HHS awards $7.26M for Enterprise IT Services, focusing on cloud management and security

Contract Overview

Contract Amount: $7,262,530 ($7.3M)

Contractor: Dssg LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2024-08-22

End Date: 2026-10-27

Contract Duration: 796 days

Daily Burn Rate: $9.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 12

Pricing Type: LABOR HOURS

Sector: IT

Official Description: ENTERPRISE IT SERVICES (EITS) TO PROVIDE OPERATIONAL SUPPORT TO MANAGE EXISTING CLOUD ENVIRONMENT, SUPPORT MIGRATION EFFORTS OF OTHER WEBSITES AND WEB APPLICATIONS INTO THE ENVIRONMENT, ENSURE THE SECURITY AND COMPLIANCE OF THE ENVIRONMENT, AND SUPPO

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20170

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $7.3 million to DSSG LLC for work described as: ENTERPRISE IT SERVICES (EITS) TO PROVIDE OPERATIONAL SUPPORT TO MANAGE EXISTING CLOUD ENVIRONMENT, SUPPORT MIGRATION EFFORTS OF OTHER WEBSITES AND WEB APPLICATIONS INTO THE ENVIRONMENT, ENSURE THE SECURITY AND COMPLIANCE OF THE ENVIRONMENT, AND SUPPO Key points: 1. Contract focuses on operational support for an existing cloud environment, including migration and security. 2. The award was made under full and open competition, indicating a competitive bidding process. 3. The duration of the contract is approximately 2 years, with a start date in August 2024. 4. The primary service category is Computer Systems Design Services, aligning with IT infrastructure needs. 5. The contract type is a Delivery Order, suggesting it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 6. The contractor, DSSG LLC, will manage security and compliance for the cloud environment.

Value Assessment

Rating: good

The contract value of $7.26 million over approximately two years for enterprise IT services appears reasonable given the scope of cloud management, migration support, and security compliance. Benchmarking against similar large-scale cloud support contracts would provide a more precise value-for-money assessment. However, the focus on operational support and security for an existing environment suggests a need for specialized expertise that justifies the investment.

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 typically means that all responsible sources were permitted to submit a bid. The presence of 12 bids indicates a healthy level of competition for these IT services. A competitive process like this generally leads to better pricing and service offerings for the government.

Taxpayer Impact: The robust competition suggests that taxpayer dollars are likely being used efficiently, as multiple vendors vied to provide the best value, driving down costs and improving service quality.

Public Impact

The Department of Health and Human Services (HHS) will benefit from enhanced operational support and security for its cloud environment. Services include managing existing cloud infrastructure, supporting the migration of web applications, and ensuring data security and compliance. The contract supports the agency's IT infrastructure, crucial for delivering health and human services. The geographic impact is primarily within the agency's operational footprint, likely supporting federal employees and contractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the cloud environment becomes highly specialized to DSSG LLC's management approach.
Reliance on a single delivery order may not fully capture the long-term cost-effectiveness compared to a broader IDIQ.
Scope creep could increase costs if migration efforts expand beyond initial projections.

Positive Signals

Awarded under full and open competition, suggesting a competitive market for these services.
The contract duration provides stability for essential IT operations and security.
Focus on security and compliance is critical for sensitive government data.

Sector Analysis

This contract falls within the Enterprise IT Services (EITS) sector, specifically focusing on cloud computing infrastructure management and cybersecurity. The market for cloud services and IT support for government agencies is substantial and highly competitive. This contract represents a typical investment in maintaining and modernizing critical IT systems to ensure operational efficiency and data integrity within the federal government.

Small Business Impact

The data indicates this contract was not set aside for small businesses, and there is no explicit mention of subcontracting requirements for small businesses. This suggests that the primary award went to a larger entity, and the impact on the small business ecosystem may be limited unless DSSG LLC actively engages small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract will likely be managed by the Office of the Assistant Secretary for Financial Resources within HHS. Standard government contracting oversight mechanisms, including performance reviews, financial audits, and adherence to service level agreements, will be in place. Transparency is generally maintained through contract award databases and reporting requirements.

Related Government Programs

HHS Cloud Computing Services
Federal IT Infrastructure Modernization
Cybersecurity and Compliance Contracts
Enterprise Resource Planning (ERP) Support
IT Operations and Maintenance Contracts

Risk Flags

Potential for scope creep during migration efforts.
Reliance on contractor for critical security and compliance functions.
Performance risks associated with managing complex cloud environments.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $7.3 million to DSSG LLC. ENTERPRISE IT SERVICES (EITS) TO PROVIDE OPERATIONAL SUPPORT TO MANAGE EXISTING CLOUD ENVIRONMENT, SUPPORT MIGRATION EFFORTS OF OTHER WEBSITES AND WEB APPLICATIONS INTO THE ENVIRONMENT, ENSURE THE SECURITY AND COMPLIANCE OF THE ENVIRONMENT, AND SUPPO

Who is the contractor on this award?

The obligated recipient is DSSG LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Office of the Assistant Secretary for Financial Resources).

What is the total obligated amount?

The obligated amount is $7.3 million.

What is the period of performance?

Start: 2024-08-22. End: 2026-10-27.

What is the track record of DSSG LLC in managing large-scale federal cloud environments?

DSSG LLC's track record in managing large-scale federal cloud environments would need to be assessed through their past performance on similar contracts. This includes evaluating their experience with specific cloud platforms (e.g., AWS, Azure, GCP), their success in handling operational support, migration efforts, and maintaining security and compliance standards. A review of their contract history, client feedback, and any documented performance issues or successes would be crucial. Without specific historical data on DSSG LLC's performance in this exact domain, it's difficult to provide a definitive assessment, but the award itself suggests they met the minimum requirements for this specific opportunity.

How does the $7.26 million contract value compare to similar cloud management contracts within HHS or other federal agencies?

To benchmark the $7.26 million contract value, one would compare it against similar Enterprise IT Services (EITS) contracts awarded by HHS or other federal agencies for cloud environment management, migration support, and security. Factors such as contract duration (approximately 2 years), scope of services (operational support, migration, security), and the specific cloud technologies involved are critical for a fair comparison. For instance, contracts for managing complex, multi-cloud environments with significant migration components often range from several million to tens of millions of dollars annually. The value appears within a reasonable range for a two-year engagement of this nature, assuming the scope is well-defined and the services are critical to agency operations.

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

Key risks for this contract include potential technical challenges during migration, security vulnerabilities in the cloud environment, and performance issues with DSSG LLC. Mitigation strategies likely involve clearly defined Service Level Agreements (SLAs), robust security protocols mandated by HHS, regular performance reviews, and contingency plans for migration. The 'full and open competition' aspect also mitigates risk by ensuring a competitive landscape that incentivizes good performance. Furthermore, the contract's duration allows for iterative improvements and adjustments based on performance feedback, reducing the risk of long-term underperformance.

How effective is the 'full and open competition after exclusion of sources' approach in ensuring value for taxpayers?

The 'full and open competition after exclusion of sources' approach is generally considered effective in ensuring value for taxpayers. This method allows all responsible vendors to participate, fostering a competitive environment that drives down prices and encourages innovation. With 12 bids received, the government had a strong pool of options to choose from, increasing the likelihood of securing services at a competitive market rate. This process helps prevent price gouging and ensures that the selected contractor is the most capable and cost-effective provider, thereby maximizing the value of taxpayer funds.

What are the historical spending patterns for similar IT services at HHS?

Historical spending patterns for similar IT services at HHS would reveal trends in IT modernization, cloud adoption, and cybersecurity investments. Analyzing past budgets and contract awards for EITS, cloud infrastructure, and managed IT services would show whether spending has been increasing, decreasing, or remaining stable. This context helps determine if the current $7.26 million award is an anomaly or part of a consistent investment strategy. For example, a trend of increasing cloud migration and security spending would align with this contract's objectives, suggesting a strategic allocation of resources.

What are the implications of this contract being a 'Delivery Order' under a larger IDIQ?

This contract being a 'Delivery Order' implies it is a specific task order issued under a pre-existing Indefinite-Delivery/Indefinite-Quantity (IDIQ) contract. The advantage of this structure is that the foundational contract terms, including pricing structures and vendor qualifications, have already been established through a prior competitive process. This allows for faster procurement of specific services. For taxpayers, it means that the initial competition for the IDIQ likely secured favorable terms. However, the specific value of this delivery order ($7.26M) needs to be assessed within the context of the overall IDIQ ceiling and the services being procured.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - IT MANAGEMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 75P00124R00032

Offers Received: 12

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 8230 RUNNING CREEK CT, SPRINGFIELD, VA, 22153

Business Categories: Asian Pacific American Owned Business, Category Business, Minority Owned Business, Partnership or Limited Liability Partnership, SBA Certified 8 a Joint Venture, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $23,306,949

Exercised Options: $7,262,530

Current Obligation: $7,262,530

Actual Outlays: $4,967,218

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47QTCB22D0430

IDV Type: GWAC

Timeline