HHS awards $28.1M for IT maintenance, with 7 bidders indicating competitive pricing

Contract Overview

Contract Amount: $28,157,974 ($28.2M)

Contractor: Disys Solutions, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2017-06-29

End Date: 2021-02-28

Contract Duration: 1,340 days

Daily Burn Rate: $21.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF - CISCO SMARTNET MAINTENANCE DISYS SOLUTIONS, INC.:1256525 [17-001128]

Place of Performance

Location: ASHBURN, LOUDOUN County, VIRGINIA, 20147

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $28.2 million to DISYS SOLUTIONS, INC. for work described as: IGF::OT::IGF - CISCO SMARTNET MAINTENANCE DISYS SOLUTIONS, INC.:1256525 [17-001128] Key points: 1. The contract value of $28.1 million over approximately 3.7 years suggests a moderate investment in IT infrastructure support. 2. With 7 bidders, the competition level appears healthy, likely driving more favorable pricing for the government. 3. The firm-fixed-price contract type mitigates cost overrun risks for the agency. 4. This contract falls within the 'Other Computer Related Services' NAICS code, a common category for IT support. 5. The contract's duration and value place it as a significant, but not exceptionally large, IT services award. 6. The award to DISYS SOLUTIONS, INC. represents a specific instance of IT service procurement within the vast federal IT landscape.

Value Assessment

Rating: good

The contract's total value of $28.1 million over 1340 days (approx. 3.7 years) averages to roughly $7.6 million annually. Benchmarking against similar IT maintenance contracts is challenging without more specific service details, but the presence of 7 bidders suggests a competitive market that likely yielded a fair price. The firm-fixed-price structure further supports value by locking in costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with seven distinct bidders vying for the opportunity. This level of competition is generally considered robust and indicates that multiple capable vendors were aware of and interested in the requirement. A higher number of bidders typically leads to better price discovery and can result in more favorable terms for the government.

Taxpayer Impact: The strong competition for this contract suggests that taxpayer dollars were likely used efficiently, as vendors competed to offer their best pricing and value to secure the award.

Public Impact

The primary beneficiaries are the National Institutes of Health (NIH) within the Department of Health and Human Services (HHS), ensuring the continuity of critical IT systems. The services delivered include maintenance for IT infrastructure, crucial for research and administrative functions at NIH. The geographic impact is centered around NIH facilities, primarily in Virginia, where the contractor is located. This contract supports a segment of the IT services workforce, including technical staff involved in maintenance and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if maintenance services are highly specialized and difficult to transition.
Reliance on a single vendor for critical IT maintenance could pose a risk if the vendor experiences financial instability or operational disruptions.
Ensuring the scope of work accurately reflects ongoing needs to avoid over or under-servicing.

Positive Signals

The firm-fixed-price contract type provides cost certainty and reduces the risk of budget overruns for the agency.
The competitive bidding process with seven offers suggests a healthy market and likely resulted in a fair market price.
The contract duration of over three years allows for stable IT support and planning for the agency.

Sector Analysis

This contract falls under the Information Technology sector, specifically within IT services and maintenance. The federal IT services market is vast and highly competitive, with numerous companies offering a wide range of solutions. Spending in this category is consistent with the government's ongoing need to maintain and update its complex technological infrastructure to support its diverse missions. Comparable spending benchmarks would depend on the specific nature of the IT systems being maintained.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information suggesting significant subcontracting opportunities for small businesses. The award to DISYS SOLUTIONS, INC. does not appear to be a small business itself based on typical industry profiles. Further analysis would be needed to determine if any small business subcontracting plans were mandated or voluntarily proposed.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the National Institutes of Health (NIH). Accountability measures are inherent in the firm-fixed-price contract, requiring the vendor to deliver specified services. Transparency is facilitated through contract databases like FPDS, though detailed performance metrics are usually internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal IT Services Procurement
IT Maintenance and Support Contracts
Department of Health and Human Services IT Spending
National Institutes of Health Technology Modernization

Risk Flags

Potential for vendor lock-in
Cybersecurity risks associated with third-party IT maintenance
Ensuring adequate competition in future procurements

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $28.2 million to DISYS SOLUTIONS, INC.. IGF::OT::IGF - CISCO SMARTNET MAINTENANCE DISYS SOLUTIONS, INC.:1256525 [17-001128]

Who is the contractor on this award?

The obligated recipient is DISYS SOLUTIONS, INC..

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $28.2 million.

What is the period of performance?

Start: 2017-06-29. End: 2021-02-28.

What is the track record of DISYS SOLUTIONS, INC. in performing similar federal IT maintenance contracts?

Assessing the track record of DISYS SOLUTIONS, INC. requires a review of their past performance on federal contracts, particularly those involving IT maintenance and support services. Information available through sources like the Federal Procurement Data System (FPDS) and contractor performance assessment reporting (CPARS) would be crucial. Key indicators to examine include on-time delivery, adherence to technical specifications, customer satisfaction ratings, and any history of contract disputes or terminations. A history of successful, similar contract completions would indicate a lower performance risk for this current award. Conversely, any negative performance indicators would warrant closer scrutiny of the agency's source selection decision and risk mitigation strategies.

How does the average annual cost of this contract compare to similar IT maintenance contracts awarded by NIH or other agencies?

The average annual cost of this contract is approximately $7.6 million ($28.1M / 3.7 years). To benchmark this effectively, one would need to compare it against contracts for similar IT maintenance services, considering factors such as the scope of services (e.g., hardware, software, network), the criticality of the systems supported, the size and complexity of the IT environment, and the specific technologies involved. Comparing against contracts with similar NAICS codes (541519) and contract types (firm-fixed-price) from the same or comparable agencies like NIH would provide a more accurate assessment. A higher average annual cost compared to similar contracts might suggest potential overpricing or a more complex scope, while a lower cost could indicate strong competition or efficient service delivery.

What are the primary risks associated with this contract, and how are they being mitigated?

Primary risks associated with this contract could include potential vendor performance issues (failure to deliver services as specified), cost overruns (though mitigated by FFP), cybersecurity vulnerabilities introduced or exploited through maintenance activities, and vendor lock-in. Mitigation strategies would involve robust contract oversight by the agency, clear performance metrics and service level agreements (SLAs), regular performance reviews, and potentially contingency planning for service disruptions. For cybersecurity, stringent security requirements and audits would be essential. Vendor lock-in could be addressed by ensuring clear exit strategies and data portability clauses within the contract.

How effective is the firm-fixed-price contract type in ensuring value for money for this specific IT maintenance requirement?

The firm-fixed-price (FFP) contract type is generally effective in ensuring value for money for IT maintenance requirements where the scope of work is well-defined and unlikely to change significantly. It shifts the risk of cost overruns to the contractor, providing the agency with budget certainty. For routine maintenance and support, where services are predictable, FFP can incentivize contractor efficiency. However, if the IT environment is highly dynamic or unforeseen technical challenges arise frequently, an FFP contract might limit flexibility or lead the contractor to build in higher contingency costs, potentially impacting overall value. The success of FFP here hinges on the clarity and stability of the defined maintenance services.

What is the historical spending trend for similar IT maintenance services at the National Institutes of Health?

Analyzing historical spending trends for similar IT maintenance services at the National Institutes of Health (NIH) would involve examining procurement data over several fiscal years. This would entail looking at the total amount obligated for contracts under relevant NAICS codes (like 541519) and service categories related to IT maintenance and support. Trends might reveal whether spending in this area is increasing, decreasing, or remaining stable, potentially indicating shifts in technology adoption, infrastructure needs, or outsourcing strategies. Understanding these patterns can help contextualize the current $28.1 million award and assess its alignment with NIH's overall IT budget and priorities.

Industry Classification

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

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: NIHJT2014002

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 44670 CAPE CT STE 100, ASHBURN, VA, 20147

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $28,157,974

Exercised Options: $28,157,974

Current Obligation: $28,157,974

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: HHSN316201500053W

IDV Type: GWAC

Timeline