HHS awarded $34.8M to HP Enterprise Services for Medicare Claims Data Center support

Contract Overview

Contract Amount: $34,856,272 ($34.9M)

Contractor: HP Enterprise Services, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2006-12-01

End Date: 2009-11-30

Contract Duration: 1,095 days

Daily Burn Rate: $31.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MEDICARE CLAIMS DATA CENTER 2

Place of Performance

Location: PLANO, COLLIN County, TEXAS, 75024

State: Texas Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $34.9 million to HP ENTERPRISE SERVICES, LLC for work described as: MEDICARE CLAIMS DATA CENTER 2 Key points: 1. Contract value appears reasonable given the duration and scope of IT infrastructure support. 2. Full and open competition suggests a competitive pricing environment. 3. Potential risks include vendor lock-in and the need for ongoing performance monitoring. 4. This contract supported critical healthcare IT infrastructure for Medicare. 5. The award falls within the broader IT services sector for government agencies.

Value Assessment

Rating: good

The contract value of approximately $34.8 million over three years for IT infrastructure support for the Medicare Claims Data Center appears to be within a reasonable range for a federal contract of this nature. Benchmarking against similar large-scale IT service contracts awarded by HHS or other agencies for data center operations and maintenance would provide a more precise value-for-money assessment. However, the fixed-price nature of the contract suggests that the government has a defined cost ceiling, which is a positive indicator for cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that multiple vendors were likely invited to bid. The presence of two bidders suggests a degree of competition, though a higher number of bidders would typically lead to more aggressive pricing. The specific details of the bidding process and the evaluation criteria would further illuminate the effectiveness of the competition in driving down costs.

Taxpayer Impact: The full and open competition likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition award. This process ensures that the government explores a wider range of potential solutions and pricing structures.

Public Impact

Beneficiaries include Medicare beneficiaries who rely on accurate and timely processing of claims. Services delivered include the operation and maintenance of critical IT infrastructure for the Medicare Claims Data Center. Geographic impact is national, supporting the administration of the Medicare program across the United States. Workforce implications include the need for skilled IT professionals to manage and maintain the data center infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if transition planning is inadequate.
Reliance on a single contractor for critical IT infrastructure could pose a risk if performance degrades.
Ensuring continued alignment with evolving cybersecurity standards requires diligent oversight.

Positive Signals

Awarded through full and open competition, indicating a competitive process.
Firm Fixed Price contract type provides cost certainty for the government.
Long-term contract duration suggests a stable and ongoing need for these services.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, specifically focusing on government IT infrastructure management and data center operations. The market for government IT services is substantial, with agencies consistently investing in maintaining and modernizing their technological capabilities. Comparable spending benchmarks would involve looking at other large federal contracts for data center support, cloud migration, or IT infrastructure outsourcing, which often run into tens or hundreds of millions of dollars.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the primary contractor, HP Enterprise Services, LLC, is likely a large business. There is no explicit information on subcontracting plans for small businesses within this data snippet. The impact on the small business ecosystem would depend on whether HP Enterprise Services engaged small businesses as subcontractors for specialized services, which is not detailed here.

Oversight & Accountability

Oversight for this contract would typically be managed by the Centers for Medicare and Medicaid Services (CMS) through contract officers and technical representatives. Accountability measures are inherent in the firm-fixed-price contract structure, with performance expectations tied to payment. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.

Related Government Programs

Medicare Program Integrity
Healthcare IT Modernization
Federal Data Center Consolidation Initiative
CMS IT Infrastructure Support Contracts

Risk Flags

Potential for vendor lock-in
Cybersecurity vulnerabilities
Performance degradation risk
Adequacy of competition level

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $34.9 million to HP ENTERPRISE SERVICES, LLC. MEDICARE CLAIMS DATA CENTER 2

Who is the contractor on this award?

The obligated recipient is HP ENTERPRISE 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 $34.9 million.

What is the period of performance?

Start: 2006-12-01. End: 2009-11-30.

What was the specific nature of the IT infrastructure support provided under this contract?

This contract, awarded to HP Enterprise Services, LLC, for approximately $34.8 million, focused on supporting the Medicare Claims Data Center. The services likely encompassed a range of IT infrastructure operations and maintenance activities. This would typically include managing servers, storage, networking equipment, and ensuring the availability, reliability, and security of the data center environment. The goal was to ensure the continuous and efficient processing of Medicare claims data, which is critical for the functioning of the healthcare system. The firm-fixed-price nature suggests a defined scope of work with specific deliverables and performance standards.

How does the contract value compare to similar federal IT infrastructure support contracts?

The contract value of $34.8 million over three years (1095 days) equates to roughly $11.6 million per year. This figure is moderate for a federal IT infrastructure support contract of this scope, especially for a critical system like the Medicare Claims Data Center. Larger, more complex data center operations or cloud migration projects can easily exceed hundreds of millions of dollars. However, compared to contracts for smaller agencies or less critical systems, this award is substantial. A detailed benchmark analysis would require comparing it to contracts with similar service level agreements (SLAs), security requirements, and the specific technologies managed.

What were the primary risks associated with this contract for the government?

Key risks for the government included potential vendor lock-in, where reliance on HP Enterprise Services could make future transitions to new vendors or technologies difficult and costly. Performance degradation was another risk; if the contractor failed to meet service level agreements (SLAs) for uptime, security, or data integrity, it could disrupt Medicare operations and impact beneficiaries. Cybersecurity threats were also a significant concern, requiring robust security measures from the contractor and diligent oversight from CMS. Finally, cost overruns, although mitigated by the fixed-price structure, could still occur if the scope of work expanded beyond initial projections without proper change order management.

What was the historical spending pattern for Medicare Claims Data Center support prior to this award?

The provided data only details this specific contract (2006-2009). To understand historical spending patterns, one would need to examine contract awards for the Medicare Claims Data Center for periods preceding and following this contract. This would involve querying federal procurement databases for awards made to various contractors for similar services. Analyzing these patterns would reveal trends in contract values, durations, competition levels, and the primary contractors involved over time, helping to contextualize the $34.8 million award within a broader historical perspective of IT infrastructure investment for Medicare.

What is the track record of HP Enterprise Services, LLC in managing large federal IT contracts?

HP Enterprise Services, LLC (now part of DXC Technology) has a long and extensive history of managing large, complex IT contracts for various federal agencies, including the Department of Health and Human Services. They have been a significant player in providing IT infrastructure, cloud services, and application development support. While specific performance details for this particular Medicare contract are not provided, their general track record indicates experience with large-scale government IT projects. However, like any major contractor, they have faced scrutiny and challenges on some contracts, underscoring the importance of robust government oversight and performance management.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: HP, Inc. (UEI: 009122532)

Address: 5400 LEGACY DR, PLANO, TX, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $34,912,317

Exercised Options: $34,856,272

Current Obligation: $34,856,272

Parent Contract

Parent Award PIID: BPA020002

IDV Type: BPA

Timeline