HHS awarded $24.18M for data center services, with 3 bidders and a 6-year term

Contract Overview

Contract Amount: $24,177,330 ($24.2M)

Contractor: Companion Data Services LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2007-01-22

End Date: 2013-01-21

Contract Duration: 2,191 days

Daily Burn Rate: $11.0K/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 $24.2 million to COMPANION DATA SERVICES LLC for work described as: ENTERPRISE DATA CENTER SERVICES Key points: 1. The contract achieved a competitive outcome with three bidders, suggesting potential for price discovery. 2. The firm-fixed-price structure aligns costs with performance, offering predictability for the agency. 3. The contract duration of six years provides stability for enterprise data center services. 4. The services fall under Computer Facilities Management, a critical component of IT infrastructure. 5. The award was a delivery order against a larger contract vehicle, indicating a phased approach to procurement. 6. The geographic location in South Carolina may influence local economic and workforce impacts.

Value Assessment

Rating: good

Benchmarking the value of this specific delivery order is challenging without comparable contract data for enterprise data center services during the 2007-2013 period. However, the firm-fixed-price contract type suggests that the contractor assumed the risk for cost overruns, which is generally favorable for the government. The presence of multiple bidders also implies a degree of market validation for the pricing proposed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a competitive delivery order, indicating that it was competed among multiple potential offerors. With three bidders participating, there was a reasonable level of competition, which typically helps in achieving fair market prices. The competitive nature of the award suggests that the Centers for Medicare and Medicaid Services (CMS) sought to leverage market forces to secure the best value.

Taxpayer Impact: The competitive award process is beneficial for taxpayers as it likely resulted in a more favorable price compared to a sole-source or limited competition scenario. The presence of multiple bids provides assurance that public funds were used efficiently.

Public Impact

Beneficiaries include CMS and potentially other Health and Human Services agencies relying on stable data center operations. Services delivered encompass the management and operation of enterprise data centers, crucial for healthcare data processing. The geographic impact is centered in South Carolina, potentially creating or sustaining local IT jobs. Workforce implications include the need for skilled IT professionals in data center management and support within the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if follow-on contracts are not competitively procured.
Dependence on a single contractor for critical data center infrastructure poses operational risks.
Ensuring data security and compliance with evolving regulations over the contract term requires diligent oversight.

Positive Signals

The competitive award process suggests a fair market price was likely achieved.
The firm-fixed-price contract type provides cost certainty for the government.
The six-year duration offers stability and continuity for essential data center services.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on Computer Facilities Management Services. The market for data center services is large and competitive, encompassing colocation, cloud, and managed hosting solutions. This contract represents a portion of the federal government's significant spending on IT infrastructure to support its vast operations, with comparable spending benchmarks varying widely based on service scope and scale.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). As a delivery order against a larger contract vehicle, the subcontracting opportunities for small businesses would depend on the terms of the prime contract and the prime contractor's subcontracting plan. Without specific details on subcontracting, the direct impact on the small business ecosystem is unclear, though larger IT service contracts often include provisions for small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. Accountability measures are embedded in the firm-fixed-price contract type, requiring the contractor to deliver specified services within the agreed-upon price. Transparency is generally maintained through contract award databases, although specific performance metrics and oversight reports may not always be publicly accessible.

Related Government Programs

Federal Data Center Consolidation Initiative
IT Infrastructure Modernization Programs
Cloud Computing Services Contracts
Managed IT Services Contracts

Risk Flags

Potential for vendor lock-in
Operational continuity risk
Data security and compliance
Technological obsolescence

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $24.2 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 $24.2 million.

What is the period of performance?

Start: 2007-01-22. End: 2013-01-21.

What was the contractor's track record prior to this award?

Companion Data Services LLC (CDS) was awarded this delivery order in 2007. Information regarding CDS's specific track record immediately preceding this award would require a deeper dive into their contract history with federal agencies, particularly within the Department of Health and Human Services (HHS). Generally, for a company to win a competitive delivery order of this nature, they would need to demonstrate relevant experience in providing computer facilities management services, a history of successful contract performance, and competitive pricing. Without access to proprietary past performance reviews or detailed contract databases from that era, a comprehensive assessment of their track record is limited. However, winning a competitive bid suggests they met the basic qualifications and presented a compelling offer at the time.

How does the total contract value compare to similar federal data center service contracts?

The total value of $24.18 million over six years equates to approximately $4.03 million per year. Comparing this to similar federal data center service contracts requires careful consideration of the scope, scale, and specific services provided. During the 2007-2013 period, federal agencies were increasingly focused on data center consolidation and modernization. Contracts for enterprise-level data center management could range significantly. A contract of this size might be considered moderate for a large agency like CMS, depending on whether it covered a primary data center, specific services, or a regional facility. Larger, agency-wide contracts could easily reach tens or hundreds of millions annually. Without specific details on the service level agreements (SLAs), infrastructure size, and geographic scope covered by this $24.18M award, a precise benchmark is difficult. However, the competitive nature suggests the pricing was deemed fair market value at the time of award.

What were the primary risks associated with this contract?

The primary risks associated with this enterprise data center services contract would have included operational risks such as service disruptions, data breaches, or failure to meet Service Level Agreements (SLAs). There were also performance risks related to the contractor's ability to manage the complex infrastructure effectively over a six-year period. Financial risks for the government were mitigated by the firm-fixed-price contract type, but risks related to potential cost overruns borne by the contractor could lead to pressure for scope changes or contract modifications. Additionally, technological obsolescence was a risk, as data center technology evolves rapidly; ensuring the infrastructure remained current and efficient over the contract's lifespan would require proactive management and potential upgrades, which needed to be factored into the initial pricing and oversight.

How effective was this contract in meeting CMS's data center needs?

Assessing the effectiveness of this specific contract in meeting CMS's data center needs requires access to performance metrics, customer satisfaction surveys, and post-award reviews, which are not publicly available. However, the contract's duration of six years (2007-2013) suggests a level of satisfaction or at least continuity that allowed the agency to rely on these services for an extended period. The fact that it was a competitive delivery order implies that the initial requirements were well-defined and the selected contractor was deemed capable of meeting them. Effectiveness would ultimately be measured against the agency's operational requirements, uptime guarantees, data security standards, and the overall cost-efficiency of the services provided compared to alternative solutions available at the time.

What were historical spending patterns for similar data center services at CMS?

Historical spending patterns for data center services at CMS prior to and during the 2007-2013 period would likely show a trend towards increasing reliance on robust IT infrastructure to manage vast amounts of healthcare data. Agencies like CMS historically operated significant on-premises data centers. Spending would have been allocated towards hardware, software, maintenance, staffing, and facilities management. The early to mid-2000s also saw the beginnings of federal initiatives like the Data Center Consolidation Initiative (DCCI), encouraging agencies to optimize their data center footprint. Therefore, spending patterns might reflect a mix of maintaining existing infrastructure while exploring consolidation or modernization efforts. This specific $24.18M contract represents a component of that broader spending, likely focused on specific operational needs or a particular facility within CMS.

What is the significance of the NAICS code 541513?

The North American Industry Classification System (NAICS) code 541513 designates 'Computer Facilities Management Services.' This classification is significant because it precisely defines the scope of work for this contract. Companies operating under this code provide on-site management and operation of clients' computer systems, or remotely manage clients' computer systems. Services typically include operating data processing centers, providing computer systems management services, and offering disaster recovery services. For CMS, awarding a contract under this code ensures that the selected vendor possesses the specialized expertise required for the day-to-day functioning, maintenance, and security of their critical data processing infrastructure, ensuring operational continuity and reliability.

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: $24,177,330

Exercised Options: $24,177,330

Current Obligation: $24,177,330

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSM500200600003I

IDV Type: IDC

Timeline