NIH To Spend $40 Billion On Health IT Services

The National Institutes of Health (NIH) is gearing up to make a $40 billion procurement for health and biomedical-related IT services, one of the largest-ever proposed federal awards.

According to a pre-solicitation notice posted on FedBizOpps, the NIH is looking for contractors for the Chief Information Officer - Solutions and Partners 3(CIO-SP3) contract to provide IT services across the federal government but in particularly for the NIH and its parent agency, Health and Human Services.

CIO-SP3 is a a Government-wide Acquisition Contract (GWAC), which are multiple-award, indefinite delivery, and indefinite-quantity contracts that allow the government to purchase IT products and services without having to go through the competition process normally required of government procurement. The government began using them as a way to cut acquisition costs and streamline the process.

CIO-SP3 succeeds two current GWACs – the Chief Information Officer - Solutions and Partners 2 Innovations (CIO-SP2i) and the Image World 2 New Dimensions (IW2nd) -- which are set to expire in December, according to the notice.

Like its predecessor, the new solicitation is for health and biomedical-related IT services such as medical imaging, remote sensing, videoconferencing and Web services.

The contract is split into two – a $20 billion open-competition award and a small-business award of the same amount. Solicitations will be made available around Sept. 1, 2010, according to the notice.

Though the idea behind GWACs was to make federal procurement more efficient, they have raised concern from industry groups who worry that duplicative GWACs actually end up costing the government money and resources rather than being more cost-effective.

Government officials have defended the contracts by saying they benefit companies who feel compelled to bid on as many government projects as possible, because the all-inclusive nature of the contracts saves tens of thousands of dollars in bidding costs. This benefit, in turn, is returned to the federal government, they've said.

The only GWAC with a ceiling higher than the CIO-SP3 contract is the Alliant, which has a $50 billion ceiling and recently surpassed the $1 billion mark in task orders.