HHS awarded $42.1M for CDN services, with Akamai products procured via full and open competition

Contract Overview

Contract Amount: $42,161,288 ($42.2M)

Contractor: N2grate Government Technology Solutions, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2015-06-03

End Date: 2020-06-02

Contract Duration: 1,826 days

Daily Burn Rate: $23.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF PROCURE AKAMAI PRODUCTS FOR THE CDN

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $42.2 million to N2GRATE GOVERNMENT TECHNOLOGY SOLUTIONS, LLC for work described as: IGF::OT::IGF PROCURE AKAMAI PRODUCTS FOR THE CDN Key points: 1. Value for money appears reasonable given the duration and scope of Content Delivery Network (CDN) services. 2. The contract utilized full and open competition, suggesting a competitive pricing environment. 3. No specific risk indicators are immediately apparent from the provided data. 4. Performance context is limited to the provision of CDN services. 5. This contract falls within the IT services sector, specifically related to communications equipment. 6. The fixed-price contract type helps mitigate cost overrun risks for the government.

Value Assessment

Rating: good

The contract value of $42.1 million over five years for CDN services is within a reasonable range for government procurements of this nature. Benchmarking against similar large-scale CDN contracts would provide a more precise value-for-money assessment. The firm fixed-price structure suggests that the initial pricing was deemed acceptable and aimed to control costs.

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 process is designed to foster price discovery and ensure the government receives competitive pricing. The presence of a single award does not diminish the competitive nature of the initial solicitation.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces, ensuring that government funds are used efficiently.

Public Impact

Beneficiaries include federal agencies relying on robust internet infrastructure for data delivery. Services delivered are critical for the functioning of the Centers for Medicare and Medicaid Services (CMS) online platforms. Geographic impact is nationwide, supporting federal operations across the United States. Workforce implications are indirect, supporting IT professionals managing and utilizing these services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
Firm fixed-price contract type helps manage budget predictability.
Long-term contract (5 years) provides stability for service delivery.
Procurement of established products (Akamai) suggests reliance on proven technology.

Sector Analysis

This contract is situated within the Information Technology sector, specifically focusing on Content Delivery Network (CDN) services. The market for CDN services is highly competitive, with major players offering global infrastructure. Government spending in this area supports critical digital services and data transmission needs, ensuring reliable access to online resources for citizens and employees. Comparable spending benchmarks would involve analyzing other large federal contracts for similar IT infrastructure and network services.

Small Business Impact

The provided data does not indicate any specific small business set-asides or subcontracting requirements for this contract. As a large contract likely involving significant infrastructure and service delivery, it's possible that larger prime contractors would be involved, with potential for subcontracting opportunities. However, without explicit information, the direct impact on the small business ecosystem is unclear.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services' contracting and program management offices. The Centers for Medicare and Medicaid Services (CMS) would be responsible for monitoring performance and ensuring compliance with contract terms. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Federal Cloud Computing Strategy
IT Infrastructure Modernization Programs
Cybersecurity Enhancement Initiatives
Digital Government Services

Risk Flags

Potential vendor lock-in due to reliance on a single product provider (Akamai).

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $42.2 million to N2GRATE GOVERNMENT TECHNOLOGY SOLUTIONS, LLC. IGF::OT::IGF PROCURE AKAMAI PRODUCTS FOR THE CDN

Who is the contractor on this award?

The obligated recipient is N2GRATE GOVERNMENT TECHNOLOGY 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 $42.2 million.

What is the period of performance?

Start: 2015-06-03. End: 2020-06-02.

What is the historical spending trend for CDN services by the Department of Health and Human Services?

Analyzing historical spending on CDN services by HHS requires access to detailed procurement data over multiple fiscal years. While this specific contract represents a significant award of $42.1 million over five years, understanding the broader trend involves examining all CDN-related procurements by HHS agencies. Factors such as the growth of digital services, increased data demands, and the adoption of cloud technologies would influence spending patterns. Without a comprehensive dataset of all HHS CDN contracts, it is difficult to establish a precise historical trend. However, it is reasonable to infer that spending has likely increased over time, mirroring the general trend of digital transformation within government and the growing reliance on robust internet infrastructure for critical services like those provided by CMS.

How does the per-unit cost of Akamai CDN services under this contract compare to market rates for similar services?

Determining the precise per-unit cost for Akamai CDN services under this contract is challenging without detailed breakdowns of service usage and pricing tiers. The contract value of $42.1 million is an aggregate over five years. To compare with market rates, one would need to identify specific metrics like cost per gigabyte transferred, cost per request, or cost per edge location, and then benchmark these against publicly available pricing from Akamai or other CDN providers for comparable enterprise-level services. Given that this is a government contract awarded through full and open competition, it suggests that the pricing was considered competitive at the time of award. However, the dynamic nature of the CDN market means that current market rates might differ significantly from those established in 2015 when this contract began.

What are the key performance indicators (KPIs) used to measure the success of this CDN contract?

The specific Key Performance Indicators (KPIs) for this contract are not detailed in the provided summary data. However, for CDN services, typical KPIs would include metrics related to performance, availability, and reliability. These often encompass latency (the time it takes for data to travel from the server to the user), uptime (the percentage of time the service is operational), packet loss (the percentage of data packets that fail to reach their destination), and throughput (the amount of data transferred over a period). For a contract supporting the Centers for Medicare and Medicaid Services, ensuring high availability and low latency for critical online portals and data access would be paramount. Performance would likely be monitored through regular reporting by the contractor and potentially independent testing.

What is the track record of N2GRATE GOVERNMENT TECHNOLOGY SOLUTIONS, LLC in delivering similar IT infrastructure services?

Information regarding the specific track record of N2GRATE GOVERNMENT TECHNOLOGY SOLUTIONS, LLC in delivering similar IT infrastructure services, particularly CDN solutions, is not provided in the summary data. To assess their track record, one would need to review their past performance on government contracts, including client feedback, contract completion history, and any documented performance issues or successes. As the prime contractor for this significant award, their ability to manage and deliver these services effectively is crucial. Further investigation into their contract history, potentially through resources like the Federal Procurement Data System (FPDS), would be necessary to gain a comprehensive understanding of their capabilities and past performance.

What are the potential risks associated with relying on a single vendor (Akamai) for CDN products, even if procured competitively?

While the contract was competitively awarded, relying on a single vendor like Akamai for CDN products introduces several potential risks. Vendor lock-in is a primary concern, making it difficult and costly to switch providers in the future, even if better alternatives emerge. Dependence on a single vendor can also limit negotiation leverage for future renewals or expansions. Furthermore, any disruptions to Akamai's services, whether due to technical issues, security breaches, or business challenges, could directly impact the critical operations of the Centers for Medicare and Medicaid Services. While competition at the time of award mitigates initial pricing risks, long-term reliance necessitates ongoing monitoring of vendor performance, security posture, and market competitiveness.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: FCISJB980001B

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 9111 EDMONSTON RD STE 303, GREENBELT, MD, 20770

Business Categories: Category Business, Limited Liability Corporation, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $42,161,288

Exercised Options: $42,161,288

Current Obligation: $42,161,288

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F016BA

IDV Type: FSS

Timeline