HHS Awards $76.6M IT Services Contract to Leidos, Inc. for System Modernization

Contract Overview

Contract Amount: $76,599,884 ($76.6M)

Contractor: Leidos, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2018-01-31

End Date: 2026-12-31

Sector: IT

Official Description: NEXT GENERATION IT SERVICES (NGITS) ENGINEERING TASK ORDER SERVICES

Plain-Language Summary

This contract, valued at approximately $76.6 million, is for Next Generation IT Services (NGITS) Engineering Task Order Services awarded to Leidos, Inc. by the Department of Health and Human Services (HHS), specifically its Office of the Assistant Secretary for Administration. The government requires these services to modernize and maintain its complex information technology infrastructure, ensuring the efficient operation of critical administrative functions and support systems. Leidos, Inc. is a major government contractor with extensive experience in IT services, systems integration, and engineering, making them a qualified provider for such a large-scale IT undertaking. The contract amount, spread over a period from 2018 to 2026, averages roughly $9.5 million per year. While specific industry benchmarks for 'next-generation IT services' are difficult to pinpoint without more detail on the exact services rendered, this annual figure appears within a reasonable range for a large federal agency's IT modernization and support needs, especially considering the scope and duration. The award type is a BPA Call, which means it's an order placed against a previously established Blanket Purchase Agreement (BPA). The competition type is not specified, which is a significant gap in transparency. If the BPA itself was competitively awarded, this call might leverage that competition. However, without knowing the competition for the BPA or this specific call, it's hard to definitively assess if taxpayers received the best possible value. This contract likely supports HHS's broader efforts to update its IT systems, improve data security, and enhance the delivery of health and human services through technological advancements. It is part of the ongoing federal push to modernize legacy systems and adopt more agile, cloud-based, and secure IT solutions across agencies.

Value Assessment

Rating: good

The total contract value of $76.6 million over approximately nine years (2018-2026) translates to an average annual spend of about $9.5 million. This figure seems reasonable for a large federal agency like HHS requiring comprehensive IT engineering and modernization services. Without detailed task orders, precise benchmarking is challenging, but this annual investment aligns with the scale of IT operations and modernization efforts typical for major government departments.

Cost Per Unit: Estimated annual cost is approximately $9.5 million. Industry benchmarks for large-scale federal IT modernization and engineering services vary widely based on scope, but this annual figure is within a plausible range for supporting a major agency's IT infrastructure.

Competition Analysis

Competition Level: unknown

The competition type is not specified for this BPA Call. While the underlying BPA might have been competitively awarded, the lack of clarity on the competition for this specific task order is a concern. This opacity makes it difficult to determine if multiple vendors were considered or if it was awarded under a limited or sole-source basis.

Taxpayer Impact: When competition is unknown or limited, there is a higher risk that taxpayers may not be receiving the most cost-effective solutions, as the pressure to offer competitive pricing and innovative approaches is reduced.

Public Impact

This contract directly impacts citizens by ensuring the Department of Health and Human Services (HHS) can maintain and modernize the IT systems that underpin its vast operations. These systems are crucial for managing public health programs, processing benefits, storing sensitive health data securely, and facilitating research. For example, efficient IT infrastructure is vital for the timely distribution of public health information, the administration of programs like Medicare and Medicaid, and the coordination of responses during health crises. By investing in 'next-generation' IT, HHS aims to improve the reliability, security, and accessibility of these services. This means citizens can expect more robust online portals for accessing health information and services, better protection of their personal health records, and more efficient government operations that translate into better service delivery. Ultimately, this contract contributes to a more modern, secure, and responsive government that can better serve the public's health and welfare needs through advanced technology.

Waste & Efficiency Indicators

Waste Risk Score: 35 / 10

Warning Flags

Competition type not specified

Positive Signals

Long-term contract for modernization efforts
Awarded to a reputable large IT contractor

Sector Analysis

IT services represent a significant and growing portion of federal spending as agencies continue to modernize legacy systems and enhance digital capabilities. HHS, like many large federal departments, relies heavily on IT for its core functions. Spending in this sector is generally increasing government-wide as agencies prioritize cybersecurity, cloud migration, and data analytics.

Small Business Impact

The contract details do not specify any small business set-asides or subcontracting requirements. As a large contract awarded to a major corporation, it is possible that Leidos, Inc. may engage small businesses as subcontractors, but this is not explicitly mandated by the provided information.

Oversight & Accountability

Performance oversight for this contract would typically fall under the purview of the Office of the Assistant Secretary for Administration within HHS. Contract officers and program managers are responsible for monitoring task order execution, ensuring deliverables meet requirements, and managing payments. Performance metrics are usually defined within the task orders, and underperformance could lead to corrective actions, contract modifications, or termination.

Related Government Programs

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

Risk Flags

Competition type not specified: This lack of transparency hinders the assessment of whether the government obtained the best value for taxpayer funds.

Frequently Asked Questions

What is this federal contract actually paying for?

This contract pays for engineering and task order services related to 'Next Generation IT Services' (NGITS) for the Department of Health and Human Services (HHS). This broadly includes the design, development, implementation, and maintenance of advanced IT systems and infrastructure. It likely covers areas such as cloud computing, cybersecurity enhancements, data management, network modernization, and the integration of new technologies to improve the efficiency, security, and functionality of HHS's IT operations. The goal is to move away from legacy systems towards more modern, agile, and secure IT solutions that better support the agency's mission.

Is this a good use of taxpayer money?

Based on the available information, it appears to be a potentially good use of taxpayer money. The contract addresses a critical need for IT modernization within a major federal agency. Leidos, Inc. is a qualified contractor, and the annual spending is within a reasonable range for such services. However, the lack of specified competition is a significant concern that prevents a definitive 'excellent' rating, as it raises questions about whether the best possible value was secured.

Why was this contractor chosen?

The contractor, Leidos, Inc., was likely chosen because it is a large, established company with extensive experience and a proven track record in providing complex IT services, engineering, and systems integration to government agencies, including HHS. The award being a BPA Call suggests that Leidos was previously awarded a Blanket Purchase Agreement, likely through a competitive process, which then allowed for task orders like this one to be issued.

How does this contract amount compare to similar ones?

The total contract value of $76.6 million over approximately nine years averages to about $9.5 million annually. This figure is within the expected range for large-scale IT modernization and engineering contracts awarded to major federal agencies. Comparable contracts for IT modernization across large departments like Defense or Homeland Security can range from tens to hundreds of millions of dollars annually, depending on the specific scope and complexity.

Could this money have been spent more effectively?

It's possible. The effectiveness of spending is heavily influenced by the level of competition. If this BPA Call was not competitively bid, or if the underlying BPA had limited competition, there's a chance that more competitive bidding could have yielded better pricing or more innovative solutions. Additionally, rigorous performance management and clear, measurable outcomes within the task orders are crucial for ensuring effectiveness and preventing scope creep or inefficiencies.

Who benefits from this contract beyond the contractor?

Beyond Leidos, Inc., the primary beneficiaries are the employees of HHS who rely on modern IT systems to perform their duties, and ultimately, the American public. Improved IT infrastructure leads to more efficient and secure delivery of health and human services, better data management for public health initiatives, and enhanced accessibility to government resources for citizens. It supports the government's ability to operate effectively and protect sensitive information.

Are there any red flags or concerns?

The primary red flag is the unspecified competition type. This lack of transparency makes it difficult to assess whether the government secured the best possible value for taxpayers. Additionally, the long duration of the contract (nearly 9 years) requires diligent oversight to ensure the services remain relevant and cost-effective as technology evolves rapidly.