VA awards $37.4M for Enterprise Data Warehouse support, highlighting long-term IT needs

Contract Overview

Contract Amount: $37,434,235 ($37.4M)

Contractor: Cerner Federal Solutions LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2017-07-27

End Date: 2022-05-25

Contract Duration: 1,763 days

Daily Burn Rate: $21.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF THIS TASK ORDER IS FOR ENTERPRISE DATA WAREHOUSE (DW) SUPPORT SERVICES.

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $37.4 million to CERNER FEDERAL SOLUTIONS LLC for work described as: IGF::OT::IGF THIS TASK ORDER IS FOR ENTERPRISE DATA WAREHOUSE (DW) SUPPORT SERVICES. Key points: 1. Contract value of $37.4M over nearly five years suggests significant investment in data infrastructure. 2. Full and open competition indicates a potentially competitive bidding process for these services. 3. The duration of the contract (1763 days) points to a need for sustained, ongoing support. 4. Fixed-price contract type may offer cost certainty but could limit flexibility for evolving requirements. 5. The award to Cerner Federal Solutions LLC suggests a focus on established vendors for critical IT systems. 6. This contract falls within the broader category of computer systems design services, a key area for federal IT modernization.

Value Assessment

Rating: good

The contract value of $37.4 million for Enterprise Data Warehouse (DW) support services over approximately 4.8 years appears reasonable given the scope of maintaining critical data infrastructure. Benchmarking against similar large-scale IT support contracts for federal agencies suggests that this pricing is within expected ranges for specialized DW services. The firm fixed-price nature provides cost predictability for the VA, though it's important to ensure the scope adequately covers evolving data needs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. While the number of bidders is not explicitly stated, this method generally fosters a competitive environment, which can lead to better pricing and service offerings. The VA's decision to use full and open competition suggests confidence in the market's ability to provide qualified vendors for complex IT support.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing and a wider pool of qualified contractors, which can drive down costs and improve the quality of services delivered for this essential data management function.

Public Impact

Veterans and VA staff benefit from improved access to and reliability of critical health and administrative data. The contract supports the core functions of the Department of Veterans Affairs' IT infrastructure. Geographic impact is nationwide, as the VA's data systems serve beneficiaries across the United States. Workforce implications include the need for specialized IT professionals skilled in data warehousing and system maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in due to the long-term nature of DW support.
Risk of scope creep if requirements are not clearly defined and managed.
Dependence on a single vendor for critical data infrastructure could pose continuity risks.
Ensuring adequate knowledge transfer and documentation for future system evolution.

Positive Signals

Award to an established vendor with demonstrated experience in federal IT.
Firm fixed-price contract provides budget certainty for the VA.
Full and open competition suggests a robust market response.
Long-term contract supports sustained operational capability for a critical system.

Sector Analysis

The federal IT services market is substantial, with significant spending allocated to maintaining and modernizing complex systems like data warehouses. This contract for Enterprise Data Warehouse support services fits within the broader Computer Systems Design Services sector (NAICS 541512). The VA's investment reflects the growing importance of data analytics and management in healthcare delivery and administrative operations. Comparable spending benchmarks for large-scale federal IT infrastructure support often run into tens or hundreds of millions of dollars over several years.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large-dollar IT services contract, it is unlikely that significant subcontracting opportunities for small businesses were mandated, though the prime contractor may engage them. The focus appears to be on large, established IT providers capable of handling complex enterprise-level systems.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs' contracting officers and program managers. The firm fixed-price nature provides a degree of financial oversight. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Health IT Modernization Programs
Department of Veterans Affairs Electronic Health Record (EHR) Modernization
Government-wide Data Management and Analytics Initiatives
IT Infrastructure Modernization Contracts
Enterprise Resource Planning (ERP) System Support

Risk Flags

Long-term reliance on a single vendor.
Potential for cost overruns if scope is not managed.
Cybersecurity risks associated with sensitive data.
Vendor lock-in concerns.
Ensuring adequate knowledge transfer and succession planning.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $37.4 million to CERNER FEDERAL SOLUTIONS LLC. IGF::OT::IGF THIS TASK ORDER IS FOR ENTERPRISE DATA WAREHOUSE (DW) SUPPORT SERVICES.

Who is the contractor on this award?

The obligated recipient is CERNER FEDERAL SOLUTIONS LLC.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $37.4 million.

What is the period of performance?

Start: 2017-07-27. End: 2022-05-25.

What is the track record of Cerner Federal Solutions LLC with the Department of Veterans Affairs for similar IT support contracts?

Cerner Federal Solutions LLC has a significant history of working with the Department of Veterans Affairs, particularly concerning health IT systems. They are a major contractor for the VA's electronic health record (EHR) system, which is a massive undertaking. This Enterprise Data Warehouse (DW) support contract likely leverages their existing expertise and infrastructure within the VA. Analyzing past performance on similar IT support or data management contracts would reveal their reliability, responsiveness, and ability to meet complex technical requirements within the VA's demanding environment. Past performance reviews and contract close-out reports would provide deeper insights into their success rate and any challenges encountered.

How does the $37.4 million contract value compare to other federal Enterprise Data Warehouse support contracts?

The $37.4 million contract value for Enterprise Data Warehouse (DW) support services over approximately 4.8 years is substantial but falls within the expected range for large-scale federal IT infrastructure projects. Federal agencies often invest tens to hundreds of millions of dollars in maintaining and upgrading their core data systems due to the complexity and criticality of the data managed. Contracts for similar DW support, data analytics platforms, or large IT system maintenance within agencies like the Department of Defense or Health and Human Services can easily reach or exceed this figure. The value is influenced by factors such as the size and scope of the data warehouse, the number of users, the required uptime, security protocols, and the level of specialized technical expertise needed.

What are the primary risks associated with a long-term, firm fixed-price contract for critical IT infrastructure support?

A primary risk with a long-term, firm fixed-price contract for critical IT infrastructure like an Enterprise Data Warehouse (DW) is the potential for the vendor to become entrenched, leading to reduced innovation or price increases upon subsequent contract renewals. For the government, the fixed-price nature can limit flexibility if requirements change significantly over the contract's duration; the VA might pay more than necessary if needs evolve beyond the original scope, or conversely, the contractor might underperform if the fixed price proves insufficient for unforeseen technical challenges. There's also a risk of knowledge silos developing, where the contractor gains deep institutional knowledge that is difficult for the government to replicate or transfer to another vendor, potentially increasing switching costs and risks in the future.

How effective is full and open competition in ensuring value for money for complex IT services like DW support?

Full and open competition is generally considered the most effective method for ensuring value for money in complex IT services like Enterprise Data Warehouse (DW) support. By allowing all responsible sources to compete, the government maximizes the potential for receiving competitive bids, which drives down prices and encourages innovation. A larger pool of bidders increases the likelihood of finding a vendor that offers the best combination of technical capability, service quality, and cost-effectiveness. However, the effectiveness also depends on the clarity of the solicitation requirements and the evaluation criteria used. If the solicitation is poorly defined or the evaluation process is flawed, even full and open competition may not yield the best value.

What are the historical spending patterns for Enterprise Data Warehouse support within the VA?

Historical spending patterns for Enterprise Data Warehouse (DW) support within the VA are likely characterized by consistent, significant investments. Maintaining a robust DW is crucial for managing vast amounts of veteran health, benefits, and administrative data. Over the years, the VA has undertaken major IT modernization efforts, including upgrades to its data infrastructure. Spending would have likely increased as data volumes grew and the need for advanced analytics became more pronounced. This $37.4 million award represents a substantial, multi-year commitment, suggesting a strategic focus on data management as a core capability. Examining prior contracts for DW maintenance, development, and support would reveal trends in spending levels and the types of services procured.

What are the implications of this contract award for the cybersecurity posture of the VA's data systems?

This contract award has significant implications for the cybersecurity posture of the VA's data systems. The Enterprise Data Warehouse (DW) is a repository for highly sensitive veteran data, making its security paramount. The chosen contractor, Cerner Federal Solutions LLC, will be responsible for implementing and maintaining security controls within the DW environment, adhering to stringent federal cybersecurity standards (e.g., NIST, FISMA). The effectiveness of these controls, the contractor's security practices, and the VA's oversight will directly impact the system's resilience against cyber threats. Regular security audits, vulnerability assessments, and incident response capabilities are critical components that this contract must address to ensure the confidentiality, integrity, and availability of the data.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Cerner Corporation

Address: 2800 ROCK CREEK PKWY, KANSAS CITY, MO, 64117

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $37,434,235

Exercised Options: $37,434,235

Current Obligation: $37,434,235

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $15,407,686

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA11816D1009

IDV Type: IDC

Timeline