HHS awards $110M contract for IT infrastructure, data processing, and web hosting services to COMPANION DATA SERVICES LLC

Contract Overview

Contract Amount: $110,242,883 ($110.2M)

Contractor: Companion Data Services LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2013-09-23

End Date: 2025-04-30

Contract Duration: 4,237 days

Daily Burn Rate: $26.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

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 $110.2 million to COMPANION DATA SERVICES LLC for work described as: IGF::OT::IGF Key points: 1. Contract value of $110M over its period of performance suggests significant investment in IT infrastructure. 2. The contract was awarded under full and open competition, indicating a potentially competitive bidding process. 3. The fixed-price contract type may offer cost certainty for the government, but could limit flexibility. 4. The duration of the contract (over 11 years) points to a long-term need for these IT services. 5. The North American Industry Classification System (NAICS) code 518210 signifies a focus on data processing and hosting. 6. The award to a single entity, COMPANION DATA SERVICES LLC, warrants scrutiny regarding performance and potential future needs. 7. The contract's status as a Delivery Order under a larger IDIQ contract (implied by 'MD') suggests it's part of a broader IT services strategy.

Value Assessment

Rating: fair

Benchmarking the value of this $110M contract is challenging without specific performance metrics or comparable contract details. However, the duration of over 11 years suggests a substantial, long-term commitment. The firm fixed-price structure aims for cost control, but the overall value depends heavily on the efficiency and effectiveness of the services provided by COMPANION DATA SERVICES LLC. Without more granular data on the scope of services and market rates for similar infrastructure and data processing, a definitive 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, suggesting that multiple vendors had the opportunity to bid. The presence of 4 bidders indicates a degree of competition, which is generally positive for price discovery and achieving fair market value. However, the specific number of bidders does not guarantee the most competitive outcome without knowing the quality and competitiveness of the proposals submitted.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and better service offerings. It ensures that the government explores a wide range of potential providers, maximizing the chances of securing a cost-effective solution.

Public Impact

Beneficiaries include the Centers for Medicare and Medicaid Services (CMS) and potentially other agencies within HHS requiring IT infrastructure and data processing. Services delivered encompass computing infrastructure provision, data processing, and web hosting, crucial for the operation of federal health programs. The geographic impact is primarily national, supporting federal health IT systems, though the physical location of data centers may be specific. Workforce implications could include the need for specialized IT personnel within CMS and potentially within the contractor's organization to manage and maintain these services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 11 years) could lead to vendor lock-in and reduced agility in adopting new technologies.
Reliance on a single contractor for critical IT infrastructure and data processing poses a risk if the contractor underperforms or faces financial instability.
Firm fixed-price contracts can sometimes disincentivize innovation or cost-saving measures by the contractor if not structured with appropriate performance incentives.
Lack of specific performance metrics in the provided data makes it difficult to assess the ongoing value and effectiveness of the services.

Positive Signals

Awarded through full and open competition, suggesting a robust vetting process and potential for competitive pricing.
The firm fixed-price contract type provides budget certainty for the government, simplifying financial planning.
The contract's long duration indicates a stable, ongoing need for these essential IT services, suggesting a well-defined requirement.
The specific NAICS code points to a specialized area of IT services, implying the contractor possesses relevant expertise.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on data processing, web hosting, and computing infrastructure. This is a critical and growing area for government operations, supporting everything from data management to cloud services. Comparable spending benchmarks in this sector are highly variable, depending on the scale and complexity of services. However, multi-year contracts for comprehensive IT infrastructure and data processing often run into tens or hundreds of millions of dollars, making this award within a typical range for large-scale federal IT procurements.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this specific contract. There is no explicit mention of small business subcontracting goals. This suggests that the primary award was made to a large business, and the impact on the small business ecosystem would depend on whether COMPANION DATA SERVICES LLC engages small businesses as subcontractors, which is not detailed here.

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 inherent in the firm fixed-price structure, requiring the contractor to deliver specified services. Transparency is generally facilitated through contract databases like FPDS, where this award is likely recorded. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

IT Infrastructure Services
Data Center Operations
Cloud Computing Services
Web Hosting Services
Information Technology Support Services
Health Information Technology

Risk Flags

Long contract duration may limit flexibility and introduce risk of technological obsolescence.
Reliance on a single vendor for critical infrastructure requires strong performance monitoring.
Firm fixed-price contracts can sometimes lack incentives for innovation or cost reduction.
Cybersecurity risks inherent in data processing and hosting services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $110.2 million to COMPANION DATA SERVICES LLC. IGF::OT::IGF

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 $110.2 million.

What is the period of performance?

Start: 2013-09-23. End: 2025-04-30.

What is the track record of COMPANION DATA SERVICES LLC with federal contracts, particularly in IT infrastructure and data processing?

A comprehensive review of COMPANION DATA SERVICES LLC's federal contracting history would be necessary to assess their track record. This would involve examining past performance evaluations, any documented disputes or contract terminations, and the types and values of previous awards. For a contract of this magnitude and duration, understanding their experience with similar large-scale IT infrastructure, data processing, and web hosting services is crucial. A history of successful contract completion, positive performance reviews, and adherence to security and compliance standards would indicate a reliable contractor. Conversely, any history of significant performance issues, cost overruns, or unmet deliverables would raise concerns about their capability to fulfill the current contract effectively.

How does the pricing structure of this $110M contract compare to market rates for similar IT infrastructure and data processing services?

Determining the precise value-for-money requires a detailed breakdown of the services included in the $110M contract and a comparison against current market rates for comparable IT infrastructure, data processing, and web hosting. Factors such as service level agreements (SLAs), data storage capacity, processing power, security measures, and geographic scope would need to be benchmarked against industry standards. Given the contract's long duration (over 11 years), it's important to assess whether the fixed pricing remains competitive throughout its term, especially considering the rapid evolution of technology. Without access to the specific contract line items and detailed service level agreements, a definitive price comparison is difficult, but the scale suggests a significant investment that should yield substantial operational benefits for CMS.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract, and how is performance monitored?

The provided data does not specify the Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. However, for a contract of this nature—providing computing infrastructure, data processing, and web hosting—critical KPIs would likely include system uptime and availability, data processing speed, response times for support, data security compliance, and disaster recovery capabilities. Effective monitoring would involve regular reporting from COMPANION DATA SERVICES LLC, independent government assessments, and potentially third-party audits. The Centers for Medicare and Medicaid Services (CMS) contracting officer's representative (COR) would be responsible for overseeing performance against these metrics and ensuring the contractor meets all contractual obligations.

What is the potential impact of this contract on the long-term IT strategy and infrastructure modernization efforts of the Centers for Medicare and Medicaid Services (CMS)?

This $110M contract represents a significant commitment to maintaining and potentially upgrading CMS's core IT infrastructure and data processing capabilities over an extended period (over 11 years). Its impact on modernization depends on the specific technologies and services being procured. If the contract enables the adoption of modern, scalable, and secure cloud-based solutions, it could significantly enhance CMS's agility and efficiency. Conversely, if it locks CMS into legacy systems or less flexible infrastructure, it could hinder modernization efforts. The long duration necessitates careful planning to ensure the procured services align with future technological advancements and evolving healthcare IT needs, avoiding technological obsolescence.

Are there any identified risks associated with COMPANION DATA SERVICES LLC's ability to deliver on this contract, considering its duration and scope?

Potential risks associated with this contract include vendor lock-in due to the long duration, the contractor's financial stability over the 11+ year period, and the evolving nature of IT services potentially making the contracted solutions outdated. Cybersecurity threats are also a constant risk in data processing and hosting. Mitigation strategies would involve robust contract management, regular performance reviews, contingency planning for service disruptions, and ensuring strong cybersecurity protocols are maintained and updated throughout the contract's life. The government's ability to adapt the contract or transition services if necessary would also be a key consideration.

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: 4

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: $132,138,515

Exercised Options: $110,242,883

Current Obligation: $110,242,883

Actual Outlays: $28,323,061

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $25,812,415

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