HHS Awards $99.4M IBM ELA Recompete to Four LLC Under Full and Open Competition

Contract Overview

Contract Amount: $99,400,000 ($99.4M)

Contractor: Four LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2016-12-31

End Date: 2018-12-30

Contract Duration: 729 days

Daily Burn Rate: $136.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF INTERNATIONAL BUSINESS MACHINES (IBM) ENTERPRISE LICENSE AGREEMENT (ELA)RECOMPETE

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $99.4 million to FOUR LLC for work described as: IGF::OT::IGF INTERNATIONAL BUSINESS MACHINES (IBM) ENTERPRISE LICENSE AGREEMENT (ELA)RECOMPETE Key points: 1. The contract is a recompete for an Enterprise License Agreement (ELA) for IBM software. 2. Four LLC was awarded the contract, indicating potential new vendor entry or a shift in prime contractor. 3. The contract value is substantial at $99.4 million, suggesting significant software needs. 4. The Software Publishers sector (NAICS 511210) is characterized by high innovation and evolving licensing models.

Value Assessment

Rating: fair

The contract value of $99.4 million for a 2-year period needs to be benchmarked against similar IBM ELA recompetes. Without specific unit pricing or detailed scope, a precise value assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which generally promotes competitive pricing. However, the specific pricing mechanisms and the number of bidders would determine the extent of price discovery.

Taxpayer Impact: Full and open competition aims to secure the best value for taxpayers by allowing all eligible vendors to compete, potentially leading to cost savings.

Public Impact

Taxpayers benefit from competitive bidding processes that aim to reduce costs for essential software. Government agencies rely on enterprise agreements for predictable software costs and access to updates. The recompete nature suggests a need for continued IBM software support and potential for updated licensing terms.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics.
Potential for vendor lock-in with enterprise software.
Need to verify cost-effectiveness against alternative solutions.

Positive Signals

Awarded under full and open competition.
Clear contract type (Firm Fixed Price) for budget predictability.
Recompete indicates established need and potential for streamlined award.

Sector Analysis

The Software Publishers sector is dynamic, with companies like IBM offering complex licensing structures. Benchmarking against other large government ELAs for similar software suites is crucial for value assessment.

Small Business Impact

This contract appears to be a large enterprise agreement, likely dominated by the prime contractor. Opportunities for small businesses may exist as subcontractors, but this is not explicitly detailed.

Oversight & Accountability

Oversight would focus on contract performance, adherence to licensing terms, and ensuring the software meets the Centers for Medicare and Medicaid Services' operational requirements throughout the contract period.

Related Government Programs

Software Publishers
Department of Health and Human Services Contracting
Centers for Medicare and Medicaid Services Programs

Risk Flags

Potential for cost overruns if licensing terms are not fully understood.
Risk of vendor lock-in and difficulty switching providers.
Dependence on a single vendor for critical software.
Need for robust asset management to track software usage and compliance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $99.4 million to FOUR LLC. IGF::OT::IGF INTERNATIONAL BUSINESS MACHINES (IBM) ENTERPRISE LICENSE AGREEMENT (ELA)RECOMPETE

Who is the contractor on this award?

The obligated recipient is FOUR 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 $99.4 million.

What is the period of performance?

Start: 2016-12-31. End: 2018-12-30.

What is the specific breakdown of software and services included in this $99.4 million ELA, and how does it compare to previous agreements?

The provided data does not detail the specific software and services within the ELA. A breakdown is essential for a thorough value assessment. Comparing it to previous agreements would reveal if the scope has expanded, contracted, or remained consistent, impacting the perceived value and cost-effectiveness for the government.

How was the 'full and open competition' process managed to ensure genuine price discovery and avoid potential vendor collusion?

Full and open competition implies that all responsible sources were permitted to submit offers. Effective management involves clear solicitation requirements, objective evaluation criteria, and a transparent process. Price discovery is maximized when multiple competitive bids are received and evaluated rigorously against a defined baseline, ensuring the government secures the most advantageous pricing.

What mechanisms are in place to ensure the ongoing effectiveness and relevance of the IBM software suite over the contract's two-year duration?

Effectiveness is typically ensured through performance work statements, service level agreements (SLAs), and regular vendor performance reviews. For software, this includes access to updates, patches, and technical support. The government should have processes to track software utilization and ensure it aligns with evolving agency needs, potentially including options for early termination if the software becomes obsolete or less effective.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HHSM5002017RFQ0001

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2303 DULLES STATION BLVD STE 105, HERNDON, VA, 20170

Business Categories: Category Business, Limited Liability Corporation, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $99,400,000

Exercised Options: $99,400,000

Current Obligation: $99,400,000

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS35F0312U

IDV Type: FSS

Timeline