cooling, and network connectivity, adjusted for government-specific requirements and security protocols. Without a breakdown of services and their associated costs, a direct per-unit comparison remains speculative.

What is the track record of Companion Data Services LLC in managing large-scale federal IT contracts, particularly data center services?

Companion Data Services LLC has a history of performing work for the federal government, including significant contracts related to IT and data management. Their involvement in enterprise data center services for CMS indicates a capacity to handle complex and critical infrastructure needs. Assessing their overall track record would involve reviewing past performance evaluations, any documented issues or successes on previous contracts, and their experience with similar government agencies and service requirements. A deeper dive into their contract history, including contract values, durations, and performance ratings, would provide a more comprehensive understanding of their capabilities and reliability in managing large-scale federal IT projects.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract, and how has the contractor performed against them?

The provided data does not specify the key performance indicators (KPIs) or service level agreements (SLAs) that Companion Data Services LLC was required to meet under this contract. These metrics are crucial for evaluating the contractor's performance and ensuring the government receives the expected value. Typically, KPIs for data center services would include uptime guarantees, response times for incidents, security compliance adherence, and capacity management. Without access to the contract's performance clauses and any associated performance reports or reviews, it is impossible to assess how effectively the contractor has met its obligations and delivered on the promised services.

How does the total spending on enterprise data center services by HHS compare to other federal agencies or historical trends?

The $351.5 million awarded to Companion Data Services LLC represents a significant investment by HHS in enterprise data center services. To contextualize this spending, it would be necessary to compare it against the total IT budgets of HHS and other large federal agencies, as well as historical spending trends in federal data center operations. The government has been actively pursuing data center consolidation and modernization initiatives, aiming to reduce costs and improve efficiency. Understanding how this contract aligns with those broader federal IT strategies and comparing HHS's spending on data centers relative to its overall IT portfolio and to peer agencies would provide valuable insights into its relative scale and priorities.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Blue Cross & Blue Shield of South Carolina

Address: I-20 AT ALPINE RD, COLUMBIA, SC, 29219

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $351,598,933

Exercised Options: $351,528,045

Current Obligation: $351,528,045

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSM500200600003I

IDV Type: IDC

Timeline