HHS Awards $48.5M IHS IT Operations Contract to KADIAK LLC Under Full and Open Competition

Contract Overview

Contract Amount: $48,480,333 ($48.5M)

Contractor: Kadiak LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2020-08-06

End Date: 2026-02-06

Contract Duration: 2,010 days

Daily Burn Rate: $24.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IHS ENTERPRISE IT OPERATIONS AND MAINTENANCE (EIT O&M) SUPPORT SERVICES

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20857

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $48.5 million to KADIAK LLC for work described as: IHS ENTERPRISE IT OPERATIONS AND MAINTENANCE (EIT O&M) SUPPORT SERVICES Key points: 1. Contract value of $48.5M for enterprise IT operations and maintenance. 2. Awarded via full and open competition, indicating a competitive bidding process. 3. Potential risk associated with the 'Other Computer Related Services' NAICS code, which can be broad. 4. The IT services sector is critical for government operations, but also prone to cost overruns if not managed effectively.

Value Assessment

Rating: good

The contract's value of $48.5M for a 6-year period (2020-2026) appears reasonable for comprehensive IT operations and maintenance support. Benchmarking against similar large-scale IT service contracts would provide a more precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' suggesting a competitive process that aimed to maximize participation. This method generally leads to better price discovery and value for the government.

Taxpayer Impact: The competitive award process is expected to yield a fair price, maximizing the value of taxpayer funds spent on essential IT services.

Public Impact

Ensures continued operation of critical IT infrastructure for the Indian Health Service. Supports the digital health records and administrative systems vital for patient care. Potential for improved service delivery through modern IT solutions. Impacts healthcare providers and patients relying on IHS digital services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Broad NAICS code (541519) could encompass a wide range of services, potentially leading to scope creep.
Long contract duration (6 years) may not fully adapt to rapidly changing IT needs.
Lack of small business participation noted (sb: false).

Positive Signals

Awarded through full and open competition, suggesting competitive pricing.
Firm Fixed Price contract type provides cost certainty.
Contract supports essential healthcare IT operations.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on IT operations and maintenance. Government spending in this area is substantial, with benchmarks varying widely based on the scope and complexity of services required.

Small Business Impact

The data indicates no specific small business participation in this contract (sb: false). Efforts to include small businesses in future IT procurements could enhance economic opportunities and competition.

Oversight & Accountability

The contract's duration and scope necessitate robust oversight to ensure performance standards are met and costs remain aligned with the defined objectives. Regular performance reviews and audits are crucial.

Related Government Programs

Other Computer Related Services
Department of Health and Human Services Contracting
Indian Health Service Programs

Risk Flags

Broad NAICS code.
Long contract duration.
No noted small business participation.
Potential for scope creep without stringent oversight.
Reliance on a single contractor for critical IT functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $48.5 million to KADIAK LLC. IHS ENTERPRISE IT OPERATIONS AND MAINTENANCE (EIT O&M) SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is KADIAK LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Indian Health Service).

What is the total obligated amount?

The obligated amount is $48.5 million.

What is the period of performance?

Start: 2020-08-06. End: 2026-02-06.

How does the awarded price compare to industry benchmarks for similar comprehensive IT operations and maintenance support services for a federal health agency of this size?

A precise comparison requires detailed analysis of specific service components and agency scale. However, $48.5M over six years for a federal health agency's enterprise IT O&M suggests a moderate to significant investment. Benchmarking against contracts for agencies like CMS or NIH with similar IT footprints would be informative, considering factors like user base, data sensitivity, and infrastructure complexity.

What are the specific risks associated with the broad 'Other Computer Related Services' NAICS code (541519) in this contract, and how are they being mitigated?

The primary risk of NAICS 541519 is its generality, potentially leading to scope creep if not clearly defined. Mitigation likely involves detailed Performance Work Statements (PWS), strict change control processes, and regular performance monitoring by the Contracting Officer's Representative (COR) to ensure services align with the intended IT operations and maintenance functions.

Given the firm-fixed-price structure, what mechanisms are in place to ensure the contractor remains incentivized to provide high-quality service and adopt cost-saving innovations throughout the contra

While FFP provides cost certainty, incentives for quality and innovation can be embedded through performance metrics, award-fee structures (if applicable, though not specified here), and clear contract clauses regarding service level agreements (SLAs). The government's active contract management, including regular performance evaluations and potential for future contract awards based on performance, also serves as an incentive.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 75H70419R00026

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Koniag, Inc.

Address: 3800 CENTERPOINT DR STE 502, ANCHORAGE, AK, 99503

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, HUBZone Firm, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $48,480,333

Exercised Options: $48,480,333

Current Obligation: $48,480,333

Actual Outlays: $42,172,114

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline