HHS Awards $19.5M for Computing Infrastructure to Palmetto GBA, LLC
Contract Overview
Contract Amount: $19,534,891 ($19.5M)
Contractor: Palmetto GBA, LLC
Awarding Agency: Department of Health and Human Services
Start Date: 2024-05-30
End Date: 2026-05-29
Contract Duration: 729 days
Daily Burn Rate: $26.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: TWELVE MONTH (BASE YEAR) THREE TWELVE MONTH OPTION YEARS ONE SIX MONTH OPTION PERIOD AND ONE OPTIONAL SIX MONTH TRANSITION PERIOD
Place of Performance
Location: COLUMBIA, RICHLAND County, SOUTH CAROLINA, 29203
Plain-Language Summary
Department of Health and Human Services obligated $19.5 million to PALMETTO GBA, LLC for work described as: TWELVE MONTH (BASE YEAR) THREE TWELVE MONTH OPTION YEARS ONE SIX MONTH OPTION PERIOD AND ONE OPTIONAL SIX MONTH TRANSITION PERIOD Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract is for computing infrastructure, data processing, and web hosting services. 3. Palmetto GBA, LLC, based in South Carolina, is the awardee. 4. The contract duration is 729 days, covering a base year and option periods.
Value Assessment
Rating: good
The award amount of $19.5M over approximately two years appears reasonable for comprehensive computing infrastructure and data processing services. Benchmarking against similar large-scale IT service contracts would provide further validation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This method generally promotes competitive pricing and ensures the government receives the best value.
Taxpayer Impact: The competitive nature of the award is expected to yield fair pricing, benefiting taxpayers by avoiding inflated costs.
Public Impact
Ensures continued operation of critical Medicare and Medicaid IT systems. Supports data processing and web hosting essential for healthcare services. Potential impact on patient data access and system reliability. Award to a single vendor may limit future flexibility if needs change significantly.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential vendor lock-in if services are highly specialized.
- Reliance on a single provider for critical infrastructure.
Positive Signals
- Awarded through full and open competition.
- Clear definition of services for computing infrastructure and data processing.
Sector Analysis
This contract falls within the IT and data processing sector, a critical area for government operations. Spending benchmarks for similar cloud computing and data hosting services vary widely based on scale and complexity, but $19.5M over two years for a federal agency like CMS is within a typical range for robust infrastructure.
Small Business Impact
The contract was awarded under full and open competition and does not indicate any specific set-aside for small businesses. Therefore, the direct impact on small businesses is likely minimal unless they are subcontractors to the prime awardee.
Oversight & Accountability
The Centers for Medicare and Medicaid Services (CMS) is responsible for overseeing this contract. Standard government oversight mechanisms, including performance reviews and audits, should be in place to ensure compliance and value.
Related Government Programs
- Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
- Department of Health and Human Services Contracting
- Centers for Medicare and Medicaid Services Programs
Risk Flags
- Potential for vendor lock-in.
- Reliance on a single provider for critical infrastructure.
- Limited visibility into subcontractor performance if applicable.
- Long-term cost-effectiveness beyond the initial contract period.
Tags
computing-infrastructure-providers-data-, department-of-health-and-human-services, sc, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $19.5 million to PALMETTO GBA, LLC. TWELVE MONTH (BASE YEAR) THREE TWELVE MONTH OPTION YEARS ONE SIX MONTH OPTION PERIOD AND ONE OPTIONAL SIX MONTH TRANSITION PERIOD
Who is the contractor on this award?
The obligated recipient is PALMETTO GBA, LLC.
Which agency awarded this contract?
Awarding agency: Department of Health and Human Services (Centers for Medicare and Medicaid Services).
What is the total obligated amount?
The obligated amount is $19.5 million.
What is the period of performance?
Start: 2024-05-30. End: 2026-05-29.
What specific performance metrics are in place to ensure the quality and reliability of the computing infrastructure and data processing services provided by Palmetto GBA, LLC?
The contract likely includes Service Level Agreements (SLAs) that define specific performance metrics for uptime, response times, data security, and disaster recovery. These SLAs would be monitored by CMS to ensure Palmetto GBA, LLC meets its contractual obligations. Regular performance reviews and reporting requirements would also be part of the oversight process to track adherence to these metrics.
What are the potential risks associated with relying on a single vendor, Palmetto GBA, LLC, for critical computing infrastructure and data processing for CMS?
Key risks include vendor lock-in, where switching providers becomes difficult and costly. There's also a risk of service disruption if the vendor experiences financial instability or operational issues. Furthermore, a single vendor may have less incentive to innovate or offer competitive pricing in subsequent contract periods compared to a market with active competition.
How does this contract contribute to the overall effectiveness of the Centers for Medicare and Medicaid Services in delivering its mission?
This contract is crucial for the operational effectiveness of CMS, providing the foundational IT infrastructure necessary for managing Medicare and Medicaid programs. Reliable data processing and web hosting ensure the availability of essential services for beneficiaries, healthcare providers, and internal CMS operations, directly supporting the agency's mission.
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: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 17 TECHNOLOGY CIR, COLUMBIA, SC, 29203
Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $47,066,381
Exercised Options: $19,534,891
Current Obligation: $19,534,891
Actual Outlays: $15,540,221
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: 47QSMA20D08PV
IDV Type: FSS
Timeline
Start Date: 2024-05-30
Current End Date: 2026-05-29
Potential End Date: 2029-05-29 00:00:00
Last Modified: 2026-04-01
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