HHS awards $3.28M for network storage, raising questions about competition and value

Contract Overview

Contract Amount: $3,281,984 ($3.3M)

Contractor: Pistis LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2018-09-18

End Date: 2023-09-29

Contract Duration: 1,837 days

Daily Burn Rate: $1.8K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: NHLBI/ITAC - ADDITIONAL NETWORK ATTACHED STORAGE

Place of Performance

Location: DUMFRIES, PRINCE WILLIAM County, VIRGINIA, 22026

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $3.3 million to PISTIS LLC for work described as: NHLBI/ITAC - ADDITIONAL NETWORK ATTACHED STORAGE Key points: 1. The contract for network-attached storage was awarded on a sole-source basis, limiting competitive pressure. 2. The duration of the contract (over 5 years) suggests a long-term need for these services. 3. The fixed-price nature of the award provides some cost certainty, but the lack of competition hinders price discovery. 4. The award to PISTIS LLC for computer storage device manufacturing falls under NAICS code 334112. 5. The contract was issued as a purchase order, a common but less formal award mechanism. 6. The absence of small business set-aside flags indicates this was not specifically targeted for small business participation.

Value Assessment

Rating: questionable

Benchmarking the value of this $3.28 million contract is challenging due to the lack of competitive bidding. Without comparable bids, it's difficult to ascertain if PISTIS LLC's pricing reflects market rates or if a more competitive process could have yielded savings. The extended performance period of over five years for network-attached storage warrants scrutiny to ensure the technology remains relevant and cost-effective throughout its lifecycle. Further analysis would require access to internal cost data or a comparison with similar sole-source awards for comparable storage solutions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed openly. The data indicates it was 'NOT COMPETED UNDER SAP' (Simplified Acquisition Procedures), suggesting it may have been justified under specific exceptions to full and open competition. The lack of multiple bidders means there was no direct price comparison or negotiation driven by market forces, potentially leading to a higher price than if multiple vendors had vied for the contract.

Taxpayer Impact: Taxpayers may have paid a premium for this network storage solution due to the absence of competitive bidding. Without a competitive process, there is less assurance that the government secured the best possible price and value for taxpayer dollars.

Public Impact

The primary beneficiaries are likely the National Institutes of Health (NIH) within the Department of Health and Human Services (HHS), gaining access to necessary network storage. The services delivered include the provision and potentially maintenance of computer storage devices. The geographic impact is primarily within Virginia, where the contract is registered. Workforce implications are not explicitly detailed but may involve IT support staff for the storage infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source award limits opportunities for new market entrants.
Long contract duration could result in technology obsolescence.
Limited transparency on the justification for sole-source award.

Positive Signals

Awarded as a firm-fixed-price contract, providing cost predictability.
The contract addresses a clear need for network storage infrastructure.
Awarded to a single vendor, potentially simplifying management.

Sector Analysis

This contract falls within the IT sector, specifically focusing on computer storage device manufacturing and related services. The market for network-attached storage (NAS) is robust, with numerous vendors offering solutions ranging from small business to enterprise-grade. Spending in this area is critical for government agencies to manage vast amounts of data. Comparable spending benchmarks would typically involve analyzing other NAS procurements by federal agencies, looking at factors like capacity, performance, and vendor.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false) and was not awarded under programs specifically targeting small businesses (ss: false). This suggests that the procurement was open to all eligible vendors, or that the justification for a sole-source award did not prioritize small business participation. Consequently, there are no direct subcontracting implications for small businesses stemming from a small business set-aside.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Health and Human Services and the National Institutes of Health. As a purchase order, it is subject to internal agency financial controls and procurement regulations. Transparency regarding the justification for the sole-source award and the evaluation of value would be key areas for oversight. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal IT Infrastructure Procurement
Data Storage Solutions
Network Equipment Purchases
Department of Health and Human Services IT Contracts
National Institutes of Health Technology Spending

Risk Flags

Sole-source award
Lack of competitive bidding
Extended contract duration
Potential for overpricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $3.3 million to PISTIS LLC. NHLBI/ITAC - ADDITIONAL NETWORK ATTACHED STORAGE

Who is the contractor on this award?

The obligated recipient is PISTIS LLC.

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 $3.3 million.

What is the period of performance?

Start: 2018-09-18. End: 2023-09-29.

What is the track record of PISTIS LLC in securing federal contracts, particularly for IT hardware?

PISTIS LLC has secured federal contracts, including this significant award from the National Institutes of Health. While specific details on their entire contract history require a deeper dive into federal procurement databases, this award indicates they are capable of providing IT hardware solutions. Further analysis would involve examining their past performance on similar contracts, including delivery timelines, quality of goods, and adherence to contract terms. Understanding their experience with large-scale storage solutions would provide better context for this specific award.

How does the $3.28 million cost compare to similar network-attached storage procurements?

Direct comparison of the $3.28 million cost is difficult without knowing the specific specifications, capacity, and performance metrics of the network-attached storage procured. However, the fact that this was a sole-source award means there was no competitive bidding process to establish a market-based price. Typically, sole-source contracts can be more expensive than competitively awarded ones. To benchmark effectively, one would need to identify similar sole-source or competitively awarded contracts for comparable storage solutions from other federal agencies, considering factors like data throughput, storage capacity (in terabytes or petabytes), redundancy features, and warranty periods.

What are the primary risks associated with a sole-source award for IT hardware?

The primary risks associated with a sole-source award for IT hardware include potential overpricing due to lack of competition, reduced incentive for the vendor to innovate or provide superior service, and a lack of market validation for the chosen solution. There's also a risk that the selected hardware might not be the most technologically advanced or cost-effective option available. Furthermore, sole-source awards can limit opportunities for other vendors, potentially stifling market competition in the long run. Agencies must have robust justification processes to ensure sole-source awards are truly necessary and in the government's best interest.

How effective is the current network storage solution likely to be given its 5-year duration?

The effectiveness of a network storage solution over a 5-year duration is contingent on several factors, including the initial technology chosen, the vendor's support, and the evolving needs of the agency. Given the rapid pace of technological advancement in data storage, there's a risk that the solution could become outdated or insufficient within this timeframe. However, if the initial procurement included robust scalability options, strong vendor support, and was based on reliable, industry-standard technology, it could remain effective. Regular performance reviews and potential upgrade paths would be crucial to ensure continued effectiveness and value.

What is the historical spending pattern for network-attached storage at NIH?

Analyzing historical spending patterns for network-attached storage at the National Institutes of Health (NIH) would require accessing and aggregating procurement data over several fiscal years. This would involve identifying all contracts related to data storage, network-attached storage, and similar IT infrastructure. Trends could reveal whether NIH consistently relies on sole-source awards for storage, the average contract values, the primary vendors used, and the typical duration of such contracts. Understanding these patterns can help identify potential areas for cost savings, opportunities for increased competition, or shifts in technology adoption.

What is the justification for awarding this contract as a sole-source purchase order?

The provided data states the contract was 'NOT COMPETED UNDER SAP' and was a 'PURCHASE ORDER', indicating it was not a full and open competition. The specific justification for this sole-source award is not detailed in the provided data. Federal procurement regulations allow for sole-source awards under specific circumstances, such as when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. Without further documentation from the agency (e.g., a Justification and Approval document), the precise reason for bypassing competition remains unknown.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Computer Storage Device Manufacturing

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 75N92018Q0189

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 17321 JEFFERSON DAVIS HWY STE 315, DUMFRIES, VA, 22026

Business Categories: 8(a) Program Participant, Black American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $3,281,984

Exercised Options: $3,281,984

Current Obligation: $3,281,984

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline