The long anticipated, $25 billion Strategic Partners Acquisition Readiness Contract (SPARC) was awarded by the Centers for Medicare and Medicaid Services (CMS) on June 8 (the notice was posted publicly on June 15). The indefinite delivery indefinite quantity (IDIQ) vehicle aims to more effectively procure IT services for Health and Human Services over the next 5 years – and hopefully with a bit less public scrutiny than occurred with its predecessor.
The vehicle was awarded with a small business and an unrestricted track. A whopping 54 companies made the cut for the small business track, and 27 large companies won the unrestricted vehicle. For the full list of awarded vendors, check out SPARC’s award notice on GovTribe.
SPARC replaces the Enterprise System Development (ESD) IDIQ, which was awarded in September 2007 and expires in September of this year (though many ESD task orders will continue well into 2017 and beyond). As many in the heath IT sector are aware, HHS has faced a great deal of scrutiny over the ESD IDIQ, and the way it has been used to award $100+ million task orders to large IT firms under less than rigorous procurement conditions. This famously came to light in 2013 with the problematic roll-out of healthcare.gov – the services for which were procured through the ESD IDIQ by expanding the scope of (and adding additional funds to) existing task order contracts with CGI Federal. (See our previous blog post on this topic.)
Another criticism of the ESD IDIQ was the manner in which it (sort of) failed to adhere to its small business objectives. Because the task order awards under ESD were high value, multi-year contracts, many of the small businesses on the vehicle were soon snatched up by the large IT firms in the industry. Axeltech, Buccaneer, and ViPS were all acquired by General Dynamics. Alta IT Services was acquired by ManTech. EDS was acquired by Hewlett Packard. IDL Solutions was acquired by CACI. iFed was acquired by Deloitte. Maricom Systems was acquired by CSC. The end result was that a handful of the top IT contractors in the industry were sitting on highly lucrative “small business” task orders. And new task orders were competed among fewer than 10 large companies instead of around 20 small businesses.
Here’s what the top five vendors look like on ESD right now. The dollar values next to each vendor name are total dollar obligations over the past four fiscal years. These five companies have received 76% of the total obligations under ESD since the beginning of FY 2013! (You can dig into these number on our summary page for the ESD IDIQ.)
HHS hopes to address the issues that arose out of ESD with the new SPARC IDIQ. As anyone who was involved in or has been observing is aware, this was a very slow, deliberate procurement process. Small business requirements, oversight mechanisms, and task order award processes have been given much more attention. The award pool is much larger. Communications to industry are simultaneously highly transparent but tightly controlled. In short, HHS has been signaling an intention for more rigorous processes, and more tightly scoped, competitive task order awards with (ostensibly) lower ceilings.
So far no task order awards have been announced. You can keep an eye on SPARC task order activity and comparative vendor performance on GovTribe’s SPARC IDIQ summary pages. Here's the page for the unrestricted track. Here's the small business track vehicle. Use the Add Alert button in the upper right to receive email notifications when new task orders are awarded. (Here's how Alerts work on GovTribe.)