HHS Awards $17M Contract for Payroll System IT Services to Lyceum Business Services

Contract Overview

Contract Amount: $17,079,255 ($17.1M)

Contractor: Lyceum Business Services, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2025-01-01

End Date: 2026-12-31

Contract Duration: 729 days

Daily Burn Rate: $23.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THE PRIMARY OBJECTIVE IS TO TRANSITION TO A NEW SERVICE PROVIDER WHO WILL MAINTAIN THE CURRENT IT TECHNICAL SERVICES AND TO INCLUDE THE PROFESSIONAL SERVICES FOR OPERATIONS AND MAINTENANCE OF AN EXISTING PAYROLL AND PERSONNEL SYSTEM DATA, OUTPUT, AND

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20857

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $17.1 million to LYCEUM BUSINESS SERVICES, LLC for work described as: THE PRIMARY OBJECTIVE IS TO TRANSITION TO A NEW SERVICE PROVIDER WHO WILL MAINTAIN THE CURRENT IT TECHNICAL SERVICES AND TO INCLUDE THE PROFESSIONAL SERVICES FOR OPERATIONS AND MAINTENANCE OF AN EXISTING PAYROLL AND PERSONNEL SYSTEM DATA, OUTPUT, AND Key points: 1. Contract focuses on maintaining existing IT technical services and professional services for a payroll and personnel system. 2. Lyceum Business Services, LLC is the awardee for this definitive contract. 3. The contract has a duration of 729 days, ending December 31, 2026. 4. The award was made under full and open competition after exclusion of sources.

Value Assessment

Rating: good

The contract value of $17.08 million for a 2-year period appears reasonable for IT technical and professional services related to payroll and personnel systems. Benchmarking against similar contracts for system maintenance and support would provide a more precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition after exclusion of sources, indicating a competitive bidding process. This method generally promotes price discovery and ensures fair market value.

Taxpayer Impact: The competitive nature of the award suggests that taxpayers are likely receiving a fair price for the services rendered.

Public Impact

Ensures continuity of critical payroll and personnel system operations for HHS employees. Supports the maintenance and output of essential data for workforce management. Provides professional services for operations and maintenance, enhancing system reliability.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if transition is not managed effectively.
Reliance on a single provider for critical payroll functions.

Positive Signals

Clear objective for service provider transition.
Competitive award process ensures market-based pricing.
Defined contract period with specific end dates.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on payroll and personnel system maintenance. Spending benchmarks for similar government IT support contracts vary widely based on scope and complexity, but $17M over two years for comprehensive services is within a typical range.

Small Business Impact

The provided data does not indicate whether small businesses were involved as subcontractors or if the prime contractor is a small business. Further analysis would be needed to assess small business participation.

Oversight & Accountability

The contract was awarded through full and open competition, suggesting a degree of oversight in the procurement process. Monitoring performance and adherence to contract terms will be crucial for accountability.

Related Government Programs

Payroll Services
Department of Health and Human Services Contracting
Office of the Assistant Secretary for Administration Programs

Risk Flags

Potential for service disruption during transition.
Dependence on a single vendor for critical system operations.
Risk of cost overruns if scope creep occurs.
Ensuring data security and privacy throughout the contract term.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $17.1 million to LYCEUM BUSINESS SERVICES, LLC. THE PRIMARY OBJECTIVE IS TO TRANSITION TO A NEW SERVICE PROVIDER WHO WILL MAINTAIN THE CURRENT IT TECHNICAL SERVICES AND TO INCLUDE THE PROFESSIONAL SERVICES FOR OPERATIONS AND MAINTENANCE OF AN EXISTING PAYROLL AND PERSONNEL SYSTEM DATA, OUTPUT, AND

Who is the contractor on this award?

The obligated recipient is LYCEUM BUSINESS SERVICES, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $17.1 million.

What is the period of performance?

Start: 2025-01-01. End: 2026-12-31.

What specific metrics will be used to evaluate the performance of Lyceum Business Services in maintaining the payroll and personnel system?

Performance evaluation will likely involve key performance indicators (KPIs) related to system uptime, data accuracy, response times for technical support, and successful processing of payroll and personnel data. The contract should detail these metrics and the acceptable performance thresholds to ensure the service provider meets the required standards for operational continuity and data integrity.

What is the contingency plan if Lyceum Business Services fails to meet its contractual obligations, particularly concerning the critical payroll functions?

Contingency plans typically involve clauses for contract termination and the initiation of a new procurement process or transfer to an incumbent provider if available. The contract should outline remedies for non-performance, including potential penalties and the government's right to seek alternative solutions to ensure uninterrupted payroll processing and data security.

How will the transition to the new service provider be managed to minimize disruption to HHS's payroll and personnel operations?

A successful transition will require a detailed transition plan developed by Lyceum Business Services and approved by HHS. This plan should include phased knowledge transfer, parallel system runs if feasible, and clear communication protocols. Robust project management and oversight from HHS will be essential to ensure a seamless handover of responsibilities and data.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Payroll Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 75P00124R00051

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1201 SEVEN LOCKS RD STE 360-22, POTOMAC, MD, 20854

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $40,001,655

Exercised Options: $17,814,255

Current Obligation: $17,079,255

Actual Outlays: $11,211,253

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline