SEV1TECH, LLC awarded $39.7M for IT facilities management services by HHS

Contract Overview

Contract Amount: $39,739,915 ($39.7M)

Contractor: Sev1tech, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2017-09-29

End Date: 2022-08-31

Contract Duration: 1,797 days

Daily Burn Rate: $22.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CT::IGF APPLICATION HOSTING

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20852

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $39.7 million to SEV1TECH, LLC for work described as: IGF::CT::IGF APPLICATION HOSTING Key points: 1. Value for money appears reasonable given the 5-year duration and firm-fixed-price structure. 2. The contract was awarded under full and open competition, suggesting a competitive pricing environment. 3. Risk indicators are moderate, with a long contract duration and a single awardee. 4. Performance context is within IT facilities management, a critical but standard service area. 5. Sector positioning is within IT services, a large and competitive federal market. 6. The contract was awarded as a BPA Call, indicating it leveraged an existing framework agreement.

Value Assessment

Rating: good

The contract's total value of approximately $39.7 million over five years averages to about $7.9 million annually. This figure seems within a reasonable range for comprehensive IT facilities management services, especially considering the scope likely includes infrastructure, maintenance, and support. Benchmarking against similar large-scale IT service contracts awarded by federal agencies suggests this pricing is competitive, particularly given the firm-fixed-price nature which shifts cost risk to the contractor. Without specific details on the exact services rendered, a precise comparison is difficult, but the overall value appears to be in line with market expectations for such a contract.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bidders suggests a moderately competitive environment. While more bidders could potentially drive prices lower, full and open competition generally ensures a fair process and allows the government to select the best value offer. The limited number of bidders might suggest a specialized service area or a high barrier to entry for potential competitors.

Taxpayer Impact: Taxpayers benefit from the assurance that the government sought the best possible price and quality through a competitive process, rather than potentially overpaying in a sole-source situation.

Public Impact

The primary beneficiaries are the Department of Health and Human Services (HHS) operating units that rely on stable and efficient IT infrastructure. Services delivered include computer facilities management, ensuring the availability and performance of critical IT systems. The geographic impact is primarily within the state of Maryland, where the contractor is located and services are likely performed. Workforce implications include the employment of IT professionals by SEV1TECH, LLC to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (5 years) could lead to vendor lock-in and reduced flexibility.
Single awardee for a significant contract value may limit future competition if performance issues arise.
Reliance on a single contractor for critical IT facilities management could pose a risk if the contractor experiences financial or operational difficulties.

Positive Signals

Firm-fixed-price contract structure incentivizes contractor efficiency and cost control.
Awarded under full and open competition, suggesting a competitive process was followed.
Contract leverages an existing BPA Call, potentially streamlining acquisition and reducing administrative burden.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, specifically focusing on IT facilities management. This sector is a significant component of federal spending, encompassing a wide range of services from hardware maintenance to cloud computing. The federal IT services market is highly competitive, with numerous large and small businesses vying for contracts. Comparable spending benchmarks for IT facilities management can vary widely based on the scope and scale of services, but contracts in the tens of millions of dollars are common for agencies like HHS.

Small Business Impact

This contract was not set aside for small businesses, nor does it indicate any specific subcontracting requirements for small businesses. The awardee, SEV1TECH, LLC, is not explicitly identified as a small business in the provided data. This means that the primary contract value does not directly flow down to the small business ecosystem through set-asides. However, the contractor may still engage small businesses as subcontractors, which would be detailed in their subcontracting plan, if applicable.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Office of the Assistant Secretary for Administration at HHS. Accountability measures are embedded in the firm-fixed-price contract terms, requiring the contractor to deliver specified services within agreed-upon costs. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract is suspected.

Related Government Programs

IT Infrastructure Management
Data Center Operations
IT Support Services
Cloud Services Management
IT Professional Services

Risk Flags

Long-term contract duration
Single awardee for critical service
Potential for vendor lock-in

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $39.7 million to SEV1TECH, LLC. IGF::CT::IGF APPLICATION HOSTING

Who is the contractor on this award?

The obligated recipient is SEV1TECH, LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Office of the Assistant Secretary for Administration).

What is the total obligated amount?

The obligated amount is $39.7 million.

What is the period of performance?

Start: 2017-09-29. End: 2022-08-31.

What is the track record of SEV1TECH, LLC with federal contracts, particularly in IT facilities management?

SEV1TECH, LLC has a history of federal contracting, with this specific contract representing a significant award for IT facilities management services. Analyzing their broader federal contract portfolio would reveal their experience across different agencies and service types. Past performance evaluations, if publicly available, would offer insights into their reliability, quality of service, and adherence to contract terms. A review of their contract history might also indicate if they have successfully managed similar-sized or more complex IT infrastructure projects, providing a basis for assessing their capability to fulfill the current HHS requirements effectively and efficiently.

How does the pricing of this contract compare to similar IT facilities management contracts awarded by HHS or other large federal agencies?

The average annual value of this contract is approximately $7.9 million. To benchmark this effectively, one would compare it against contracts for similar IT facilities management services (e.g., data center operations, network management, end-user support) awarded by HHS or agencies of comparable size and complexity, such as the Department of Defense or the General Services Administration. Key comparison points would include the scope of services, contract duration, labor categories, and pricing structures (e.g., firm-fixed-price vs. cost-plus). If this contract's annual cost is significantly lower or higher than comparable contracts, it would warrant further investigation into the reasons, such as differences in service levels, geographic locations, or market conditions.

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

Key risks include potential vendor lock-in due to the 5-year duration, the possibility of performance degradation over time from a single awardee, and the inherent risks associated with relying on a contractor for critical IT infrastructure. Mitigation strategies often involve robust performance monitoring, clearly defined service level agreements (SLAs), regular contract reviews, and contingency planning. The firm-fixed-price nature of the contract shifts some financial risk to the contractor. The government's ability to exercise options or terminate for convenience also serves as a control mechanism. Proactive communication and strong contract management are crucial for mitigating these risks.

How effective has SEV1TECH, LLC been in delivering IT facilities management services under this contract, based on available performance data?

Assessing the effectiveness requires access to performance metrics, such as uptime percentages, response times for service requests, and user satisfaction surveys, which are typically not publicly disclosed in detail. However, the contract's continuation and completion without significant reported issues suggest a level of satisfactory performance. If the contract included specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs), their achievement would be the primary measure of effectiveness. The absence of contract terminations or major disputes would also imply that the contractor is meeting its obligations.

What has been the historical spending trend for IT facilities management services at HHS, and how does this contract fit within that trend?

Analyzing HHS's historical spending on IT facilities management would provide context for this $39.7 million award. This involves examining annual IT budgets and procurement data over the past 5-10 years to identify patterns in spending levels, types of services procured, and primary contractors. If HHS's spending in this area has been consistently high, this contract would represent a continuation of established needs. Conversely, a significant increase or decrease might signal a shift in strategy, such as consolidation of services, adoption of new technologies (e.g., cloud migration), or changes in infrastructure requirements. This contract's value should be evaluated against these broader trends.

What is the potential impact of this contract on the broader IT services market, particularly concerning competition and innovation?

As a substantial contract awarded through full and open competition, this award signals continued government demand for IT facilities management. The competition, even with two bidders, suggests a market where multiple firms possess the capability to meet HHS's needs. The success of SEV1TECH, LLC could encourage other firms to invest in similar capabilities. However, the long duration and single award might limit opportunities for newer or smaller entrants in the short term. The government's requirements could also drive innovation if specific technological advancements or service delivery models are sought.

Industry Classification

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

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 12700 BLACK FOREST LN STE 306, WOODBRIDGE, VA, 22192

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $39,808,408

Exercised Options: $39,739,915

Current Obligation: $39,739,915

Actual Outlays: $8,598,306

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $6,356,619

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HHSP233201700023B

IDV Type: BPA

Timeline