HHS Awards $175M for IT Services to Qlarant Integrity Solutions Over 15 Years

Contract Overview

Contract Amount: $174,976,849 ($175.0M)

Contractor: Qlarant Integrity Solutions LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2005-09-29

End Date: 2020-09-28

Contract Duration: 5,478 days

Daily Burn Rate: $31.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: MEDIC - EEM

Place of Performance

Location: EASTON, TALBOT County, MARYLAND, 21601

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $175.0 million to QLARANT INTEGRITY SOLUTIONS LLC for work described as: MEDIC - EEM Key points: 1. Significant contract value of $175M highlights long-term IT support needs. 2. Full and open competition suggests a competitive bidding process. 3. Contract duration of 15 years indicates a need for sustained services. 4. The sector is IT services, specifically computing infrastructure and data processing.

Value Assessment

Rating: fair

The contract's total award value is substantial, spanning 15 years. Without specific per-unit cost data or benchmarks for similar long-term IT infrastructure contracts, a precise value assessment is difficult. The Cost Plus Fixed Fee (CPFF) pricing structure can sometimes lead to higher costs if not managed tightly.

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 method generally promotes competitive pricing and allows the government to select the best value offering. The final price is a result of this competitive process.

Taxpayer Impact: The competitive award process aims to ensure taxpayer funds are used efficiently by securing services at a reasonable price, though the long duration and CPFF structure warrant ongoing monitoring.

Public Impact

Ensures continuity of critical IT infrastructure and data processing for Medicare and Medicaid. Supports the operational backbone of healthcare services for millions of Americans. Long-term commitment provides stability for service provider and government planning. Potential for innovation and service improvement over the contract's extensive lifespan.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (15 years) may limit flexibility to adopt newer technologies.
CPFF contract type can incentivize cost overruns if not closely monitored.
Lack of specific performance metrics in provided data makes effectiveness assessment difficult.

Positive Signals

Awarded via full and open competition, suggesting a competitive price.
Long-term award provides stability for essential IT services.
Significant investment indicates commitment to critical healthcare IT infrastructure.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computing infrastructure, data processing, and web hosting. Spending in this area is crucial for government operations, particularly for agencies like CMS managing vast amounts of sensitive data and requiring robust online services. Benchmarks for similar long-term, large-scale IT service contracts are highly variable based on scope and technology.

Small Business Impact

The provided data does not indicate whether small businesses were involved as subcontractors or prime contractors. Further analysis would be needed to determine the extent of small business participation in this significant IT services contract.

Oversight & Accountability

The long duration of the contract necessitates robust oversight mechanisms to ensure performance, cost control, and adherence to contract terms. Regular performance reviews and audits by CMS would be critical for accountability and taxpayer value.

Related Government Programs

Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
Department of Health and Human Services Contracting
Centers for Medicare and Medicaid Services Programs

Risk Flags

Long contract duration (15 years)
Cost Plus Fixed Fee (CPFF) pricing structure
Potential for technological obsolescence
Lack of detailed performance data in award notice

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $175.0 million to QLARANT INTEGRITY SOLUTIONS LLC. MEDIC - EEM

Who is the contractor on this award?

The obligated recipient is QLARANT INTEGRITY SOLUTIONS LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Medicare and Medicaid Services).

What is the total obligated amount?

The obligated amount is $175.0 million.

What is the period of performance?

Start: 2005-09-29. End: 2020-09-28.

What is the average annual cost per year of this contract, and how does it compare to industry benchmarks for similar IT infrastructure services?

The contract's total award is $174,976,848.58 over approximately 15 years (5478 days). This averages to roughly $11.67 million per year. Comparing this to industry benchmarks is challenging without detailed service level agreements and specific technology stacks. However, for large-scale, long-term IT infrastructure and data processing contracts, this annual figure could be within a reasonable range, provided the scope of services is comprehensive and critical.

What are the primary risks associated with a 15-year IT services contract, particularly concerning technological obsolescence and vendor lock-in?

The primary risks include technological obsolescence, where the contracted services or infrastructure may become outdated before the contract ends, leading to inefficiencies. Vendor lock-in is another significant risk, making it difficult and costly to switch providers if performance declines or better alternatives emerge. The CPFF structure also poses a risk of cost escalation if not managed diligently, potentially impacting overall value.

How effectively has Qlarant Integrity Solutions managed this contract to ensure the continuous and secure operation of critical Medicare and Medicaid IT systems?

The provided data does not contain specific performance metrics or historical data on service disruptions, security incidents, or cost performance against projections. Therefore, an assessment of Qlarant's effectiveness in managing the contract for the continuous and secure operation of critical systems cannot be made solely from this information. Further review of performance reports and audit findings would be necessary.

Industry Classification

NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 9240 CENTERVILLE RD, EASTON, MD, 21601

Business Categories: Category Business, Corporate Entity Tax Exempt, Limited Liability Corporation, Nonprofit Organization, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $174,976,849

Exercised Options: $174,976,849

Current Obligation: $174,976,849

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSM500200500010I

IDV Type: IDC

Timeline