HHS awarded $15.6M contract for internet services, highlighting long-term provider relationships

Contract Overview

Contract Amount: $15,644,178 ($15.6M)

Contractor: Management Assistance Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2003-09-15

End Date: 2008-10-14

Contract Duration: 1,856 days

Daily Burn Rate: $8.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20857, UNITED STATES OF AMERICA

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $15.6 million to MANAGEMENT ASSISTANCE CORPORATION for work described as: Key points: 1. Contract value suggests a need for consistent, reliable internet infrastructure. 2. The duration of the contract (over 5 years) indicates a stable, ongoing requirement. 3. The 'Cost Plus Fixed Fee' structure may incentivize cost control by the contractor. 4. The award to a single entity suggests potential for specialized service delivery. 5. The lack of small business set-aside warrants further investigation into subcontracting opportunities. 6. The specific NAICS code (518111) points to a mature market for internet providers.

Value Assessment

Rating: fair

The total award of $15.6 million over approximately 5 years averages to about $3.1 million annually. Benchmarking this against similar federal contracts for internet service providers is challenging without more specific details on bandwidth, service level agreements, and geographic coverage. However, the 'Cost Plus Fixed Fee' contract type suggests that the government is bearing the cost of performance while the contractor earns a fixed fee, which can sometimes lead to higher overall costs if not managed tightly. The absence of a clear per-unit cost makes direct value assessment difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition,' indicating that all responsible sources were permitted to submit bids. With 2 bids received, the competition level was relatively low, which could potentially impact price discovery. A higher number of bidders typically leads to more competitive pricing for the government. The limited number of bids might suggest barriers to entry for other providers or a concentrated market for this specific type of service.

Taxpayer Impact: A low number of bids in a full and open competition means taxpayers may not have received the most competitive pricing possible. This could translate to higher overall spending for the government on this essential service.

Public Impact

Federal employees within the Department of Health and Human Services benefit from reliable internet connectivity, essential for daily operations. The services delivered are core internet access and related services, crucial for communication and data transfer. The contract is geographically focused on Maryland, where the agency is located. The contract supports the IT infrastructure workforce within the contractor organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) may have resulted in suboptimal pricing for taxpayers.
The 'Cost Plus Fixed Fee' structure requires diligent oversight to prevent cost overruns.
Lack of specific performance metrics in the provided data makes it hard to assess service quality.
The long contract duration could lead to vendor lock-in if not managed proactively.

Positive Signals

Awarded through full and open competition, ensuring a fair process.
The contract duration suggests a stable and reliable service for a critical function.
The fixed fee component provides some cost predictability for the government.

Sector Analysis

The Information Technology sector, specifically Internet Service Providers (NAICS 518111), is a critical component of federal operations. This contract falls within a mature market where numerous providers offer a range of services. Federal spending in this area is substantial, driven by the need for robust connectivity across agencies. Comparable spending benchmarks are difficult to establish without detailed service specifications, but contracts of this size are common for agencies with significant operational footprints.

Small Business Impact

The provided data indicates that this contract was not specifically set aside for small businesses, nor does it explicitly mention subcontracting goals. This suggests that larger, established internet service providers were likely the primary bidders. Further analysis would be needed to determine if any subcontracting opportunities were made available to small businesses, which could impact the broader small business ecosystem within the IT services sector.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services' contracting officers and program managers. Accountability measures would be defined in the contract's terms and conditions, including performance standards and reporting requirements. Transparency is generally facilitated through contract databases like FPDS, where basic award information is publicly available. The Inspector General's office for HHS would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Federal Telecommunications Services
IT Infrastructure Modernization Programs
Agency-Specific Network Services
Cloud Computing Services (as a related IT expenditure)

Risk Flags

Limited competition may impact price.
CPFF contract type requires careful cost monitoring.
Lack of detailed performance metrics hinders value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $15.6 million to MANAGEMENT ASSISTANCE CORPORATION. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is MANAGEMENT ASSISTANCE CORPORATION.

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 $15.6 million.

What is the period of performance?

Start: 2003-09-15. End: 2008-10-14.

What was the specific nature of the services provided under this contract, beyond 'Internet Service Providers'?

The NAICS code 518111, 'Internet Service Providers,' typically encompasses services such as providing internet access, dedicated bandwidth, and potentially related network management or support. However, the specific details of the services procured by HHS under this $15.6 million contract are not fully detailed in the provided data. It could range from basic broadband access to high-capacity dedicated lines with specific service level agreements (SLAs) for uptime, latency, and support response times. Understanding the precise service mix, including bandwidth requirements and any value-added services, is crucial for a comprehensive assessment of the contract's value and performance.

How does the 'Cost Plus Fixed Fee' (CPFF) structure compare to other contract types for similar IT services?

The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is well-defined but the exact costs are uncertain, or when the contractor is expected to perform research and development. In this structure, the government reimburses the contractor for allowable costs incurred, plus a predetermined fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF can offer more flexibility but carries a higher risk of cost overruns if not managed diligently. For stable, ongoing services like internet provision, FFP contracts are often preferred for better cost certainty. The use of CPFF here might suggest unique circumstances or a need for flexibility in service delivery or integration not typical for standard ISP contracts.

What were the key performance indicators (KPIs) or service level agreements (SLAs) associated with this contract?

The provided data does not include specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. In a typical contract for internet services, SLAs would define critical metrics such as network uptime (e.g., 99.9% availability), maximum latency, data transfer speeds, and response times for technical support or outage resolution. The absence of this information makes it difficult to objectively assess the contractor's performance and the value delivered to HHS. Effective contract management would require clearly defined and measurable KPIs/SLAs to ensure the government receives the expected level of service quality and reliability.

What is the historical spending pattern for internet services at HHS or similar agencies?

Historical spending data for internet services at HHS or similar large federal agencies is typically substantial and consistent, reflecting the essential nature of these services. Agencies like HHS rely heavily on robust internet connectivity for operations, data management, and communication. Annual spending can range from hundreds of thousands to millions of dollars, depending on the agency's size, geographic distribution, and specific bandwidth and service requirements. Contracts often span multiple years, with potential for renewals or re-competitions. Analyzing past awards for similar services can provide benchmarks for pricing and identify trends in technology adoption or vendor consolidation within the federal IT landscape.

Were there any specific risks identified during the solicitation or award process for this contract?

The provided data does not detail specific risks identified during the solicitation or award process for this contract. However, general risks associated with IT service contracts, particularly internet services, can include vendor lock-in, cybersecurity vulnerabilities, service disruptions, cost overruns (especially with CPFF contracts), and failure to meet performance SLAs. Given the 'Full and Open Competition' with only two bidders, a potential risk could be insufficient market interest or high barriers to entry, which might limit future competition. A thorough risk assessment would typically involve evaluating the contractor's financial stability, technical capabilities, past performance, and security posture.

Industry Classification

NAICS: Information › Internet Service Providers and Web Search Portals › Internet Service Providers

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Address: 107 W MARSHALL ST, MIDDLEBURG, VA, 20117

Business Categories: 8(a) Program Participant, Category Business, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Small Disadvantaged Business, Special Designations, Veteran Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $4,563,184

Exercised Options: $10,316,080

Current Obligation: $15,644,178

Timeline