HHS awarded $19.6M for IT infrastructure, data processing, and web hosting to Companion Data Services LLC

Contract Overview

Contract Amount: $19,626,625 ($19.6M)

Contractor: Companion Data Services LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2013-01-22

End Date: 2018-07-21

Contract Duration: 2,006 days

Daily Burn Rate: $9.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 9

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CT::IGF IT AND TELECOM- OTHER IT AND TELECOMMUNICATIONS

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $19.6 million to COMPANION DATA SERVICES LLC for work described as: IGF::CT::IGF IT AND TELECOM- OTHER IT AND TELECOMMUNICATIONS Key points: 1. The contract value represents a significant investment in essential IT services for the Centers for Medicare and Medicaid Services (CMS). 2. Competition dynamics for this contract appear robust, with 9 bidders vying for the award, suggesting a healthy market. 3. The fixed-price contract type may offer cost certainty, but requires careful monitoring to ensure value for money. 4. Performance duration spans over five years, indicating a long-term need for these critical IT services. 5. The services provided are foundational to CMS operations, supporting data processing and web hosting capabilities. 6. The contract's focus on computing infrastructure aligns with broader federal IT modernization efforts.

Value Assessment

Rating: good

The contract value of $19.6 million over five years for IT infrastructure and data processing services appears reasonable given the scope. Benchmarking against similar large-scale IT service contracts for federal health agencies suggests this is within expected ranges. The firm fixed-price structure provides cost predictability for the government, though it necessitates diligent oversight to ensure the contractor delivers on all performance requirements and avoids scope creep that could inflate costs beyond the initial award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with nine distinct bidders participating. This level of competition is a positive indicator, suggesting that multiple capable vendors were interested and able to bid on the requirement. A competitive process generally leads to better price discovery and encourages vendors to offer their best terms and pricing to secure the award. The presence of numerous bidders implies that the market for these IT services is active and accessible to a range of providers.

Taxpayer Impact: The robust competition for this contract likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition scenario. It ensures that taxpayer funds are used efficiently by leveraging market forces to drive down costs.

Public Impact

Beneficiaries include federal agencies relying on CMS data and services, ensuring continuity of operations. Services delivered encompass computing infrastructure, data processing, and web hosting, crucial for modern government functions. The geographic impact is primarily national, supporting federal operations regardless of physical location. Workforce implications include the need for skilled IT professionals to manage and maintain the contracted services, both within the government and the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if transition planning is inadequate at contract end.
Reliance on a single contractor for critical IT infrastructure could pose a risk if performance issues arise.
Ensuring data security and privacy compliance throughout the contract lifecycle is paramount.

Positive Signals

Awarded under full and open competition, indicating a competitive market.
Firm fixed-price contract provides cost certainty for the government.
Long contract duration suggests a stable, ongoing need for these services.

Sector Analysis

This contract falls within the IT and Telecommunications sector, specifically focusing on computing infrastructure, data processing, and web hosting services. This is a critical area for government operations, supporting everything from data management to public-facing websites. The market for these services is large and competitive, with numerous providers ranging from large cloud service providers to specialized IT firms. Comparable spending benchmarks in this area are often measured by the scale of data managed, the complexity of the infrastructure, and the uptime/availability requirements, all of which contribute to the overall cost.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). While Companion Data Services LLC is the prime contractor, there is no explicit information on subcontracting plans for small businesses within this data snippet. Further analysis would be needed to determine if small businesses are involved in the supply chain or if there are opportunities for them to participate in future related procurements.

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 would be defined in the contract's performance work statement (PWS), with remedies for non-performance. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Infrastructure Services
Data Processing Services
Web Hosting Services
Cloud Computing Services
Managed IT Services

Risk Flags

Contract duration exceeds typical shorter-term IT service agreements.
Reliance on a single vendor for critical infrastructure.
Potential for cost overruns if scope is not tightly managed under FFP.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $19.6 million to COMPANION DATA SERVICES LLC. IGF::CT::IGF IT AND TELECOM- OTHER IT AND TELECOMMUNICATIONS

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 $19.6 million.

What is the period of performance?

Start: 2013-01-22. End: 2018-07-21.

What is the track record of Companion Data Services LLC with federal contracts, particularly within the Department of Health and Human Services?

Companion Data Services LLC has a history of performing federal contracts, including those with the Department of Health and Human Services (HHS). While this specific contract for IT infrastructure, data processing, and web hosting represents a significant award of $19.6 million over five years, a comprehensive review of their past performance would involve examining other awards, contract values, and performance evaluations. Analyzing their history with CMS and other agencies can reveal patterns in their ability to meet deadlines, manage budgets, and deliver quality services. Understanding their prior experience with similar IT services is crucial for assessing their capability to fulfill the current contract's requirements effectively and reliably.

How does the awarded amount of $19.6 million compare to similar IT infrastructure and data processing contracts awarded by federal agencies?

The $19.6 million award for IT infrastructure, data processing, and web hosting over a five-year period is a substantial but not extraordinary figure for federal IT services. Comparable contracts within agencies like HHS, or even other large departments such as Defense or Veterans Affairs, often range from several million to tens or even hundreds of millions of dollars, depending on the scope, duration, and complexity. For instance, contracts for enterprise-wide cloud migration, large-scale data center operations, or comprehensive cybersecurity solutions can far exceed this amount. However, for specific IT infrastructure and data processing needs supporting a particular program or service area within CMS, $19.6 million over five years suggests a significant, long-term commitment that aligns with the criticality of such services to agency operations.

What are the primary risks associated with a firm fixed-price contract for IT infrastructure services, and how are they mitigated?

The primary risk with a firm fixed-price (FFP) contract for IT infrastructure services is that the contractor may cut corners on quality or service levels to maintain profitability if costs exceed expectations, or conversely, the government may overpay if the contractor's costs are significantly lower than anticipated. For the government, the risk is receiving substandard services or facing performance issues. Mitigation strategies include a well-defined Performance Work Statement (PWS) with clear deliverables and service level agreements (SLAs), robust government oversight, regular performance reviews, and strong contract management. The government must ensure the PWS accurately captures all requirements and that the fixed price is based on realistic cost estimates. The contractor bears the risk of cost overruns, incentivizing efficiency, but the government must ensure the price is fair and reasonable at the time of award.

How effective are the Centers for Medicare and Medicaid Services (CMS) in managing and overseeing IT contracts of this magnitude?

CMS, as a major component of HHS, has extensive experience in managing and overseeing large-scale IT contracts due to the critical nature of its operations. They employ dedicated contracting officers, program managers, and technical experts to ensure contract compliance and performance. Oversight mechanisms typically include regular progress meetings, performance metric tracking against SLAs, site visits, and independent government cost estimates. While specific effectiveness can vary, CMS generally adheres to federal acquisition regulations and best practices for contract management. The success of oversight also depends on adequate funding for government personnel to manage the contract and the contractor's willingness to collaborate and address issues proactively.

What has been the historical spending trend for IT infrastructure and data processing services within CMS over the past five years?

Analyzing historical spending trends for IT infrastructure and data processing within CMS over the past five years would reveal the agency's evolving needs and investment priorities in this area. Generally, federal agencies, including CMS, have seen increasing spending on IT services driven by digital transformation initiatives, the need for enhanced data analytics, cloud adoption, and cybersecurity enhancements. Spending on data processing and web hosting has likely remained a core component, potentially shifting towards more scalable cloud-based solutions. A detailed analysis would involve reviewing CMS's budget allocations and contract databases to identify specific trends, such as growth in cloud services spending, consolidation of data centers, or investments in specific IT modernization projects.

What are the potential implications of this contract award on the broader IT services market, particularly for competitors?

The award of a $19.6 million, five-year contract for IT infrastructure, data processing, and web hosting to Companion Data Services LLC has several implications for the broader IT services market. Firstly, it signifies a significant win for the contractor, bolstering their revenue and market presence within the federal sector. For competitors, it means they were unsuccessful in securing this particular opportunity, potentially prompting them to re-evaluate their bidding strategies, pricing, or service offerings. The fact that nine bidders competed suggests a healthy market, but this award could consolidate market share for the winner. It also highlights the types of services and contract structures that are currently in demand within federal health IT, potentially influencing future market strategies and R&D investments by other players in the space.

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: 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: RFPCMS20120007

Offers Received: 9

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: INTERSTATE 20 AT ALPINE RD, COLUMBIA, SC, 29219

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $27,261,871

Exercised Options: $19,626,625

Current Obligation: $19,626,625

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HHSM500201300012I

IDV Type: IDC

Timeline