NIH awards $83M for application development, with NTT DATA FEDHEALTH Inc. as prime contractor

Contract Overview

Contract Amount: $82,925,756 ($82.9M)

Contractor: NTT Data Fedhealth, Inc.

Awarding Agency: Department of the Interior

Start Date: 2019-02-15

End Date: 2024-08-14

Contract Duration: 2,007 days

Daily Burn Rate: $41.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 6

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: NATIONAL INSTITUTES OF HEALTH (NIH), NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASE (NIAID), OFFICE OF CYBER INFRASTRUCTURE AND COMPUTATIONAL BIOLOGY (OCICB) APPLICATION DEVELOPMENT SUPPORT SERVICES

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20852

State: Maryland Government Spending

Plain-Language Summary

Department of the Interior obligated $82.9 million to NTT DATA FEDHEALTH, INC. for work described as: NATIONAL INSTITUTES OF HEALTH (NIH), NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASE (NIAID), OFFICE OF CYBER INFRASTRUCTURE AND COMPUTATIONAL BIOLOGY (OCICB) APPLICATION DEVELOPMENT SUPPORT SERVICES Key points: 1. Contract value of $83 million over five years suggests significant investment in application development. 2. The contract was awarded under full and open competition, indicating a competitive bidding process. 3. A high number of bids (6) suggests strong market interest and potentially competitive pricing. 4. The contract type (Time and Materials) can pose cost control risks if not managed diligently. 5. The duration of the contract (over 2000 days) allows for sustained support and development. 6. The primary agency is the Department of the Interior, with the National Institutes of Health as the ultimate beneficiary. 7. The specific NAICS code (541512) points to a focus on computer systems design services.

Value Assessment

Rating: fair

The contract's value of $83 million over approximately five years for application development services appears substantial. Benchmarking this against similar contracts for IT development support within federal agencies is crucial. The Time and Materials (T&M) pricing structure, while flexible, can lead to cost overruns if not closely monitored and managed. Without specific performance metrics or detailed cost breakdowns, a definitive value-for-money assessment is challenging, but the competitive nature of the award offers some assurance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition after exclusion of sources,' which typically means it was broadly advertised and multiple bids were solicited. Receiving 6 bids indicates a healthy level of competition for these services. A higher number of bidders generally leads to better price discovery and can drive down costs for the government, as contractors vie to offer the most competitive proposals.

Taxpayer Impact: The robust competition suggests that taxpayer dollars are likely being used more efficiently, as multiple companies competed to win the contract, potentially leading to more favorable pricing than a sole-source award.

Public Impact

The primary beneficiary is the National Institutes of Health (NIH), specifically the National Institute of Allergy and Infectious Diseases (NIAID) and its Office of Cyber Infrastructure and Computational Biology (OCICB), which will receive application development support. Services delivered include computer systems design and related services essential for maintaining and enhancing critical IT infrastructure. The contract is managed by the Department of the Interior, indicating inter-agency collaboration for IT support. The geographic impact is primarily within Maryland, where the contractor is located, but the services support federal research and development nationwide.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Time and Materials (T&M) contract type can lead to cost escalation if not managed with strict oversight and defined ceilings.
The broad scope of 'application development support services' could lead to scope creep if requirements are not clearly defined and managed.
Reliance on a single prime contractor for a significant duration may present risks if performance degrades or if the contractor faces financial or operational challenges.

Positive Signals

Awarded through full and open competition, indicating a competitive process that should yield fair pricing.
The receipt of 6 bids suggests significant market interest and a robust competitive environment.
The contract duration allows for continuity of services and development of long-term solutions.
The contractor, NTT DATA FEDHEALTH, Inc., likely has a track record in providing IT services to federal agencies.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computer systems design and application development. The federal IT services market is substantial, with agencies consistently investing in modernizing and maintaining their digital infrastructure. This contract represents a portion of the broader federal spending on software development, IT consulting, and systems integration, which are critical for supporting agency missions. Comparable spending benchmarks would involve looking at other large-scale IT development contracts awarded to support scientific research or public health initiatives.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the primary contractor, NTT DATA FEDHEALTH, Inc., is likely a large business. While there is no explicit mention of small business subcontracting goals in the provided data, large federal contracts often include requirements for prime contractors to subcontract a certain percentage of the work to small businesses. The impact on the small business ecosystem would depend on the specific subcontracting plan, if any, associated with this award.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the Department of the Interior and the National Institutes of Health. The contract's Time and Materials nature necessitates diligent oversight to manage costs and ensure adherence to the scope of work. Transparency is facilitated through contract award databases like FPDS. While specific Inspector General (IG) jurisdiction isn't detailed, the NIH Office of the Inspector General would likely have oversight authority over funds allocated to NIH programs.

Related Government Programs

NIH Application Development Contracts
NIAID IT Support Services
Federal Computer Systems Design Services
Department of the Interior IT Procurement
Health IT Modernization Programs
Biomedical Research IT Infrastructure

Risk Flags

Cost Overrun Risk (T&M Contract Type)
Scope Creep Potential
Performance Monitoring Challenges
Contractor Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $82.9 million to NTT DATA FEDHEALTH, INC.. NATIONAL INSTITUTES OF HEALTH (NIH), NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASE (NIAID), OFFICE OF CYBER INFRASTRUCTURE AND COMPUTATIONAL BIOLOGY (OCICB) APPLICATION DEVELOPMENT SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is NTT DATA FEDHEALTH, INC..

Which agency awarded this contract?

Awarding agency: Department of the Interior (Departmental Offices).

What is the total obligated amount?

The obligated amount is $82.9 million.

What is the period of performance?

Start: 2019-02-15. End: 2024-08-14.

What is the historical spending pattern for application development support services at NIAID/OCICB?

Analyzing historical spending for application development support services at NIAID/OCICB requires accessing detailed procurement data over several fiscal years. Typically, agencies like NIH have consistent needs for IT support due to the dynamic nature of research and the necessity of robust computational infrastructure. Spending patterns can fluctuate based on specific project needs, technology upgrades, and budget allocations. For instance, there might be increased spending during periods of major system overhauls or the initiation of large-scale data analysis projects. Without direct access to historical obligation data for this specific office or function, it's difficult to provide precise figures. However, federal agencies generally show a trend of increasing investment in IT services to support their missions, driven by digital transformation initiatives and the growing volume of data generated by research.

How does the per-unit cost of this contract compare to similar federal application development contracts?

Determining the precise per-unit cost for this contract is challenging without knowing the specific labor categories, hours, and rates involved, as it is a Time and Materials (T&M) contract. T&M contracts bill for direct labor hours at specified hourly rates, plus actual costs for materials. To compare per-unit costs, one would need to benchmark specific labor categories (e.g., senior software engineer, project manager) against market rates for similar federal IT services contracts. Additionally, comparing the overall contract value ($83M) to the scope of work and expected deliverables against other large-scale federal application development contracts would provide a broader perspective. Contracts with similar scopes, durations, and competition levels would serve as the best comparators. Given the competitive award and the nature of IT services, the pricing is likely within a reasonable range, but detailed analysis of labor rates and indirect costs would be necessary for a definitive benchmark.

What are the key performance indicators (KPIs) used to evaluate NTT DATA FEDHEALTH, Inc.'s performance under this contract?

Key Performance Indicators (KPIs) for application development support services contracts are typically established in the Performance Work Statement (PWS) or Statement of Work (SOW). These KPIs are designed to measure the contractor's success in delivering the required services effectively and efficiently. Common KPIs in this domain include metrics related to software quality (e.g., defect density, code complexity), project delivery timeliness (e.g., on-time completion of milestones, adherence to schedules), system performance and availability, user satisfaction, and responsiveness to support requests. For this specific contract, KPIs might focus on the successful development, deployment, and maintenance of applications supporting NIAID's research and computational biology efforts. Performance is usually assessed through regular reviews, user feedback, and adherence to agreed-upon service levels.

What is the track record of NTT DATA FEDHEALTH, Inc. in delivering similar IT services to federal agencies?

NTT DATA FEDHEALTH, Inc. is a subsidiary of NTT DATA Services, a large global IT services provider with a significant presence in the U.S. federal government contracting space. They have a documented history of delivering a wide range of IT services, including application development, modernization, cloud migration, cybersecurity, and data analytics, to various federal agencies. Their portfolio often includes work with health-related agencies, aligning with the NIH's mission. Past performance evaluations, available through federal procurement databases and agency reports, would provide specific details on their success in meeting contract requirements, managing costs, and adhering to schedules on previous projects. Generally, large IT service providers like NTT DATA have established processes and experienced personnel to handle complex federal contracts.

What are the potential risks associated with the Time and Materials (T&M) contract type for this application development effort?

The primary risk associated with Time and Materials (T&M) contracts is the potential for cost overruns, as the government pays for the actual labor hours and material costs incurred by the contractor, plus a fixed fee or fixed hourly rate. Unlike fixed-price contracts, T&M contracts do not have a ceiling on the total cost unless explicitly defined. This necessitates robust government oversight to ensure that labor hours are reasonable and necessary, that work is progressing efficiently, and that costs are controlled. For application development, risks include scope creep, where the project expands beyond its original objectives, leading to increased hours; inefficient work practices; or the contractor not being incentivized to complete tasks quickly. Effective contract management, including detailed monitoring of labor hours, regular progress reviews, and clear task definitions, is crucial to mitigate these risks.

How does this contract align with the broader IT modernization goals of the NIH?

This contract directly supports the NIH's broader IT modernization goals by providing essential application development and support services. Modernizing IT infrastructure and applications is critical for advancing biomedical research, managing vast datasets, enhancing cybersecurity, and improving operational efficiency. By ensuring that NIAID and OCICB have up-to-date and functional applications, the NIH can accelerate scientific discovery, facilitate data sharing, and improve collaboration among researchers. Contracts like this enable the agency to adapt to new technological advancements, integrate disparate systems, and provide researchers with the tools they need to tackle complex health challenges. The focus on application development suggests an effort to build or enhance systems that are core to the agency's mission-critical functions.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 6

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 1660 INTERNATIONAL DR, FL 1, MCLEAN, VA, 22102

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Not Designated a Small Business, Small Business, Special Designations, Subchapter S Corporation, Indian (Subcontinent) American Owned Business, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $93,788,000

Exercised Options: $90,866,998

Current Obligation: $82,925,756

Actual Outlays: $79,174,532

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSN316201200160W

IDV Type: GWAC

Timeline