DoD awards $31.6M for peripheral hardware support, with a 30-day performance period

Contract Overview

Contract Amount: $31,651,634 ($31.7M)

Contractor: CDW Government LLC

Awarding Agency: Department of Defense

Start Date: 2022-07-08

End Date: 2022-08-07

Contract Duration: 30 days

Daily Burn Rate: $1.1M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MILITARY HEALTH SYSTEM GENESIS - PERIPHERAL SUPPORT HARDWARE

Place of Performance

Location: VERNON HILLS, LAKE County, ILLINOIS, 60061

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $31.7 million to CDW GOVERNMENT LLC for work described as: MILITARY HEALTH SYSTEM GENESIS - PERIPHERAL SUPPORT HARDWARE Key points: 1. Value for money appears fair given the short performance window and fixed-price nature. 2. Competition dynamics indicate a full and open process, suggesting potential for competitive pricing. 3. Risk indicators are low due to the short duration and clear scope of IT hardware support. 4. Performance context is limited by the brief delivery order, making long-term assessment difficult. 5. Sector positioning is within IT hardware procurement for defense health services.

Value Assessment

Rating: fair

The contract value of $31.6 million for a 30-day period for peripheral hardware support seems high on a daily basis. However, without specific details on the quantity and type of hardware, a direct comparison to similar contracts is challenging. The firm fixed-price structure suggests the government has a clear understanding of costs, but the overall value proposition is difficult to ascertain without more granular data on the services rendered and the market rate for such support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 4 bids suggests a reasonable level of competition for this specific requirement. A competitive process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: A full and open competition ensures that taxpayer dollars are being used efficiently by leveraging market forces to secure the best possible pricing and service.

Public Impact

Beneficiaries include military personnel and their families who rely on the Defense Health Agency's IT infrastructure. Services delivered involve the support and maintenance of peripheral hardware essential for IT operations. Geographic impact is likely concentrated around the Defense Health Agency's facilities, primarily in Illinois. Workforce implications are minimal, as this contract focuses on hardware support rather than direct personnel services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price inflation due to the short, urgent nature of the delivery order.
Lack of long-term performance data makes it difficult to assess sustained value.
Scope may be too narrow to capture comprehensive IT support needs.

Positive Signals

Awarded through full and open competition, maximizing potential for competitive pricing.
Firm fixed-price contract provides cost certainty for the government.
Short duration limits long-term financial exposure and risk.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computer systems design and related services for hardware support. The market for IT hardware maintenance and support is substantial within the federal government, with agencies like the Department of Defense being major consumers. Benchmarking this spending against similar IT support contracts within the defense sector would provide further context on its relative scale and cost-effectiveness.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This suggests that the primary awardee, CDW Government LLC, is likely a large business. The lack of small business involvement in this specific award means there is no direct positive impact on the small business ecosystem through this particular contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Health Agency's contracting and program management offices. As a delivery order under a larger contract vehicle, the oversight mechanisms are likely established within the parent contract's framework. Transparency is facilitated by the contract award data being publicly available, but detailed performance monitoring and accountability measures are internal to the agency.

Related Government Programs

Defense Health Agency IT Support Contracts
Peripheral Hardware Maintenance Services
Federal IT Procurement
Computer Systems Design Services

Risk Flags

High daily cost without clear justification
Short performance period limits assessment of value and quality
Potential for scope creep or incomplete delivery due to time constraints

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.7 million to CDW GOVERNMENT LLC. MILITARY HEALTH SYSTEM GENESIS - PERIPHERAL SUPPORT HARDWARE

Who is the contractor on this award?

The obligated recipient is CDW GOVERNMENT LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Health Agency).

What is the total obligated amount?

The obligated amount is $31.7 million.

What is the period of performance?

Start: 2022-07-08. End: 2022-08-07.

What is the specific nature of the 'peripheral support hardware' being procured, and what is its criticality to the Military Health System's operations?

The provided data does not specify the exact type of peripheral support hardware. However, in the context of the Military Health System (MHS), 'peripheral support hardware' could encompass a wide range of devices such as printers, scanners, external storage devices, specialized medical peripherals that interface with IT systems, or even components for workstations and servers. Its criticality would depend on its function; for instance, if it supports patient record systems or diagnostic equipment, its failure could directly impact healthcare delivery. The short 30-day performance period suggests it might be for immediate needs, emergency replacements, or a specific short-term project rather than routine, long-term infrastructure.

How does the $31.6 million cost for a 30-day period compare to industry benchmarks for similar IT hardware support services?

Benchmarking $31.6 million for 30 days of peripheral hardware support is challenging without knowing the exact scope and quantity. If this represents a large-scale deployment or critical, high-availability support for thousands of devices across multiple locations, the daily rate might be justifiable. However, if it's for standard maintenance or a smaller number of devices, it could be significantly above market rates. Typical IT support contracts often involve longer durations and may include software, labor, and maintenance. A direct comparison would require detailed service level agreements (SLAs), the number and type of devices supported, and the geographic coverage. The firm fixed-price nature suggests the government aimed for cost certainty, but the unit cost appears high without further context.

What are the potential risks associated with a short, 30-day performance period for this type of contract?

A primary risk of a short, 30-day performance period is the potential for the contractor to prioritize speed over quality, especially if the contract is priced aggressively or if there are incentives for rapid completion. There's also a risk of incomplete work or a lack of thoroughness, as the contractor may not have sufficient time to fully address all aspects of the support. Furthermore, if this is a recurring need, the short duration necessitates frequent re-competition or extension, leading to administrative overhead and potential disruptions in service continuity. For the government, it limits the ability to assess long-term performance and value, making it harder to identify and address systemic issues.

Given the 'Computer Systems Design Services' NAICS code (541512), how does this contract align with typical services offered under this classification?

The NAICS code 541512, 'Computer Systems Design Services,' typically encompasses a broad range of activities including analyzing user needs, designing and developing custom computer systems, integrating hardware and software, and providing consulting services. While peripheral hardware support can be a component of system design and integration, it's often considered more of a maintenance or operational support function. Awarding this contract under 541512 might indicate that the support is tied to a larger system design or integration project, or it could be a classification choice by the agency. If the primary focus is purely on hardware maintenance, other NAICS codes related to IT hardware maintenance or facilities support might be more precise.

What does the fact that this is a 'Delivery Order' imply about the underlying contract vehicle and its competition?

A 'Delivery Order' indicates that this contract is a task order or delivery order issued against a pre-existing indefinite-delivery, indefinite-quantity (IDIQ) contract or a similar multiple-award contract vehicle. These larger vehicles are typically competed on a full and open basis, establishing terms and conditions, including pricing structures, that apply to subsequent orders. The fact that this specific delivery order was awarded under 'FULL AND OPEN COMPETITION' suggests that the underlying IDIQ contract itself was competed broadly, and potentially that this specific order was also competed among the awardees of that larger vehicle, or that the vehicle itself was awarded through full and open competition and this order falls under its terms.

What is the significance of the 'FIRM FIXED PRICE' contract type in this context?

A 'FIRM FIXED PRICE' (FFP) contract type means the contractor agrees to a total price for the supplies or services delivered. This contract type shifts the risk of cost overruns from the government to the contractor. For the government, it provides the highest level of cost certainty, as the final price is not expected to change regardless of the contractor's actual costs. This is often preferred for well-defined requirements where the scope of work is clear, as it is likely the case with peripheral hardware support over a short period. The $31.6 million is the ceiling price, and the contractor aims to perform the work within that budget to maximize profit.

Industry Classification

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

Product/Service Code: IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: CDW Corporation

Address: 230 N MILWAUKEE AVE, VERNON HILLS, IL, 60061

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

Financial Breakdown

Contract Ceiling: $31,651,634

Exercised Options: $31,651,634

Current Obligation: $31,651,634

Actual Outlays: $7,204,092

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 47QTCA18D004K

IDV Type: FSS

Timeline