HHS Awards $923M for Infrastructure Hosting and Connectivity Services to Leidos, Inc
Contract Overview
Contract Amount: $923,427,354 ($923.4M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Health and Human Services
Start Date: 2014-06-16
End Date: 2023-12-31
Contract Duration: 3,485 days
Daily Burn Rate: $265.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: VDC: INFRASTRUCTURE HOSTING AND CENTRALIZED CONNECTIVITY SERVICES (IHCCS) IGF::OT::IGF
Place of Performance
Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244
State: Maryland Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $923.4 million to LEIDOS, INC. for work described as: VDC: INFRASTRUCTURE HOSTING AND CENTRALIZED CONNECTIVITY SERVICES (IHCCS) IGF::OT::IGF Key points: 1. Significant contract value of $923M over 9+ years. 2. Leidos, Inc. is a major government contractor, indicating established capabilities. 3. The contract covers essential IT infrastructure, a critical area for government operations. 4. The sector is IT services, specifically cloud and data hosting.
Value Assessment
Rating: good
The contract value of $923M over nearly 10 years suggests a substantial investment in IT infrastructure. Benchmarking against similar large-scale hosting and connectivity contracts would be necessary for a precise value assessment, but the duration and scope imply a significant, ongoing need.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is a positive sign for price discovery and achieving a fair market price. This method allows multiple vendors to bid, fostering competition and potentially leading to better value for the government.
Taxpayer Impact: Full and open competition generally leads to more competitive pricing, potentially saving taxpayer money compared to sole-source or limited competition awards.
Public Impact
Ensures continuity of critical health services by maintaining essential IT infrastructure. Supports the operational needs of the Centers for Medicare and Medicaid Services (CMS). Impacts government's ability to process and manage sensitive health data securely. Provides a stable platform for future technology upgrades and service delivery.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (9+ years) may limit flexibility for adopting newer technologies.
- Reliance on a single vendor for critical infrastructure could pose a risk if performance issues arise.
Positive Signals
- Awarded through full and open competition, suggesting competitive pricing.
- Leidos is an experienced contractor with a strong track record.
- Contract supports essential government functions for CMS.
Sector Analysis
This contract falls within the IT services sector, specifically focusing on computing infrastructure, data processing, and web hosting. Government spending in this area is substantial and growing as agencies modernize and rely more on cloud-based solutions.
Small Business Impact
The data does not indicate specific set-asides for small businesses. While Leidos, Inc. is a large prime contractor, it's possible they utilize small business subcontractors, but this information is not provided.
Oversight & Accountability
The contract was awarded through full and open competition, indicating a structured procurement process. Oversight would typically involve regular performance reviews and contract management by CMS to ensure service delivery and adherence to terms.
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-term commitment may hinder adoption of rapidly evolving technologies.
- Potential for vendor lock-in with a single provider for critical infrastructure.
- Contract value is substantial, requiring diligent oversight to ensure value for money.
- Dependence on a single contractor for essential services poses a risk to operational continuity if issues arise.
Tags
computing-infrastructure-providers-data-, department-of-health-and-human-services, md, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $923.4 million to LEIDOS, INC.. VDC: INFRASTRUCTURE HOSTING AND CENTRALIZED CONNECTIVITY SERVICES (IHCCS) IGF::OT::IGF
Who is the contractor on this award?
The obligated recipient is LEIDOS, 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 $923.4 million.
What is the period of performance?
Start: 2014-06-16. End: 2023-12-31.
What is the specific breakdown of services provided under this contract and how do they align with current technological needs?
The contract covers "INFRASTRUCTURE HOSTING AND CENTRALIZED CONNECTIVITY SERVICES (IHCCS)" and falls under the NAICS code for Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services. This suggests a broad scope encompassing the foundational IT elements necessary for CMS operations, including data storage, network connectivity, and potentially cloud services. A detailed service level agreement (SLA) would further clarify specific deliverables and performance metrics.
How does the per-unit cost of these hosting and connectivity services compare to industry benchmarks, considering the scale and duration?
Without specific per-unit cost data (e.g., cost per gigabyte of storage, cost per user for connectivity), a direct benchmark is difficult. However, the total contract value of $923M over nearly 10 years for comprehensive infrastructure services suggests a significant investment. Government contracts often include overhead and management fees that can differ from commercial rates. A detailed cost analysis comparing specific service components to market rates would be needed for a definitive assessment.
What are the key performance indicators (KPIs) and service level agreements (SLAs) in place to ensure the effectiveness and reliability of these critical IT services?
The provided data does not detail the specific KPIs or SLAs. However, for a contract of this magnitude and criticality supporting CMS, robust performance metrics are expected. These would likely include uptime guarantees, data security compliance, response times for incidents, and successful data processing rates. Effective oversight by CMS would involve regular monitoring of these metrics to ensure the contractor, Leidos, Inc., meets all contractual obligations and maintains the integrity of the IT infrastructure.
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: 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: RFPCMS20120007
Offers Received: 4
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 700 N FREDERICK AVE, GAITHERSBURG, MD, 20879
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $923,427,354
Exercised Options: $923,427,354
Current Obligation: $923,427,354
Actual Outlays: $216,313,152
Subaward Activity
Number of Subawards: 655
Total Subaward Amount: $186,236,526
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HHSM500201300016I
IDV Type: IDC
Timeline
Start Date: 2014-06-16
Current End Date: 2023-12-31
Potential End Date: 2023-12-31 00:00:00
Last Modified: 2025-12-16
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