HHS awarded $137M for IT services, with a single delivery order under a full and open competition

Contract Overview

Contract Amount: $136,973,224 ($137.0M)

Contractor: Equinix Government Solutions LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2014-03-01

End Date: 2015-03-31

Contract Duration: 395 days

Daily Burn Rate: $346.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $137.0 million to EQUINIX GOVERNMENT SOLUTIONS LLC for work described as: IGF::OT::IGF Key points: 1. The contract value of $137M represents a significant investment in IT services for CMS. 2. The award was made under a full and open competition, suggesting a broad market search. 3. A single delivery order was issued, which may indicate a focused scope of work or a phased approach. 4. The contract duration of 395 days is relatively short for a project of this magnitude. 5. The fixed-price contract type shifts performance risk to the contractor. 6. The specific NAICS code (541519) points to a broad range of 'Other Computer Related Services'.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific service details. The total award of $137M for a 395-day period suggests a substantial per-day cost. However, comparing it to similar broad IT service contracts requires understanding the specific deliverables. The fixed-price nature is generally favorable for cost control if the scope is well-defined.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit an offer. The data shows one award, which could mean multiple bids were received, but only one was selected, or that the competition resulted in a single viable offer. The level of competition is not explicitly detailed beyond the 'full and open' designation.

Taxpayer Impact: A full and open competition generally promotes price discovery and can lead to more competitive pricing for taxpayers, as multiple vendors vie for the contract.

Public Impact

Beneficiaries include the Centers for Medicare and Medicaid Services (CMS) and potentially healthcare providers and beneficiaries who rely on the IT infrastructure and services supported. Services delivered likely encompass a range of IT support, maintenance, or development activities crucial for CMS operations. The geographic impact is primarily within Maryland, where the contractor is located, but the services support a national agency. Workforce implications could include employment opportunities for IT professionals within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detail on the number of bidders limits assessment of true competition.
The broad NAICS code (541519) makes it difficult to assess if the price is competitive for the specific services rendered.
The short duration relative to the award amount could indicate a high per-diem cost if the work was continuous.

Positive Signals

Awarded under full and open competition, which is a positive signal for market engagement.
Firm Fixed Price contract type helps manage cost certainty for the government.
The contractor, EQUINIX GOVERNMENT SOLUTIONS LLC, is a known entity in government contracting.

Sector Analysis

This contract falls within the broader Information Technology (IT) sector, specifically 'Other Computer Related Services.' The federal IT services market is vast, with agencies like HHS being major spenders. Comparable spending benchmarks would typically involve analyzing other large IT service contracts awarded to support complex government systems, considering factors like service scope, duration, and contractor experience.

Small Business Impact

The data indicates that small business participation was not a primary focus for this specific award, as the 'ss' (small business set-aside) and 'sb' (small business) flags are false. There is no explicit information on subcontracting plans for small businesses. This suggests the contract was likely awarded to a large business or a joint venture, and its impact on the small business ecosystem would depend on whether the prime contractor engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services' internal contracting and program management offices. The Centers for Medicare and Medicaid Services (CMS) would be responsible for monitoring performance and ensuring compliance. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse. Transparency is facilitated through contract databases like FPDS, though detailed performance reports are often internal.

Related Government Programs

CMS IT Modernization Initiatives
Federal Health IT Spending
Government Cloud Computing Services
Cybersecurity Services for Federal Agencies
Data Analytics and Management Services

Risk Flags

Potential for undefined scope given broad NAICS code.
Single delivery order for a large sum may indicate concentrated risk.
Limited information on competition level beyond 'full and open'.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $137.0 million to EQUINIX GOVERNMENT SOLUTIONS LLC. IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is EQUINIX GOVERNMENT SOLUTIONS 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 $137.0 million.

What is the period of performance?

Start: 2014-03-01. End: 2015-03-31.

What specific 'Other Computer Related Services' were provided under this contract?

The provided data identifies the NAICS code as 541519, which broadly covers 'Other Computer Related Services.' This category can encompass a wide array of IT functions beyond standard software development or IT infrastructure management. Examples might include IT consulting, data processing services, computer disaster recovery services, or IT support services not elsewhere classified. Without a detailed statement of work or contract line item details, it is impossible to ascertain the precise nature of the services rendered. This lack of specificity makes it difficult to benchmark the value or assess the contractor's performance against defined objectives.

How does the $137M award compare to similar IT service contracts for CMS or other large federal health agencies?

Comparing this $137M award requires context regarding the contract's duration and scope. For a 395-day period (approximately 13 months), this represents a significant monthly expenditure. Large federal health agencies like CMS often award multi-year, multi-million dollar contracts for IT services, including system development, maintenance, cloud migration, and data analytics. Contracts for enterprise-wide IT support or major system overhauls can easily reach hundreds of millions or even billions over their lifecycle. To make a direct comparison, one would need to identify contracts with similar service descriptions, durations, and agency missions. The 'full and open competition' suggests an attempt to solicit competitive bids, but the final price is highly dependent on the specific technical requirements and market conditions at the time of award.

What is the track record of EQUINIX GOVERNMENT SOLUTIONS LLC in delivering IT services to the federal government?

EQUINIX GOVERNMENT SOLUTIONS LLC has a history of federal contracting. Analyzing their past performance on similar IT service contracts is crucial for assessing risk and reliability. Federal procurement data would reveal their award history, contract values, agencies served, and any reported performance issues or successes. A review of past contracts would indicate their experience with firm-fixed-price awards, full and open competitions, and the specific types of IT services they have provided. Positive past performance indicators would include successful completion of similar projects, positive past performance reviews, and a history of meeting contract requirements on time and within budget. Conversely, any documented performance deficiencies or contract disputes would raise concerns.

What are the potential risks associated with a single delivery order under a full and open competition for this contract value?

A single delivery order, even under a full and open competition, can present risks. If the $137M represents the total value of a single order, it implies a very large, potentially complex scope of work being awarded at once. Risks include potential scope creep if the requirements were not perfectly defined upfront, contractor underestimation of effort leading to performance issues, or the possibility that the single awardee may not have had sufficient competition to drive the most optimal price. Furthermore, if the competition was indeed 'full and open' but resulted in only one offer or one award, it could signal issues with the solicitation, market interest, or the contractor's unique qualifications, potentially limiting future competitive opportunities.

How has federal spending on 'Other Computer Related Services' (NAICS 541519) trended in recent years, and where does this contract fit?

Federal spending on 'Other Computer Related Services' (NAICS 541519) has generally trended upwards, reflecting the increasing reliance of government agencies on specialized IT support, data management, and consulting services. This broad category captures a diverse range of IT needs that don't fit neatly into more specific codes like software development or network management. This $137M contract represents a substantial single award within this category. Its significance is amplified by being awarded to a major health agency (HHS/CMS), which manages critical national healthcare programs. Understanding the trend involves looking at aggregate spending data for this NAICS code across all agencies to see growth patterns and identify major spending areas within it.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: FCISJB980001B

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Verizon Communications Inc (UEI: 107212169)

Address: 22001 LOUDOUN COUNTY PKWY, ASHBURN, VA, 20147

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

Financial Breakdown

Contract Ceiling: $136,973,224

Exercised Options: $136,973,224

Current Obligation: $136,973,224

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F0073U

IDV Type: FSS

Timeline