HHS Awards $505M Desktop Support Contract to National Government Services
Contract Overview
Contract Amount: $505,264,738 ($505.3M)
Contractor: National Government Services, Inc.
Awarding Agency: Department of Health and Human Services
Start Date: 2017-02-01
End Date: 2027-03-31
Contract Duration: 3,710 days
Daily Burn Rate: $136.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: IT
Official Description: NEXT GENERATION DESKTOP IGF::OT::IGF
Place of Performance
Location: INDIANAPOLIS, MARION County, INDIANA, 46250
State: Indiana Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $505.3 million to NATIONAL GOVERNMENT SERVICES, INC. for work described as: NEXT GENERATION DESKTOP IGF::OT::IGF Key points: 1. Significant contract value of $505M over 10 years. 2. Competition method is 'Full and Open', suggesting broad market engagement. 3. Risk is moderate due to long contract duration and cost-plus award fee structure. 4. Sector is IT services, specifically computer systems design.
Value Assessment
Rating: fair
The contract type is Cost Plus Award Fee, which can lead to higher costs if not managed tightly. Benchmarking against similar large-scale IT support contracts is difficult without more granular cost data.
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 innovation.
Taxpayer Impact: The use of full and open competition is positive for taxpayers, as it aims to secure the best value through market forces.
Public Impact
Impacts federal employees relying on desktop support services. Ensures continuity of critical IT infrastructure for CMS operations. Potential for improved IT service delivery and user experience.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee structure requires careful monitoring.
- Long contract duration (10 years) may limit flexibility.
- No small business participation noted.
Positive Signals
- Full and open competition utilized.
- Definitive contract provides a clear framework.
- Award fee structure incentivizes performance.
Sector Analysis
This contract falls within the IT services sector, specifically computer systems design. Spending in this area is substantial across federal agencies, supporting essential digital infrastructure and operations.
Small Business Impact
The data indicates no small business participation in this contract. This is a missed opportunity to support small businesses and could potentially limit the range of innovative solutions.
Oversight & Accountability
Oversight will be crucial to manage the Cost Plus Award Fee structure effectively and ensure performance targets are met within budget. The long duration necessitates ongoing review.
Related Government Programs
- Computer Systems Design Services
- Department of Health and Human Services Contracting
- Centers for Medicare and Medicaid Services Programs
Risk Flags
- Cost Plus Award Fee (CPAF) structure.
- Long contract duration (10 years).
- No small business participation.
- Potential for scope creep.
Tags
computer-systems-design-services, department-of-health-and-human-services, in, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $505.3 million to NATIONAL GOVERNMENT SERVICES, INC.. NEXT GENERATION DESKTOP IGF::OT::IGF
Who is the contractor on this award?
The obligated recipient is NATIONAL GOVERNMENT SERVICES, INC..
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 $505.3 million.
What is the period of performance?
Start: 2017-02-01. End: 2027-03-31.
What are the key performance indicators (KPIs) tied to the award fee, and how are they measured to ensure value for money?
The effectiveness of the award fee hinges on clearly defined, measurable KPIs aligned with critical service delivery objectives. Robust oversight mechanisms are needed to validate performance data and ensure that award fees genuinely reflect superior service and cost-efficiency, thereby maximizing taxpayer value and mitigating risks associated with cost-plus contracts.
How does the agency plan to mitigate risks associated with a 10-year contract duration, such as technological obsolescence or changing mission needs?
Mitigation strategies for a long-duration contract typically involve incorporating flexibility clauses, regular review periods, and performance-based incentives. The agency should establish clear processes for technology refresh, scope adjustments based on evolving mission requirements, and potentially break clauses to allow for re-competition or contract modification if circumstances change significantly.
What is the projected cost per user or per device, and how does it compare to industry benchmarks for similar government IT support services?
Without specific unit cost breakdowns, a precise per-user or per-device cost benchmark is not feasible. However, the total contract value of $505M over approximately 10 years suggests a significant investment. Agencies should conduct thorough market research and benchmarking against comparable federal and commercial contracts to ensure this expenditure represents good value and competitive pricing.
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 › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: HHSM5002016RFP0004
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Elevance Health, Inc.
Address: 8115 KNUE RD, INDIANAPOLIS, IN, 46250
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $505,264,738
Exercised Options: $505,264,738
Current Obligation: $505,264,738
Actual Outlays: $263,766,703
Subaward Activity
Number of Subawards: 307
Total Subaward Amount: $171,050,755
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2017-02-01
Current End Date: 2027-03-31
Potential End Date: 2027-03-31 00:00:00
Last Modified: 2026-03-23
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