HHS awards $413M contract for DCIPHER Ecosystem IT services to I3 FEDERAL LLC

Contract Overview

Contract Amount: $413,492,028 ($413.5M)

Contractor: I3 Federal LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2022-09-30

End Date: 2026-09-29

Contract Duration: 1,460 days

Daily Burn Rate: $283.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: DCIPHER ECOSYSTEM

Place of Performance

Location: ATLANTA, DEKALB County, GEORGIA, 30329

State: Georgia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $413.5 million to I3 FEDERAL LLC for work described as: DCIPHER ECOSYSTEM Key points: 1. Contract value represents a significant investment in health IT infrastructure. 2. Competition was full and open, suggesting potential for competitive pricing. 3. The contract duration of four years allows for sustained service delivery. 4. Fixed-price contract type shifts performance risk to the contractor. 5. The award is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 6. The specific NAICS code (541519) indicates a broad range of computer-related services.

Value Assessment

Rating: good

The total contract value of $413.5 million over four years averages to approximately $103.4 million annually. Benchmarking this against similar large-scale health IT contracts is challenging without more specific service details. However, the fixed-price nature of the contract suggests that the government has negotiated a set price for defined services, which can be advantageous if the contractor can deliver efficiently. The awarded amount appears reasonable for a comprehensive IT ecosystem supporting a major federal health agency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition after exclusion of sources, indicating that multiple vendors were likely solicited and had the opportunity to bid. The specific mention of 'after exclusion of sources' might imply a prior limited competition or a specific justification for excluding certain vendors, but the overall designation is full and open. The presence of multiple bidders in a full and open competition generally fosters price discovery and can lead to more competitive pricing for the government.

Taxpayer Impact: A full and open competition process is generally favorable for taxpayers as it maximizes the pool of potential offerors, increasing the likelihood of receiving competitive bids and achieving better value for the government's investment.

Public Impact

The DCIPHER Ecosystem likely supports critical public health data management and analysis for the CDC. Benefits include enhanced disease surveillance, outbreak response, and public health research capabilities. The services delivered are expected to improve the efficiency and effectiveness of the CDC's operations. The geographic impact is national, supporting public health initiatives across the United States. Workforce implications may include the need for specialized IT personnel within the CDC and its contractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if requirements are not clearly defined within the delivery order.
Dependence on a single contractor for critical IT infrastructure could pose a risk if performance falters.
Ensuring ongoing alignment with evolving public health data needs and technological advancements.

Positive Signals

The fixed-price contract structure incentivizes contractor efficiency and cost control.
Full and open competition suggests a robust market for these services.
The multi-year duration allows for stable service provision and potential for long-term partnership.

Sector Analysis

The health IT sector is a rapidly growing and critical component of federal spending, particularly for agencies like the CDC. This contract falls within the broader IT services market, specifically focusing on data management, analysis, and related computer services. The total contract value of over $400 million positions it as a significant award within this sector. Comparable spending benchmarks would typically involve other large-scale IT modernization or data infrastructure projects within federal health agencies, which often run into hundreds of millions of dollars.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a primary set-aside criterion for this specific award. This suggests the contract was not specifically targeted towards small businesses. There is no explicit information on subcontracting plans for small businesses within this data snippet. The absence of small business set-aside may mean that larger, established IT firms were the primary focus of the competition, potentially limiting direct opportunities for smaller, specialized companies unless they are part of a larger subcontracting team.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Health and Human Services (HHS) and the Centers for Disease Control and Prevention (CDC). As a delivery order under an IDIQ, the contracting officer and program managers will be responsible for monitoring performance, ensuring compliance with contract terms, and approving deliverables. Transparency is generally facilitated through contract databases like FPDS.gov. The extent of Inspector General (IG) jurisdiction would depend on any specific audits or investigations initiated by the HHS OIG.

Related Government Programs

CDC IT Modernization Efforts
Public Health Data Infrastructure
Health Information Technology Services
Federal Data Management Contracts
IT Services for Health Agencies

Risk Flags

Contract performance risk
Technological obsolescence risk
Vendor lock-in risk
Requirement definition risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $413.5 million to I3 FEDERAL LLC. DCIPHER ECOSYSTEM

Who is the contractor on this award?

The obligated recipient is I3 FEDERAL LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Disease Control and Prevention).

What is the total obligated amount?

The obligated amount is $413.5 million.

What is the period of performance?

Start: 2022-09-30. End: 2026-09-29.

What is the specific nature of the 'DCIPHER ECOSYSTEM' and its importance to the CDC?

The DCIPHER ECOSYSTEM (Data, Collaboration, Integration, Planning, Health, Evaluation, Reporting) is a critical initiative by the Centers for Disease Control and Prevention (CDC) aimed at modernizing and integrating its vast data systems. Its importance lies in enabling more efficient data collection, analysis, and dissemination for public health surveillance, research, and response. This includes tracking disease outbreaks, understanding health trends, and informing public health policy. The contract awarded to I3 FEDERAL LLC likely supports the development, maintenance, and enhancement of this complex ecosystem, ensuring the CDC can effectively leverage data to protect and promote public health.

How does the fixed-price contract type (PT: FIRM FIXED PRICE) benefit the government in this scenario?

A Firm Fixed Price (FFP) contract type is generally advantageous for the government when the scope of work is well-defined and unlikely to change significantly. In this case, it shifts the primary risk of cost overruns to the contractor, I3 FEDERAL LLC. The government agrees to pay a set price for the specified goods or services, regardless of the contractor's actual costs. This provides budget certainty and incentivizes the contractor to manage its resources efficiently and control costs to maximize its profit margin. For the CDC's DCIPHER Ecosystem, an FFP contract provides predictability in spending for IT services over the contract's duration, assuming the requirements are clearly delineated.

What does 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' imply about the procurement process?

This procurement designation indicates that the contract was initially intended for full and open competition, meaning all responsible sources were permitted to submit offers. However, 'after exclusion of sources' suggests that at some point, certain potential offerors were excluded from the competition. This exclusion must be justified under specific circumstances outlined in federal acquisition regulations, such as a prior contract where performance issues arose, or if only a limited number of vendors possess the necessary unique capabilities. Despite the exclusion, the final award was made under a process that still allowed for broad competition among the remaining eligible sources, aiming to achieve the best value for the government.

What are the potential risks associated with a four-year contract for complex IT services like the DCIPHER Ecosystem?

A four-year contract for complex IT services, while providing stability, carries inherent risks. Technological advancements can rapidly outpace the initial scope, potentially making the system outdated or requiring costly modifications. Contractor performance is a key risk; if I3 FEDERAL LLC underperforms, it could disrupt critical CDC operations. There's also the risk of vendor lock-in, where the government becomes heavily reliant on the incumbent contractor, making future transitions difficult or expensive. Furthermore, if the initial requirements gathering or pricing was flawed, the government might not be receiving optimal value throughout the contract's life. Regular performance monitoring and clear communication channels are crucial to mitigate these risks.

How does this contract compare to other large federal IT service awards, in terms of scale and scope?

With a total value of $413.5 million over four years, this contract is a substantial award within the federal IT services landscape. It is comparable in scale to other major IT modernization, system integration, or managed services contracts awarded to large federal agencies like the Department of Defense, IRS, or other HHS components. The scope, focusing on a 'DCIPHER ECOSYSTEM' for the CDC, suggests a comprehensive approach to data management and IT infrastructure, likely encompassing software development, system maintenance, cybersecurity, and data analytics. While the dollar amount is significant, the specific value proposition depends heavily on the criticality and complexity of the services delivered relative to the agency's mission needs.

What is the significance of the awarded amount ($413M) in the context of the CDC's overall IT budget?

The $413.5 million awarded to I3 FEDERAL LLC for the DCIPHER Ecosystem represents a significant portion of the CDC's IT spending. While the CDC's total IT budget fluctuates annually, major ecosystem contracts like this often constitute a substantial investment. For context, federal agencies typically allocate a considerable percentage of their overall budget to IT operations and modernization. This single contract, averaging over $100 million per year, underscores the critical role of IT infrastructure in supporting the CDC's public health mission. Understanding its proportion within the broader CDC IT budget would require analyzing the agency's annual financial reports and IT investment plans.

Industry Classification

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

Product/Service Code: IT AND TELECOM - PLATFORM

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 75D301-22-R-72452

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 12030 HENDERSON RD, CLIFTON, VA, 20124

Business Categories: Category Business, Limited Liability Corporation, Partnership or Limited Liability Partnership, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $535,667,441

Exercised Options: $413,492,028

Current Obligation: $413,492,028

Actual Outlays: $413,492,028

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SD31B

IDV Type: GWAC

Timeline