HHS awarded $116.6M contract for IT infrastructure, data processing, and web hosting services
Contract Overview
Contract Amount: $116,622,567 ($116.6M)
Contractor: Safeguard Services LLC
Awarding Agency: Department of Health and Human Services
Start Date: 2007-09-29
End Date: 2013-09-28
Contract Duration: 2,191 days
Daily Burn Rate: $53.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: MEDIC - ONE PI
Place of Performance
Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244
State: Maryland Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $116.6 million to SAFEGUARD SERVICES LLC for work described as: MEDIC - ONE PI Key points: 1. Contract value of $116.6M over 6 years indicates significant investment in IT support. 2. Full and open competition suggests a robust bidding process, potentially leading to better pricing. 3. The contract's duration of 6 years allows for long-term planning and stable service delivery. 4. Services include computing infrastructure, data processing, and web hosting, crucial for agency operations. 5. The contract is positioned within the IT services sector, supporting essential government functions. 6. Awarded by CMS, a major agency within HHS, highlighting the importance of these services.
Value Assessment
Rating: good
The contract value of $116.6 million over approximately six years averages to about $19.4 million annually. Benchmarking this against similar large-scale IT infrastructure and data processing contracts within federal agencies is challenging without more specific service details. However, the cost-plus-fixed-fee (CPFF) structure suggests that while Safeguard Services LLC is incentivized to control costs, the government bears the risk of cost overruns. The fixed fee component provides some predictability for the contractor's profit.
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 bids. The presence of two bids suggests a moderate level of competition for this significant IT services contract. While two bidders is better than a sole-source award, a higher number of bidders typically leads to more aggressive pricing and a wider range of innovative solutions.
Taxpayer Impact: Full and open competition, even with two bidders, generally benefits taxpayers by encouraging competitive pricing and ensuring that the government receives services at a fair market value.
Public Impact
Beneficiaries include the Centers for Medicare and Medicaid Services (CMS) and, by extension, the millions of individuals who rely on Medicare and Medicaid services. Services delivered are critical for maintaining the operational integrity of CMS's IT systems, including data processing and web hosting. The geographic impact is primarily national, supporting the IT backbone for a federal agency with nationwide reach. Workforce implications include the potential for job creation within Safeguard Services LLC and its subcontractors, as well as the continued employment of federal IT personnel overseeing the contract.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee contracts can lead to higher overall costs if not managed diligently due to the government absorbing cost overruns.
- Limited competition (two bidders) may have resulted in a higher price than if more vendors had participated.
- The specific performance metrics and service level agreements are not detailed, making it difficult to assess the quality of service delivered.
- The contract's duration could lead to vendor lock-in if not structured with clear exit strategies and data portability clauses.
Positive Signals
- Awarded through full and open competition, ensuring a broad search for qualified vendors.
- The fixed-fee component provides a degree of cost certainty for the government regarding contractor profit.
- The contract's length allows for stability and continuity of essential IT services for CMS.
- The vendor, Safeguard Services LLC, has secured a significant federal contract, indicating a level of established capability.
Sector Analysis
This contract falls within the IT services sector, specifically focusing on computing infrastructure, data processing, and web hosting. This is a critical and large market within the federal government, with agencies heavily reliant on robust IT systems to deliver services. Comparable spending benchmarks would involve analyzing other large federal contracts for similar IT support services, often awarded to major IT service providers. The annual value of approximately $19.4 million places this contract in the mid-to-large tier for IT support services.
Small Business Impact
This contract was not set aside for small businesses, nor does it appear to have specific small business subcontracting requirements explicitly stated in the provided data. The award to Safeguard Services LLC, a company that may or may not be a small business itself, suggests that the primary focus was on securing the required IT services through the most competitive means available. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses within the scope of this contract.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Centers for Medicare and Medicaid Services (CMS). Performance monitoring, adherence to the contract terms, and financial oversight are standard accountability measures. Transparency is generally facilitated through contract databases like FPDS-NG, which provide public access to award details. The Inspector General for the Department of Health and Human Services (HHS) would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.
Related Government Programs
- HHS IT Modernization
- CMS Data Center Operations
- Federal Cloud Computing Strategy
- IT Infrastructure Support Services
- Government Data Processing Contracts
Risk Flags
- Potential for cost overruns inherent in CPFF contracts.
- Limited competition may have resulted in a suboptimal price.
- Lack of detailed performance metrics in provided data.
- Dependence on a single contractor for critical IT infrastructure.
Tags
it-services, computing-infrastructure, data-processing, web-hosting, department-of-health-and-human-services, centers-for-medicare-and-medicaid-services, full-and-open-competition, cost-plus-fixed-fee, large-contract, it-support, federal-contract, maryland
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $116.6 million to SAFEGUARD SERVICES LLC. MEDIC - ONE PI
Who is the contractor on this award?
The obligated recipient is SAFEGUARD 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 $116.6 million.
What is the period of performance?
Start: 2007-09-29. End: 2013-09-28.
What is the track record of Safeguard Services LLC in performing similar federal IT contracts?
Safeguard Services LLC has been awarded federal contracts primarily within the IT and administrative support domains. While specific details on past performance for contracts of this magnitude are not immediately available from the provided data, their ability to secure this $116.6 million award from CMS suggests a demonstrated capacity to meet federal requirements. A deeper dive into their contract history, including past performance evaluations and any reported issues on previous awards, would be necessary for a comprehensive assessment of their track record. This would involve reviewing data from sources like the Contractor Performance Assessment Reporting System (CPARS) if available.
How does the value of this contract compare to similar IT infrastructure contracts awarded by CMS or HHS?
The total contract value of $116.6 million over approximately six years, averaging around $19.4 million annually, positions this as a significant IT services contract. To compare effectively, one would need to analyze other CMS and HHS contracts for computing infrastructure, data processing, and web hosting services awarded within a similar timeframe. Factors such as contract duration, scope of services, and the specific IT environment (e.g., cloud vs. on-premise) are crucial for a meaningful comparison. Generally, large federal agencies like CMS award numerous multi-million dollar IT contracts annually, and this award appears to be within the expected range for comprehensive IT support.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract structure for IT services?
The primary risk with a Cost Plus Fixed Fee (CPFF) contract is that the government bears the risk of cost overruns. While the contractor is incentivized to perform efficiently to achieve their fixed fee, if the actual costs of performing the work exceed the estimated costs, the government is obligated to pay those actual costs plus the agreed-upon fixed fee. This can lead to the total contract cost being higher than initially anticipated. For IT services, risks include scope creep, unforeseen technical challenges, and changes in technology that may increase costs. Effective oversight and clear definition of work are crucial to mitigate these risks.
How does the 'full and open competition' with only two bidders impact price discovery and value for money?
While 'full and open competition' is the preferred method for ensuring broad market access, having only two bidders limits the extent of price discovery and potential value for money. Ideally, a larger number of bidders would create a more competitive environment, driving down prices and encouraging innovative solutions. With only two offers, the government may not achieve the lowest possible price, as the competition is less intense. However, it is still superior to sole-source or limited competition scenarios, as it at least introduces a comparative element. The government's negotiation strategy and the specific capabilities of the two bidders would heavily influence the final price and value obtained.
What are the potential implications of this contract on the broader IT services market for federal agencies?
This contract signifies continued government investment in core IT infrastructure and data processing services, areas that remain critical for agency operations. The award to Safeguard Services LLC, through full and open competition, suggests that established providers with demonstrated capabilities are favored for these essential functions. It also highlights the ongoing need for vendors capable of managing complex IT environments. The success or challenges encountered with this contract could influence future procurement strategies for similar services, potentially impacting how agencies approach competition, contract structures (like CPFF), and vendor selection in the IT services space.
What is the historical spending pattern for computing infrastructure, data processing, and web hosting services at CMS?
Historical spending patterns for computing infrastructure, data processing, and web hosting services at CMS are substantial, reflecting the agency's critical role in managing vast amounts of healthcare data. CMS consistently procures significant IT support to maintain its systems, which underpin programs like Medicare and Medicaid. Analyzing past contract awards for similar services would reveal trends in spending levels, the types of technologies employed (e.g., on-premise data centers vs. cloud migration), and the dominant contractors in this space. This specific $116.6 million award fits within a larger, ongoing investment by CMS in its IT infrastructure over many years.
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
Offers Received: 2
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 5400 LEGACY DRIVE, PLANO, TX, 90
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $116,622,567
Exercised Options: $116,622,567
Current Obligation: $116,622,567
Parent Contract
Parent Award PIID: HHSM500200500011I
IDV Type: IDC
Timeline
Start Date: 2007-09-29
Current End Date: 2013-09-28
Potential End Date: 2013-09-28 00:00:00
Last Modified: 2013-01-31
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