VA awards $174M for IT sustainment, impacting 1458 days of operations

Contract Overview

Contract Amount: $174,443,335 ($174.4M)

Contractor: Oracle Health Government Services, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2020-06-03

End Date: 2024-05-31

Contract Duration: 1,458 days

Daily Burn Rate: $119.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THIS TO SHALL SUSTAIN THE SOFTWARE AND HARDWARE TECHNICAL SOLUTIONS THAT WERE INCORPORATED AS PART OF THE SITE DEPLOYMENT ACTIVITIES FOR ALL SITES. OPERATIONS WORK DEFINED IN THIS TASK ORDER WILL BEGIN UPON GO-LIVE OF THE FIRST IOC SITE.

Place of Performance

Location: KANSAS CITY, WYANDOTTE County, KANSAS, 66111

State: Kansas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $174.4 million to ORACLE HEALTH GOVERNMENT SERVICES, INC. for work described as: THIS TO SHALL SUSTAIN THE SOFTWARE AND HARDWARE TECHNICAL SOLUTIONS THAT WERE INCORPORATED AS PART OF THE SITE DEPLOYMENT ACTIVITIES FOR ALL SITES. OPERATIONS WORK DEFINED IN THIS TASK ORDER WILL BEGIN UPON GO-LIVE OF THE FIRST IOC SITE. Key points: 1. Significant investment in critical IT infrastructure sustainment. 2. Sole-source award raises questions about price discovery and competition. 3. Long duration suggests potential for cost overruns or evolving needs. 4. Focus on site deployment and operations points to ongoing system integration.

Value Assessment

Rating: questionable

The contract's fixed price of $174.4 million over nearly four years for IT sustainment is difficult to benchmark without specific service details. However, the lack of competition suggests potential for above-market pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and may prevent the government from securing the best possible value through competitive bidding.

Taxpayer Impact: The lack of competition in this large award raises concerns about taxpayer value, as alternative, potentially more cost-effective solutions may not have been explored.

Public Impact

Veterans may experience improved stability and performance of IT systems supporting their care. The long-term nature of the contract could lead to vendor lock-in. Taxpayers are funding a significant IT sustainment effort with limited transparency on cost-effectiveness. The Department of Veterans Affairs continues to rely on Oracle Health for critical IT infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Long contract duration
Lack of competition
High dollar value

Positive Signals

Ensures continuity of critical IT operations
Supports site deployment activities

Sector Analysis

This contract falls under Computer Systems Design Services, a broad IT category. The $174.4 million award over almost four years for sustainment is substantial, indicating a significant commitment to maintaining complex IT infrastructure.

Small Business Impact

The contract data does not indicate any specific provisions or set-asides for small businesses. The award to Oracle Health Government Services, Inc. suggests a focus on large, established vendors for this critical IT sustainment.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure the VA is receiving fair value and that the contractor is meeting all performance requirements. Regular performance reviews and cost audits would be prudent.

Related Government Programs

Computer Systems Design Services
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Sole-source award limits competition and price discovery.
High contract value over an extended period.
Lack of transparency on specific services and cost breakdown.
Potential for vendor lock-in.
No indication of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $174.4 million to ORACLE HEALTH GOVERNMENT SERVICES, INC.. THIS TO SHALL SUSTAIN THE SOFTWARE AND HARDWARE TECHNICAL SOLUTIONS THAT WERE INCORPORATED AS PART OF THE SITE DEPLOYMENT ACTIVITIES FOR ALL SITES. OPERATIONS WORK DEFINED IN THIS TASK ORDER WILL BEGIN UPON GO-LIVE OF THE FIRST IOC SITE.

Who is the contractor on this award?

The obligated recipient is ORACLE HEALTH GOVERNMENT SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $174.4 million.

What is the period of performance?

Start: 2020-06-03. End: 2024-05-31.

What specific IT hardware and software solutions are being sustained under this contract, and how do their costs compare to industry benchmarks?

The contract broadly covers sustainment for software and hardware technical solutions incorporated during site deployment. Without a detailed breakdown of specific systems, components, and service levels, a precise cost comparison to industry benchmarks is challenging. However, the sole-source nature of the award suggests a potential lack of competitive pressure to drive down costs, raising concerns about whether the $174.4 million represents optimal value.

What is the justification for awarding this significant contract on a sole-source basis, and what risks does this pose to the VA's ability to obtain competitive pricing?

The justification for a sole-source award is not provided in the data. This approach inherently limits price discovery, as the government does not benefit from competitive bidding. The primary risk is that the VA may be paying a premium for services that could be obtained at a lower cost through a competitive process, potentially leading to inefficient use of taxpayer funds.

How will the effectiveness of the sustained IT solutions be measured, particularly given the long duration and sole-source nature of the contract?

Effectiveness measurement will likely rely on defined performance metrics within the contract, such as uptime, response times, and issue resolution rates. However, the sole-source award and long duration necessitate robust oversight. The VA must actively monitor contractor performance against these metrics and conduct regular reviews to ensure the sustained solutions are meeting operational needs and delivering value, rather than simply maintaining the status quo.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Oracle Health Government Services Inc.

Address: 10200 ABILITIES WAY, KANSAS CITY, KS, 66111

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

Financial Breakdown

Contract Ceiling: $191,576,322

Exercised Options: $174,443,335

Current Obligation: $174,443,335

Subaward Activity

Number of Subawards: 73

Total Subaward Amount: $16,014,833

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10B18D5000

IDV Type: IDC

Timeline