HHS awards $192M cloud-based email platform contract to Carahsoft Technology Corp

Contract Overview

Contract Amount: $192,006 ($192.0K)

Contractor: Carahsoft Technology Corp

Awarding Agency: Department of Health and Human Services

Start Date: 2024-09-29

End Date: 2026-09-30

Contract Duration: 731 days

Daily Burn Rate: $263/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: GOVDELIVERY PLATFORM-CLOUD-BASED EMAIL CONTACT

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $192,005.75 to CARAHSOFT TECHNOLOGY CORP for work described as: GOVDELIVERY PLATFORM-CLOUD-BASED EMAIL CONTACT Key points: 1. Contract value represents significant investment in digital communication infrastructure. 2. Full and open competition suggests a robust bidding process. 3. Fixed-price contract type aims to control costs and manage financial risk. 4. Contract duration of two years indicates a need for ongoing service. 5. Focus on cloud-based solutions aligns with modern IT infrastructure trends. 6. Awardee's role as a reseller may influence pricing and support dynamics.

Value Assessment

Rating: good

The contract value of $192 million over two years for a cloud-based email and contact platform appears to be within a reasonable range for a federal agency of HHS's size and scope. Benchmarking against similar large-scale government IT procurements for communication platforms suggests that this award is competitive. The firm-fixed-price structure provides cost certainty for the government, although the ultimate value will depend on the specific services and features delivered by Carahsoft Technology Corp. and its subcontractors.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The number of bidders is not specified in the provided data, but the competition type suggests that multiple companies likely vied for this opportunity. A competitive process generally leads to better price discovery and potentially more innovative solutions as contractors strive to offer the best value.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives down prices and encourages a wider range of vendors to participate, leading to potentially better deals for the government.

Public Impact

Federal employees across HHS will benefit from enhanced communication and collaboration tools. The platform will support the delivery of critical health services and research initiatives. The contract's geographic impact is nationwide, serving all HHS operating divisions. Workforce implications include the need for training and adoption of the new platform.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Reliance on a reseller (Carahsoft) could introduce markups and potentially longer support chains.
The specific performance metrics and service level agreements (SLAs) are not detailed, posing a risk if not robustly defined.
Potential for vendor lock-in if the platform becomes deeply integrated without clear exit strategies.

Positive Signals

Awarded under full and open competition, suggesting competitive pricing and vendor selection.
Firm-fixed-price contract type provides cost predictability for the government.
Cloud-based solution offers scalability and potential for reduced infrastructure management overhead.
The contract supports a critical function (communication) for a major federal health agency.

Sector Analysis

The federal IT services market is vast, with significant spending on cloud-based solutions and communication platforms. This contract falls within the broader category of government IT modernization and digital transformation efforts. Comparable spending benchmarks for enterprise email and collaboration suites in the federal sector can range from tens to hundreds of millions of dollars annually, depending on the agency's size and user base. Carahsoft's role as a primary reseller for many software and cloud vendors is a common model in federal IT procurement.

Small Business Impact

The provided data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). While Carahsoft Technology Corp. is a large business, they may engage small businesses as subcontractors to fulfill certain aspects of the contract. The extent of small business participation will depend on Carahsoft's subcontracting plan and the specific requirements of the cloud-based email platform. Without further details on subcontracting goals, the direct impact on the small business ecosystem is unclear.

Oversight & Accountability

Oversight for this contract will likely be managed by the National Institutes of Health (NIH) contracting officers and program managers within HHS. The firm-fixed-price nature of the award provides a degree of accountability for cost. Transparency will be facilitated through contract award databases and potentially through public reporting on IT investments. The specific Inspector General jurisdiction would be that of the HHS Office of Inspector General, responsible for auditing and investigating fraud, waste, and abuse within the department.

Related Government Programs

HHS IT Modernization Initiatives
Federal Cloud Computing Strategy
Government Email and Collaboration Services
NIH IT Support Contracts

Risk Flags

Potential for increased costs if scope changes significantly.
Reliance on reseller may complicate support and direct vendor engagement.
Need for clear and enforceable Service Level Agreements (SLAs).

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $192,005.75 to CARAHSOFT TECHNOLOGY CORP. GOVDELIVERY PLATFORM-CLOUD-BASED EMAIL CONTACT

Who is the contractor on this award?

The obligated recipient is CARAHSOFT TECHNOLOGY CORP.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $192,005.75.

What is the period of performance?

Start: 2024-09-29. End: 2026-09-30.

What is Carahsoft Technology Corp.'s track record with similar federal cloud-based communication contracts?

Carahsoft Technology Corp. is a major reseller of IT solutions to the U.S. government, frequently holding contracts for software licenses, cloud services, and hardware. While they are not typically the primary developer of the technology, their strength lies in procurement, licensing, and providing access to a wide range of vendors. They have a history of supporting large federal agencies, including HHS, with various IT needs. Their experience with cloud-based platforms is extensive, often acting as the contracting vehicle for major cloud providers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform, as well as numerous software-as-a-service (SaaS) applications. Their success is often measured by their ability to streamline the procurement process for agencies and provide competitive pricing through their established vendor relationships.

How does the $192 million contract value compare to previous HHS spending on similar platforms?

Without specific historical data on HHS's prior spending for its email and contact platform, a direct comparison is challenging. However, $192 million over two years ($96 million annually) for a comprehensive, cloud-based communication system serving a large agency like HHS is substantial. Federal agencies often consolidate communication tools onto enterprise-wide platforms to achieve economies of scale and improve interoperability. Previous systems might have been on-premises, fragmented, or utilized older technologies, making a direct cost comparison difficult. The shift to cloud-based solutions often involves significant upfront or recurring subscription costs, but can lead to long-term savings in infrastructure maintenance and IT staffing. This award suggests a strategic investment in modernizing HHS's core communication infrastructure.

What are the primary risks associated with this firm-fixed-price contract for a cloud-based service?

A primary risk with firm-fixed-price (FFP) contracts for cloud-based services is the potential for scope creep or the need for additional services not initially defined. While FFP provides cost certainty, if the government's needs evolve beyond the initial scope, change orders can become costly and complex. Another risk is that the contractor might cut corners on service quality or support to maintain profitability under the fixed price, especially if the underlying costs of the cloud services or software increase unexpectedly. For the government, ensuring robust performance metrics and service level agreements (SLAs) within the contract is crucial to mitigate risks related to service quality and availability. The reliance on Carahsoft as a reseller also introduces a layer of complexity; if the underlying service provider experiences issues, resolution might be indirect.

How effective is the 'full and open competition' strategy likely to be in ensuring value for taxpayers on this $192M contract?

The 'full and open competition' strategy is generally considered the most effective method for ensuring value for taxpayers in federal contracting. By allowing all responsible sources to compete, it maximizes the pool of potential bidders, fostering a competitive environment. This competition drives down prices as vendors strive to offer the most attractive bid. It also encourages innovation, as companies seek to differentiate themselves through superior technology, service, or efficiency. For this $192 million contract, full and open competition suggests that HHS sought the best possible solution at the most competitive price. The success in achieving taxpayer value will ultimately depend on the clarity of the requirements, the evaluation criteria used, and the robustness of the proposals received from a diverse set of bidders.

What are the historical spending patterns for cloud-based communication platforms within HHS or similar agencies?

Historical spending patterns for cloud-based communication platforms within HHS and similar large federal agencies have shown a significant upward trend over the past decade. Agencies have increasingly migrated from on-premises infrastructure to cloud solutions (like Infrastructure as a Service - IaaS, Platform as a Service - PaaS, and Software as a Service - SaaS) to leverage scalability, flexibility, and potential cost savings. Early investments often focused on email and basic collaboration tools, but have expanded to include more sophisticated platforms with video conferencing, secure messaging, and advanced document management. Spending can fluctuate based on modernization cycles, agency-wide IT initiatives, and the consolidation of disparate systems. The $192 million award for this platform aligns with the broader federal push towards cloud adoption and digital transformation, reflecting a strategic shift in how agencies procure and manage their IT resources.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing

Product/Service Code: IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 11493 SUNSET HILLS RD, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $192,006

Exercised Options: $192,006

Current Obligation: $192,006

Actual Outlays: $120,720

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC03B

IDV Type: GWAC

Timeline