NIH awards $9.7M for ServiceNow software, maintenance, and support to Carahsoft Technology Corp

Contract Overview

Contract Amount: $9,736,284 ($9.7M)

Contractor: Carahsoft Technology Corp

Awarding Agency: Department of Health and Human Services

Start Date: 2023-01-10

End Date: 2026-01-09

Contract Duration: 1,095 days

Daily Burn Rate: $8.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SERVICENOW SOFTWARE LICENSING, MAINTENANCE AND USER SUPPORT

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $9.7 million to CARAHSOFT TECHNOLOGY CORP for work described as: SERVICENOW SOFTWARE LICENSING, MAINTENANCE AND USER SUPPORT Key points: 1. Contract awarded via a Blanket Purchase Agreement (BPA) Call, indicating a pre-negotiated agreement for specific services. 2. The contract is for software licensing, maintenance, and user support, crucial for IT infrastructure operations. 3. Carahsoft Technology Corp. is the sole awardee under this specific BPA Call, though the underlying BPA may have had broader competition. 4. The contract duration is three years, aligning with typical software lifecycle management needs. 5. The award uses a Firm Fixed Price (FFP) contract type, providing cost certainty for the government. 6. The North American Industry Classification System (NAICS) code 511210 points to Software Publishers, indicating the nature of the goods/services procured.

Value Assessment

Rating: good

The contract value of $9.7 million over three years for enterprise software licensing and support is within a reasonable range for government procurements of this nature. Benchmarking against similar ServiceNow contracts across federal agencies would provide a more precise value-for-money assessment. The firm fixed price structure helps manage cost fluctuations, but the absence of detailed cost breakdowns makes a granular price assessment challenging. The contract's value appears to be driven by the enterprise-wide licensing and ongoing support requirements for a critical IT platform.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a BPA Call under a Full and Open Competition. This suggests that the initial Blanket Purchase Agreement (BPA) was competed broadly, allowing all eligible responsible sources to submit offers. The specific call against the BPA likely involved a streamlined process, but the foundational competition ensures a degree of market vetting. The number of bidders for the original BPA is not specified here, but the 'full and open' designation implies a robust competitive environment was established.

Taxpayer Impact: A full and open competition for the underlying BPA generally leads to better pricing and value for taxpayers by leveraging market forces and encouraging multiple vendors to offer competitive terms.

Public Impact

The National Institutes of Health (NIH) benefits from this contract by securing essential software licenses and support for its IT operations. This contract ensures the continued availability and functionality of ServiceNow, a platform likely used for IT service management, workflow automation, and other critical administrative functions across NIH. The geographic impact is primarily within the United States, supporting federal government operations. Workforce implications include ensuring federal employees have the necessary tools and support to perform their duties efficiently.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if ServiceNow becomes deeply integrated into NIH's core IT infrastructure without regular re-competition of the underlying BPA.
Reliance on a single vendor for critical software and support could pose risks if the vendor experiences financial instability or significant changes in service delivery.
The specific terms and conditions of the underlying BPA are not detailed, which could impact flexibility and cost-effectiveness over time.

Positive Signals

The use of a BPA Call streamlines procurement for recurring needs, potentially reducing administrative burden and lead times.
Firm Fixed Price contract type provides budget certainty and shifts cost risk to the contractor.
Awarding to Carahsoft, a known government IT reseller, suggests established channels for software procurement and support.
The 'full and open' competition for the BPA indicates a structured approach to ensuring market access and competitive pricing.

Sector Analysis

This contract falls within the Software Publishers (NAICS 511210) sector, specifically concerning enterprise IT service management (ITSM) and workflow automation software. The market for such platforms is dominated by a few key players, with ServiceNow being a prominent leader. Government spending on enterprise software licenses and maintenance is substantial, often driven by the need for standardized, scalable, and secure IT solutions. Comparable spending benchmarks would involve looking at other large federal agencies' procurements for similar ITSM platforms.

Small Business Impact

This contract was awarded to Carahsoft Technology Corp., a large reseller of technology products. While Carahsoft itself is not a small business, government contracts often have subcontracting requirements. The data provided does not specify if small businesses are involved in the fulfillment of this contract or if there are specific small business set-aside provisions within the underlying BPA. Further investigation into the BPA's terms and Carahsoft's subcontracting plan would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program officials within the National Institutes of Health (NIH). The firm fixed price nature of the contract simplifies some aspects of financial oversight. Transparency is generally provided through contract award databases like FPDS.gov. The specific Inspector General jurisdiction would be that of the Department of Health and Human Services (HHS), which oversees NIH.

Related Government Programs

General Services Administration (GSA) Schedules
Enterprise Software Licenses
IT Service Management (ITSM) Software
Blanket Purchase Agreements (BPAs)

Risk Flags

Potential for scope creep if requirements are not clearly defined in the BPA Call.
Reliance on a single vendor for critical IT infrastructure software.
Need to ensure ongoing competitive pricing through the underlying BPA's lifecycle.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $9.7 million to CARAHSOFT TECHNOLOGY CORP. SERVICENOW SOFTWARE LICENSING, MAINTENANCE AND USER SUPPORT

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 $9.7 million.

What is the period of performance?

Start: 2023-01-10. End: 2026-01-09.

What is the track record of Carahsoft Technology Corp. in fulfilling federal contracts for ServiceNow products?

Carahsoft Technology Corp. is a well-established government IT reseller with a significant track record of delivering software and hardware solutions to federal agencies. They frequently hold contracts and BPAs for major software vendors, including ServiceNow. Their business model often involves partnering with software manufacturers to provide licensing, maintenance, and support to government clients. While this specific award is a BPA Call, Carahsoft's extensive experience suggests a high likelihood of successful performance. However, a detailed review of past performance evaluations for similar ServiceNow contracts awarded through Carahsoft would provide a more granular assessment of their specific performance history with this product line.

How does the $9.7 million contract value compare to other federal ServiceNow procurements?

The $9.7 million contract value for three years of ServiceNow licensing, maintenance, and support is a moderate-sized award within the federal IT landscape. Large federal agencies often procure ServiceNow solutions in the tens or even hundreds of millions of dollars over longer periods, encompassing broader modules and more extensive user bases. For instance, the Department of Defense or the Department of Homeland Security might have significantly larger ServiceNow contracts. This NIH award appears to be for a specific set of licenses and support, likely for a particular bureau or set of functions within NIH. Benchmarking against similar-sized agencies or specific NIH institutes' previous ServiceNow spending would offer a more precise comparison.

What are the primary risks associated with this ServiceNow contract for the NIH?

The primary risks associated with this ServiceNow contract include potential vendor lock-in, where NIH becomes heavily reliant on ServiceNow's ecosystem, making future transitions costly and complex. There's also a risk related to the specific scope of services; if the contract doesn't adequately cover all necessary user support or maintenance needs, operational disruptions could occur. Furthermore, the firm fixed price nature, while providing cost certainty, might disincentivize the vendor from offering proactive improvements or additional value beyond the contracted scope. Finally, reliance on a single vendor for such a critical platform introduces a risk if the vendor faces financial difficulties, security breaches, or significant changes in their product roadmap or support structure.

How effective is the use of a BPA Call for procuring ServiceNow software and support?

Using a BPA Call for procuring ServiceNow software and support can be highly effective, particularly when an agency has a pre-existing, broadly competed BPA in place. This method streamlines the acquisition process, reducing the time and administrative effort required compared to a full solicitation for each individual need. It allows agencies to leverage pre-negotiated terms and pricing, potentially leading to cost savings and faster deployment. The effectiveness hinges on the quality of the original BPA competition and the clarity of the scope defined in the BPA Call. If the BPA was well-competed and the call accurately reflects NIH's requirements, it can be an efficient and valuable procurement tool.

What is the historical spending pattern for ServiceNow at the NIH or similar agencies?

Historical spending patterns for ServiceNow at the NIH and similar large health-focused federal agencies typically show a consistent increase over time as agencies adopt digital transformation initiatives and recognize the platform's utility for IT service management, HR, and workflow automation. Agencies often start with specific modules (e.g., ITSM) and gradually expand their use. Spending can fluctuate based on budget cycles, new system implementations, or major upgrades. Without specific historical data for NIH's ServiceNow procurements, it's difficult to provide exact figures, but the trend across government has been towards increased adoption and investment in enterprise platforms like ServiceNow to improve operational efficiency and service delivery.

What are the implications of the 'Full and Open Competition' designation for this BPA Call?

The 'Full and Open Competition' designation, when applied to the underlying Blanket Purchase Agreement (BPA), signifies that the initial competition was open to all responsible sources. This generally leads to a more competitive environment, potentially resulting in better pricing, terms, and innovation compared to sole-source or limited-competition procurements. For this specific BPA Call, it means that the NIH is exercising an option under a contract vehicle that was established through broad market participation. While the call itself might be a simpler process, the foundation of the BPA ensures that the government has access to a competitive marketplace for these services.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

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

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: $12,497,184

Exercised Options: $9,736,284

Current Obligation: $9,736,284

Actual Outlays: $9,736,280

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 47QTCA22A0008

IDV Type: BPA

Timeline