HHS awards $22M for IT services, with a 5-year duration and firm fixed price contract

Contract Overview

Contract Amount: $22,026,302 ($22.0M)

Contractor: Heitech Services, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2009-02-20

End Date: 2014-08-31

Contract Duration: 2,018 days

Daily Burn Rate: $10.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: CENTER ITEM NUMBER CDRH OSB 09-024 MDR CONTRACT FOR BASE YEAR MARCH 1 2009- AUGUST 31 2009

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $22.0 million to HEITECH SERVICES, LLC for work described as: CENTER ITEM NUMBER CDRH OSB 09-024 MDR CONTRACT FOR BASE YEAR MARCH 1 2009- AUGUST 31 2009 Key points: 1. Contract awarded for IT services, indicating a need for ongoing technical support and infrastructure management. 2. The firm-fixed-price structure suggests predictable costs for the government, shifting cost overrun risk to the contractor. 3. A 5-year duration points to a long-term strategic need for these services by the FDA. 4. The contract was awarded under full and open competition, implying a robust bidding process. 5. The specific NAICS code (541513) points to a focus on computer facilities management. 6. The award amount of over $22 million over five years suggests a significant investment in IT infrastructure.

Value Assessment

Rating: good

The contract value of approximately $22 million over five years averages to about $4.4 million annually. Without specific benchmarks for similar FDA IT facilities management contracts, a direct value-for-money assessment is challenging. However, the firm-fixed-price nature of the contract provides cost certainty. The duration suggests a stable, long-term need, which can sometimes lead to better pricing through economies of scale for the contractor.

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.' This indicates that the solicitation was broadly advertised, and multiple responsible sources were permitted to submit bids. The fact that it was competed suggests that the FDA sought to leverage market competition to obtain the best value. The number of bidders (5) is a healthy sign of competition.

Taxpayer Impact: A full and open competition generally benefits taxpayers by driving down prices through competitive bidding and ensuring that the government receives services at a fair market rate.

Public Impact

The Food and Drug Administration (FDA) benefits from reliable IT facilities management, crucial for its operations. Services delivered likely include maintenance, support, and management of computer systems and infrastructure. The geographic impact is primarily within the FDA's operational areas, likely concentrated in Maryland where the contractor is based. Workforce implications include the potential for skilled IT professionals employed by HEITECH SERVICES, LLC to support the FDA's mission.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in given the 5-year duration and specialized IT services.
Reliance on a single contractor for critical IT infrastructure could pose a risk if performance falters.
The firm-fixed-price contract, while offering cost certainty, might limit flexibility if requirements change significantly.

Positive Signals

Awarded through full and open competition, indicating a competitive process that likely secured fair pricing.
The firm-fixed-price contract shifts cost overrun risk to the contractor, providing budget predictability.
A 5-year contract term suggests a stable, long-term relationship, potentially leading to efficiencies and expertise development.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on Computer Facilities Management Services. This market segment involves the operation, maintenance, and support of an organization's IT infrastructure, including servers, networks, and data centers. The IT services market is highly competitive, with numerous providers ranging from large corporations to specialized small businesses. Spending in this area is critical for government agencies to maintain secure and efficient operations.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false). HEITECH SERVICES, LLC is likely a large business, given the contract value. There is no explicit information on subcontracting plans for small businesses within this data snippet. Further analysis would be needed to determine if small business participation is mandated or encouraged through subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the FDA's program officials. The firm-fixed-price nature of the contract implies that performance standards and deliverables are clearly defined. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Infrastructure Management
Computer Systems Support
Data Center Operations
Federal IT Services Contracts
Health IT Services

Risk Flags

Long-term contract duration may limit flexibility for evolving IT needs.
Firm-fixed-price structure shifts cost overrun risk to contractor, potentially impacting service quality if not managed well.
Reliance on a single vendor for critical IT infrastructure requires robust performance monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $22.0 million to HEITECH SERVICES, LLC. CENTER ITEM NUMBER CDRH OSB 09-024 MDR CONTRACT FOR BASE YEAR MARCH 1 2009- AUGUST 31 2009

Who is the contractor on this award?

The obligated recipient is HEITECH SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Food and Drug Administration).

What is the total obligated amount?

The obligated amount is $22.0 million.

What is the period of performance?

Start: 2009-02-20. End: 2014-08-31.

What is the historical spending pattern for Computer Facilities Management Services at the FDA?

Analyzing historical spending for Computer Facilities Management Services (NAICS 541513) at the FDA requires access to comprehensive federal procurement data. Typically, agencies like the FDA have consistent needs for IT infrastructure support. Spending patterns can fluctuate based on technology upgrades, system modernization projects, and overall budget allocations. A review of past contracts would reveal trends in contract values, durations, and types of services procured. For instance, if the FDA has recently undergone a major IT overhaul, spending might have been higher in preceding years for implementation, followed by a period of sustained maintenance and support as seen in this contract. Conversely, budget constraints or shifts in IT strategy could lead to reduced spending. Understanding these patterns provides context for the current award's scale and duration.

How does the annual cost of this contract compare to industry benchmarks for similar IT facilities management services?

To benchmark the annual cost of this contract, which is approximately $4.4 million ($22M / 5 years), against industry standards, one would need access to detailed market research reports and pricing data for comparable IT facilities management services. Factors influencing benchmarks include the scope of services (e.g., number of users supported, servers managed, data center size), geographic location, service level agreements (SLAs), and the specific technologies involved. Given that this is a federal contract, it may include specific security and compliance requirements that differ from commercial contracts. A preliminary assessment suggests that $4.4 million annually for comprehensive IT facilities management for a federal agency is within a plausible range, but a definitive comparison requires detailed market analysis and understanding of the precise service deliverables.

What is the track record of HEITECH SERVICES, LLC in performing federal IT services contracts?

Assessing the track record of HEITECH SERVICES, LLC requires examining their past performance on federal contracts, particularly those involving IT facilities management. Publicly available data, such as contract award histories and performance evaluations (if accessible), can provide insights. Key indicators include the successful completion of previous contracts, adherence to schedules and budgets, and any history of disputes or contract terminations. A company's experience with similar agencies or contract types (e.g., firm-fixed-price, long-term) is also relevant. Without specific performance review data for HEITECH SERVICES, LLC, it's difficult to provide a definitive assessment. However, their ability to win a 5-year, $22 million contract through full and open competition suggests a level of capability and competitiveness recognized by the FDA.

What are the potential risks associated with a 5-year firm-fixed-price contract for IT facilities management?

A 5-year firm-fixed-price (FFP) contract for IT facilities management presents several potential risks. For the government, the primary risk is inflexibility; if IT needs evolve rapidly or new technologies emerge, the FFP structure might make it costly or difficult to adapt the contract scope. The contractor bears the risk of cost overruns, which could incentivize them to cut corners on service quality or personnel if their cost projections are inaccurate. For both parties, a long-term FFP contract can lead to a lack of incentive for innovation or efficiency improvements beyond what is contractually required. Additionally, if the contractor's performance is subpar, the government is locked into the contract for its duration, potentially impacting critical IT operations, although remedies for non-performance exist.

How does the competition level (5 bidders) impact the value received by the government for this contract?

Having five bidders for this IT facilities management contract is generally a positive indicator for the government. A higher number of bidders typically signifies a more competitive marketplace, which tends to drive down prices and encourage contractors to offer better value to secure the award. It suggests that the contract requirements were clear and accessible enough to attract multiple capable firms. This level of competition increases the likelihood that the FDA received a fair market price and that the chosen contractor, HEITECH SERVICES, LLC, offered a compelling combination of technical capability and cost-effectiveness. Conversely, very low competition (e.g., 1-2 bidders) might raise concerns about market concentration or potentially inflated pricing.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SEALED BID

Solicitation ID: FDASOL0800653

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8400 CORPORATE DRIVE, STE 500, LANDOVER, MD, 20785

Business Categories: 8(a) Program Participant, Category Business, Service Disabled Veteran Owned Business, Small Business, Small Disadvantaged Business, Special Designations, Subchapter S Corporation, Veteran Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $22,026,302

Exercised Options: $22,026,302

Current Obligation: $22,026,302

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSF223200830014I

IDV Type: IDC

Timeline