HHS awards $16M for data processing and hosting services to Healthverity Inc

Contract Overview

Contract Amount: $16,048,865 ($16.0M)

Contractor: Healthverity Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2023-07-21

End Date: 2026-07-18

Contract Duration: 1,093 days

Daily Burn Rate: $14.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PPRL SERVICES

Place of Performance

Location: PHILADELPHIA, PHILADELPHIA County, PENNSYLVANIA, 19103

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $16.0 million to HEALTHVERITY INC for work described as: PPRL SERVICES Key points: 1. Contract awarded on a sole-source basis, raising questions about potential cost savings through competition. 2. The contract duration of nearly three years suggests a need for sustained data processing capabilities. 3. The fixed-price contract type aims to provide cost certainty for the government. 4. The specific services fall under computing infrastructure and data processing, a critical area for public health. 5. The award to a single vendor warrants scrutiny regarding market availability and alternative solutions. 6. The value of the contract, while significant, needs to be benchmarked against similar data services.

Value Assessment

Rating: fair

The contract value of $16 million over approximately three years for data processing and hosting services appears to be within a reasonable range for specialized IT infrastructure. However, without a competitive bidding process, it is difficult to definitively assess if this represents the best value for the government. Benchmarking against similar sole-source awards for comparable services would be necessary for a more precise evaluation. The fixed-price nature of the contract provides some cost predictability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that the Centers for Disease Control and Prevention (CDC) did not solicit bids from multiple vendors. This approach is typically used when only one vendor can provide the required services, often due to proprietary technology, unique capabilities, or urgent needs. The lack of competition means that price discovery through market forces was bypassed, potentially leading to higher costs than if multiple vendors had competed.

Taxpayer Impact: Taxpayers may not be receiving the most cost-effective solution due to the absence of a competitive bidding process. This could mean that a portion of the $16 million award might have been saved if alternative vendors had the opportunity to offer their services and pricing.

Public Impact

The Centers for Disease Control and Prevention (CDC) will benefit from enhanced data processing and hosting capabilities, crucial for its public health initiatives. Services delivered include essential computing infrastructure, data processing, and web hosting, supporting the agency's data-intensive operations. The geographic impact is national, as the CDC's data infrastructure supports its nationwide public health monitoring and response efforts. The contract supports the IT workforce within the contractor's organization and potentially indirectly supports public health professionals who rely on the data services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits opportunities for other vendors and potentially higher cost savings.
Lack of competition makes it difficult to benchmark pricing against market alternatives.
The specific nature of the services may create vendor lock-in, reducing future flexibility.

Positive Signals

Fixed-price contract provides cost certainty for the government.
The contract duration suggests a stable and ongoing need for these critical data services.
Awarded to a single vendor implies specialized capabilities meeting specific agency requirements.

Sector Analysis

The contract falls within the IT and data services sector, specifically focusing on computing infrastructure, data processing, and web hosting. This is a rapidly evolving market with significant government spending. Comparable spending benchmarks for similar cloud hosting and data management services can vary widely based on scale, security requirements, and service level agreements. The market includes large cloud providers as well as specialized data analytics firms.

Small Business Impact

There is no indication that this contract involved small business set-asides or subcontracting opportunities. As a sole-source award, it is unlikely that small businesses were specifically targeted for participation. Further analysis would be needed to determine if the prime contractor has any small business subcontracting plans in place.

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). The contract's performance will likely be monitored through regular progress reports and adherence to the terms and conditions of the definitive contract. Transparency is facilitated by public contract databases, but detailed operational oversight specifics are not publicly available.

Related Government Programs

HHS IT Infrastructure Services
CDC Data Management Contracts
Federal Cloud Computing Services
Government Data Hosting Solutions

Risk Flags

Sole-source award raises concerns about competition and potential cost savings.
Lack of transparency in the justification for sole-source procurement.
Potential for vendor lock-in with specialized data services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $16.0 million to HEALTHVERITY INC. PPRL SERVICES

Who is the contractor on this award?

The obligated recipient is HEALTHVERITY INC.

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 $16.0 million.

What is the period of performance?

Start: 2023-07-21. End: 2026-07-18.

What is Healthverity Inc.'s track record with federal contracts, particularly within HHS?

Healthverity Inc. has a history of receiving federal contracts, primarily within the Department of Health and Human Services (HHS). While this specific contract is for a significant amount, a deeper dive into their past performance, including contract values, types, and agencies served, would provide a clearer picture of their experience and reliability. Analyzing past performance reviews and any reported issues or successes on previous federal awards would be crucial for assessing their suitability and performance on this current $16 million contract. Information on their prior work with CDC specifically would also be valuable.

How does the $16 million value compare to similar data processing and hosting contracts awarded by the government?

Benchmarking the $16 million contract value requires comparing it to similar definitive contracts for computing infrastructure, data processing, and web hosting services awarded by federal agencies. Given that this is a sole-source award, direct price comparisons are challenging. However, by examining contracts with comparable scope, duration (nearly three years), and service level agreements, an assessment can be made. If similar services were procured competitively, the average price per year or per unit of service could offer a benchmark. Without such competitive data, it's difficult to ascertain if $16 million represents a premium or a fair market price for these specialized services.

What are the primary risks associated with a sole-source award for critical data services?

The primary risks associated with a sole-source award for critical data services like those provided by Healthverity Inc. include potential overpayment due to the lack of competitive pricing, reduced incentive for the contractor to innovate or provide exceptional service, and vendor lock-in. Taxpayers may bear a higher cost than necessary. Furthermore, if the sole-source justification is weak or if alternative solutions exist, it raises concerns about the efficiency and effectiveness of government procurement. Dependence on a single vendor can also pose risks if that vendor experiences financial difficulties or service disruptions.

How effective are the CDC's data processing and hosting services likely to be under this contract?

The effectiveness of the CDC's data processing and hosting services under this contract hinges on Healthverity Inc.'s performance and the adequacy of the contract's service level agreements (SLAs). As a sole-source award, the CDC has presumably determined that Healthverity possesses unique capabilities essential for their operations. The fixed-price nature of the contract incentivizes the contractor to manage costs efficiently. However, without competitive pressure, the impetus for exceeding standard service levels might be reduced. Ongoing monitoring by the CDC and clear performance metrics within the contract will be critical to ensuring effectiveness and meeting public health data needs.

What are the historical spending patterns for computing infrastructure and data processing services at the CDC?

Analyzing historical spending patterns for computing infrastructure and data processing services at the CDC is essential for contextualizing the $16 million award. Understanding the agency's typical investment in these areas, whether through competitive or sole-source contracts, can reveal trends in technology adoption, vendor reliance, and overall budget allocation. If historical spending has been consistently high for similar services, this award might align with established patterns. Conversely, a significant increase or deviation from past spending could warrant further investigation into the reasons behind the change, such as new program requirements or evolving technological needs.

What specific data types and volumes will Healthverity Inc. be processing and hosting for the CDC?

The specific data types and volumes Healthverity Inc. will be processing and hosting for the CDC are not detailed in the provided data. However, given the CDC's mission, it is highly probable that the contract involves sensitive public health data, epidemiological information, research data, and potentially personally identifiable information (PII) or protected health information (PHI). The volume could range from terabytes to petabytes, depending on the specific programs supported. Understanding the nature and scale of this data is crucial for assessing security requirements, compliance obligations (like HIPAA), and the overall criticality of the services provided.

Industry Classification

NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 75D301-23-R-72592

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1818 MARKET ST, PHILADELPHIA, PA, 19103

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

Financial Breakdown

Contract Ceiling: $16,400,487

Exercised Options: $16,048,865

Current Obligation: $16,048,865

Actual Outlays: $9,276,481

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline