NIH awards $6.3M for ServiceNow licenses to automate enterprise services, supporting agency-wide use

Contract Overview

Contract Amount: $6,302,878 ($6.3M)

Contractor: Carahsoft Technology Corp

Awarding Agency: Department of Health and Human Services

Start Date: 2024-06-01

End Date: 2026-05-31

Contract Duration: 729 days

Daily Burn Rate: $8.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SERVICENOW LICENSES TO SUPPORT THE NIH-WIDE USE OF THE ENTERPRISE PLATFORM FOR SERVICE AUTOMATION DEVELOPMENT

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $6.3 million to CARAHSOFT TECHNOLOGY CORP for work described as: SERVICENOW LICENSES TO SUPPORT THE NIH-WIDE USE OF THE ENTERPRISE PLATFORM FOR SERVICE AUTOMATION DEVELOPMENT Key points: 1. The contract leverages a firm-fixed-price structure, aiming for predictable costs. 2. Competition was full and open, suggesting a potentially competitive pricing environment. 3. The duration of the contract is two years, with an option for extension. 4. This award supports the National Institutes of Health's broader service automation strategy. 5. The primary vendor, Carahsoft Technology Corp, is a known reseller of government IT solutions. 6. The contract falls under the Software Publishers NAICS code, indicating a focus on software licensing.

Value Assessment

Rating: good

The contract value of $6.3 million for ServiceNow licenses over two years appears reasonable given the enterprise-wide scope. ServiceNow is a widely adopted platform for IT service management and workflow automation, and its licensing costs can be substantial. Benchmarking against similar large-scale government deployments of ServiceNow would provide a more precise value assessment. The firm-fixed-price nature of the award helps to control cost overruns, which is a positive indicator for value.

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 approach generally fosters a competitive environment, which can lead to better pricing and terms for the government. The specific number of bidders is not provided, but the open competition suggests a robust process was followed.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of securing the best possible price and terms for the required software licenses.

Public Impact

The National Institutes of Health (NIH) is the primary beneficiary, gaining access to essential software for service automation. The contract will enable the automation of enterprise-wide services, potentially improving efficiency and user experience. The geographic impact is national, as NIH operates across multiple locations. Workforce implications include enabling IT staff to leverage the platform for streamlined service delivery and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with a widely adopted enterprise platform like ServiceNow.
Reliance on a single reseller (Carahsoft) for licensing could limit direct negotiation with the software manufacturer.
The effectiveness of the automation depends heavily on NIH's implementation and adoption strategy.

Positive Signals

Leveraging a mature and widely-used platform like ServiceNow can accelerate service delivery improvements.
Firm-fixed-price contract provides cost certainty for the duration of the award.
Full and open competition suggests a competitive market was accessed for this procurement.

Sector Analysis

This contract falls within the Software Publishers sector, a critical component of the IT industry. The market for enterprise service management software, such as ServiceNow, is highly competitive, with several major players vying for government contracts. Spending in this area is driven by the government's ongoing efforts to modernize IT infrastructure, improve operational efficiency, and enhance cybersecurity. Comparable spending benchmarks would involve looking at other large federal agencies procuring similar enterprise software licenses.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a specific set-aside for this contract. While Carahsoft Technology Corp is a reseller, their role in subcontracting to small businesses for implementation or support services is not detailed here. The absence of a small business set-aside means opportunities for small businesses may be limited unless they are partners or subcontractors to the prime.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services' procurement and financial management offices. The firm-fixed-price nature of the award provides a degree of accountability by fixing the cost. Transparency is generally maintained through federal procurement databases where contract awards are published. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

General Services Administration (GSA) Schedules
Enterprise Resource Planning (ERP) Systems
IT Service Management (ITSM) Software
Cloud Computing Services

Risk Flags

Potential for vendor lock-in
Reliance on reseller limits direct negotiation
Effectiveness dependent on internal adoption and implementation

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $6.3 million to CARAHSOFT TECHNOLOGY CORP. SERVICENOW LICENSES TO SUPPORT THE NIH-WIDE USE OF THE ENTERPRISE PLATFORM FOR SERVICE AUTOMATION DEVELOPMENT

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 $6.3 million.

What is the period of performance?

Start: 2024-06-01. End: 2026-05-31.

What is Carahsoft Technology Corp's track record with federal ServiceNow contracts?

Carahsoft Technology Corp is a prominent government IT reseller that frequently secures contracts for software licenses, including ServiceNow, through various contract vehicles like GSA Schedules and IDIQs. Their business model often involves partnering with software manufacturers and then selling to federal agencies. While they have a strong presence in the federal market, specific performance metrics for their ServiceNow-related contracts are not publicly detailed in this award notice. Agencies typically evaluate past performance during the bidding process, and Carahsoft's consistent success suggests a generally positive track record in fulfilling government software procurement needs. Further analysis would require examining individual contract performance reports or agency feedback.

How does the $6.3 million value compare to similar ServiceNow enterprise-wide deployments in the federal government?

The $6.3 million award for ServiceNow licenses over two years represents a significant investment, but its value is context-dependent. Large federal agencies often procure ServiceNow licenses for thousands of users across multiple departments, leading to substantial costs. For instance, other agencies have awarded multi-million dollar contracts for ServiceNow over similar or longer durations. The 'enterprise-wide' scope mentioned for NIH suggests a broad deployment. Without knowing the exact number of users, modules licensed, and specific support levels included, a precise comparison is difficult. However, given ServiceNow's market position and licensing structure, this figure appears within the expected range for a large federal entity.

What are the primary risks associated with this ServiceNow license procurement?

Key risks include potential vendor lock-in, as migrating away from a deeply integrated enterprise platform like ServiceNow can be complex and costly. There's also a risk related to the effective utilization of the licenses; if NIH does not fully implement and adopt the platform's capabilities, the value for money may be diminished. Furthermore, reliance on a single reseller, Carahsoft, could limit direct negotiation leverage with ServiceNow itself, potentially impacting long-term cost-effectiveness. Finally, the success of the automation initiatives hinges on NIH's internal change management and technical expertise, which are external to the contract itself but critical for realizing the intended benefits.

How effective is the 'full and open competition' strategy in ensuring value for money for software licenses like ServiceNow?

Full and open competition is generally considered the most effective strategy for ensuring value for money in government procurements, including software licenses. It allows any qualified vendor to submit a bid, fostering a competitive environment that typically drives down prices and encourages innovation. For a widely adopted platform like ServiceNow, multiple resellers and potentially even direct bids (depending on the contract vehicle) could participate. This broad competition increases the likelihood that the government secures the best possible pricing, terms, and conditions. However, the effectiveness is also contingent on the clarity of the government's requirements and the evaluation criteria used to select the winning bid.

What are the historical spending patterns for ServiceNow licenses at NIH or similar agencies?

Historical spending patterns for ServiceNow licenses at NIH and similar agencies typically show a trend of increasing investment as agencies adopt the platform for broader service management and automation needs. Initial deployments might focus on IT Service Management (ITSM), but agencies often expand usage to areas like HR service delivery, facilities management, and cybersecurity operations. This expansion leads to higher license counts and contract values over time. Agencies like the Department of Defense, NASA, and other large civilian departments have awarded significant, often multi-year, contracts for ServiceNow, reflecting its status as a critical enterprise tool. Analyzing NIH's specific past ServiceNow spending would reveal the growth trajectory and total investment.

What is the significance of the 'firm fixed price' contract type for this ServiceNow license award?

The firm fixed price (FFP) contract type is significant because it establishes a ceiling price that the contractor must not exceed, and the government is obligated to pay the negotiated price regardless of the contractor's actual costs. For software licenses, where the cost of the product itself is relatively stable, FFP provides the government with cost certainty and predictability. This reduces the financial risk for the government compared to cost-reimbursement contracts. It incentivizes the contractor to manage its own costs efficiently to maintain profitability. For NIH, this means the $6.3 million budget is largely protected from cost overruns related to the license acquisition itself.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: 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: $10,124,878

Exercised Options: $6,302,878

Current Obligation: $6,302,878

Actual Outlays: $6,216,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 47QTCA22A0008

IDV Type: BPA

Timeline