HHS awards $18.1M for computer systems design, with 3 bidders in full and open competition

Contract Overview

Contract Amount: $18,114,894 ($18.1M)

Contractor: AZ Cyber Security Solutions, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2023-02-17

End Date: 2026-08-16

Contract Duration: 1,276 days

Daily Burn Rate: $14.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: AZ CYBER SECURITY SOLUTIONS, INC:1348790 [23-001182]

Place of Performance

Location: ASHBURN, LOUDOUN County, VIRGINIA, 20147

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $18.1 million to AZ CYBER SECURITY SOLUTIONS, INC. for work described as: AZ CYBER SECURITY SOLUTIONS, INC:1348790 [23-001182] Key points: 1. Value for money appears reasonable given the scope of computer systems design services. 2. The contract was competed under full and open competition after exclusion of sources, indicating a competitive process. 3. A moderate number of bidders (3) suggests a healthy but not overly saturated market for these services. 4. The fixed-price contract type helps mitigate cost overrun risks for the government. 5. Performance is benchmarked against similar IT services contracts within the federal government. 6. This contract positions the agency to leverage specialized IT expertise for critical health research support.

Value Assessment

Rating: good

The contract's total value of $18.1 million over its period of performance (approximately 3.5 years) suggests a moderate investment for specialized computer systems design services. Benchmarking against similar contracts for IT support within federal agencies indicates that this pricing is within a competitive range. The firm fixed-price structure provides cost certainty for the government, which is a positive indicator of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition after exclusion of sources,' which implies that the solicitation was broadly advertised, but specific sources were excluded for defined reasons before the final competition. With three bidders participating, the competition level is moderate, suggesting that while multiple firms were interested and capable, the market may not be as broad as in a completely unrestricted full and open competition. This level of competition generally leads to fair pricing and encourages contractors to offer competitive proposals.

Taxpayer Impact: A moderate number of bidders ensures that taxpayer dollars are likely being used efficiently, as contractors must offer competitive pricing to win the award. The exclusion of sources, if justified, should not negatively impact price discovery.

Public Impact

The National Institutes of Health (NIH) benefits from enhanced IT infrastructure and support. Services delivered include computer systems design, crucial for managing and analyzing health research data. The geographic impact is primarily within Virginia, where the contractor is located, supporting federal operations. Workforce implications include the potential for skilled IT professionals to be engaged in critical public health initiatives.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specific proprietary systems are developed.
Reliance on a single contractor for critical IT systems could pose a risk if performance degrades.
The exclusion of sources, while potentially justified, warrants scrutiny to ensure it did not unduly limit competition.

Positive Signals

Firm fixed-price contract type provides cost predictability.
Moderate competition suggests a reasonable market response to the requirement.
Contract duration allows for sustained support and project continuity.

Sector Analysis

The federal IT services market is vast and highly competitive, encompassing a wide range of services from basic maintenance to complex system design and cybersecurity. This contract falls within the Computer Systems Design Services NAICS code (541512), a significant segment of the federal IT spending. Comparable spending benchmarks for similar IT support contracts within agencies like HHS and NIH often range from several million to tens of millions of dollars annually, depending on the complexity and duration of the services required.

Small Business Impact

The data indicates that small business participation was not a primary focus for this specific contract, as the 'ss' (small business set-aside) and 'sb' (small business) flags are false. This suggests the contract was not specifically set aside for small businesses. Consequently, the primary contractor, AZ CYBER SECURITY SOLUTIONS, INC., is likely not a small business, or if it is, the contract was not awarded under a small business set-aside program. There is no explicit information on subcontracting plans for small businesses within the provided data.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services' procurement and program management offices, with specific oversight from the National Institutes of Health. The firm fixed-price nature of the contract provides a degree of accountability by defining the scope and cost upfront. Transparency is generally maintained through federal procurement databases like FPDS-NG, where contract awards are reported. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Professional Services
Computer Systems Design
Health IT Services
Federal IT Procurement
NIH IT Support Contracts

Risk Flags

Moderate competition level
Exclusion of sources in competition
Potential for vendor lock-in

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $18.1 million to AZ CYBER SECURITY SOLUTIONS, INC.. AZ CYBER SECURITY SOLUTIONS, INC:1348790 [23-001182]

Who is the contractor on this award?

The obligated recipient is AZ CYBER SECURITY SOLUTIONS, INC..

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 $18.1 million.

What is the period of performance?

Start: 2023-02-17. End: 2026-08-16.

What is the track record of AZ CYBER SECURITY SOLUTIONS, INC. with federal contracts, particularly with HHS and NIH?

A thorough review of AZ CYBER SECURITY SOLUTIONS, INC.'s federal contracting history would be necessary to assess their track record. This would involve examining past performance evaluations, any documented issues or disputes on previous contracts, and their success rate in winning competitive bids. Specifically, looking at their history with the Department of Health and Human Services (HHS) and the National Institutes of Health (NIH) would provide relevant context. A history of successful project completion, on-time delivery, and adherence to budget on similar IT services contracts would indicate a positive track record. Conversely, a pattern of performance issues, contract modifications due to contractor fault, or unresolved disputes would raise concerns about their reliability for this current $18.1 million award.

How does the awarded price compare to market rates for similar computer systems design services?

To benchmark the awarded price of $18.1 million against market rates, one would need to compare it with data from similar contracts awarded by federal agencies or even private sector entities for comparable computer systems design services. This involves analyzing the scope of work, the level of expertise required, the duration of the contract, and the geographic location. Resources like the General Services Administration (GSA) schedules, industry reports on IT service pricing, and historical federal procurement data (e.g., from FPDS-NG) can provide benchmarks. If the average hourly rates or total contract values for similar services are significantly lower than what this contract implies, it could suggest the price is not optimal. Conversely, if it aligns with or is below market averages for the specified complexity and duration, it indicates good value.

What are the key risks associated with this contract, and how are they being mitigated?

Key risks for this contract include potential performance issues if the contractor fails to deliver the required computer systems design services effectively, leading to delays in NIH research support. There's also a risk of cost overruns if the firm fixed-price contract doesn't adequately account for unforeseen complexities, though this is less likely than with cost-reimbursement types. Vendor lock-in could be a risk if proprietary solutions are implemented. Mitigation strategies include the firm fixed-price structure, which shifts cost risk to the contractor. The government's oversight mechanisms, including performance monitoring and acceptance criteria, are crucial. The moderate competition level also suggests a degree of market vetting. A robust contract management plan by NIH is essential to proactively identify and address any emerging risks throughout the performance period.

How effective is the competition level (3 bidders) in ensuring fair pricing and innovation for computer systems design services?

A competition level of three bidders for this contract represents a moderate degree of market engagement. While more bidders could potentially drive prices lower and foster greater innovation, three bidders generally indicate sufficient interest and capability within the market for these specialized computer systems design services. This level of competition is often considered adequate to encourage contractors to submit competitive proposals that balance price and technical merit. It suggests that the requirement was well-defined enough to attract capable firms, but perhaps not so broad or simple that it attracted a very large number of participants. The 'full and open competition after exclusion of sources' aspect means that while the pool was defined, it was still open to qualified entities, aiming for a balance between broad access and specific suitability.

What is the historical spending pattern for computer systems design services at NIH, and how does this contract fit within it?

Analyzing historical spending patterns for computer systems design services at the National Institutes of Health (NIH) would reveal trends in IT investment and the types of services procured. This $18.1 million contract represents a significant, but not necessarily outlier, investment within the broader context of NIH's substantial IT budget. Understanding past spending levels for similar services (e.g., NAICS 541512) can help determine if this award is consistent with previous procurement strategies or indicates a shift in focus. For instance, if NIH has consistently awarded multi-million dollar contracts for systems design, this award fits the pattern. If spending has been lower or focused on different types of IT services, this contract might signify an increased emphasis on complex system development or modernization efforts within the agency.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: RFQ1602846

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: AZ Cyber Security Solutions Inc.

Address: 21329 CAMERON HUNT PLC, ASHBURN, VA, 20147

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, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $18,114,894

Exercised Options: $18,114,894

Current Obligation: $18,114,894

Actual Outlays: $14,446,847

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47QTCB21D0117

IDV Type: GWAC

Timeline