HHS awards $37.1M for digital modernization, with Peraton Inc. leading IT services
Contract Overview
Contract Amount: $37,113,488 ($37.1M)
Contractor: Peraton Inc.
Awarding Agency: Department of Health and Human Services
Start Date: 2021-03-02
End Date: 2024-09-29
Contract Duration: 1,307 days
Daily Burn Rate: $28.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: TIME AND MATERIALS
Sector: IT
Official Description: OADC DIGITAL MODERNIZATION
Place of Performance
Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102
State: Virginia Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $37.1 million to PERATON INC. for work described as: OADC DIGITAL MODERNIZATION Key points: 1. Value for money appears fair given the contract's duration and scope. 2. Competition was robust, suggesting potential for competitive pricing. 3. Risk indicators are moderate, with performance context needing closer monitoring. 4. The contract is positioned within the IT services sector, focusing on modernization. 5. Spending aligns with broader government trends in digital transformation.
Value Assessment
Rating: fair
The contract's total value of $37.1 million over approximately 3.5 years suggests a moderate annual spend. Benchmarking against similar IT modernization contracts is challenging without more granular data on specific services delivered. However, the time and materials pricing structure can sometimes lead to cost overruns if not managed tightly. The number of bids received (2) is on the lower side for full and open competition, which might impact the final negotiated price.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. However, only two bids were received, which is less than ideal for maximizing price discovery and ensuring the most competitive outcome. While competition existed, the limited number of bidders could suggest potential barriers to entry or a concentrated market for these specific services.
Taxpayer Impact: The presence of competition is beneficial for taxpayers, as it theoretically drives down costs. However, with only two bidders, the savings may not be as significant as they could be with a larger pool of interested parties.
Public Impact
The Centers for Disease Control and Prevention (CDC) benefits from enhanced digital capabilities. Services delivered include computer systems design, crucial for modernizing health data infrastructure. The primary geographic impact is within Virginia, where the contractor is located. Workforce implications include potential for skilled IT professionals to support the modernization effort.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition (2 bidders) may have reduced price pressure.
- Time and materials contract type requires diligent oversight to control costs.
- Contract duration of over 3 years necessitates ongoing performance monitoring.
Positive Signals
- Awarded under full and open competition, allowing broad market participation.
- Focus on digital modernization aligns with critical public health needs.
- Contractor Peraton Inc. has a significant presence in the federal IT space.
Sector Analysis
This contract falls within the Information Technology (IT) sector, specifically focusing on computer systems design services. The federal IT market is vast, with significant spending allocated annually towards modernization and digital transformation initiatives across various agencies. This contract represents a portion of the Department of Health and Human Services' investment in upgrading its technological infrastructure to support its mission, particularly within the CDC. Comparable spending benchmarks would depend on the specific nature of the modernization, but overall IT services spending by the federal government runs into the hundreds of billions annually.
Small Business Impact
The data indicates this contract was not set aside for small businesses, and there is no explicit mention of small business subcontracting requirements. This suggests that the primary award went to a large business, Peraton Inc. The impact on the small business ecosystem is likely minimal unless Peraton actively engages small businesses as subcontractors, which is not detailed in the provided information. Further investigation into subcontracting plans would be needed to assess the full impact.
Oversight & Accountability
Oversight for this contract would primarily reside with the Centers for Disease Control and Prevention (CDC) contracting officers and program managers. Accountability measures are typically embedded within the contract's performance work statement, including deliverables, milestones, and service level agreements. Transparency is facilitated through contract databases like FPDS. The Inspector General for the Department of Health and Human Services would have jurisdiction for audits and investigations if any concerns regarding waste, fraud, or abuse arise.
Related Government Programs
- Federal IT Modernization Programs
- Health Information Technology Services
- CDC IT Infrastructure Support
- Computer Systems Design Services Contracts
Risk Flags
- Limited Competition
- Time and Materials Pricing
- Potential for Cost Overruns
Tags
it-services, health-it, digital-modernization, hhs, cdc, virginia, full-and-open-competition, time-and-materials, large-business, computer-systems-design
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $37.1 million to PERATON INC.. OADC DIGITAL MODERNIZATION
Who is the contractor on this award?
The obligated recipient is PERATON INC..
Which agency awarded this contract?
Awarding agency: Department of Health and Human Services (Centers for Disease Control and Prevention).
What is the total obligated amount?
The obligated amount is $37.1 million.
What is the period of performance?
Start: 2021-03-02. End: 2024-09-29.
What is Peraton Inc.'s track record with the federal government, particularly in IT modernization contracts?
Peraton Inc. is a significant federal contractor with a substantial portfolio of IT and technology services contracts across various agencies, including defense, intelligence, and civilian sectors. They have a history of performing large-scale IT modernization, cybersecurity, and mission support services. While specific performance details for this particular HHS contract are not provided, Peraton's overall federal footprint suggests they possess the capacity and experience for such endeavors. However, like any large contractor, their performance can vary across different contracts, and a deeper dive into past performance reviews and any past issues or awards related to similar contracts would provide a more comprehensive picture of their reliability and effectiveness in this domain.
How does the $37.1 million contract value compare to similar digital modernization efforts at HHS or other health agencies?
The $37.1 million contract value for digital modernization over approximately 3.5 years represents a moderate investment. To benchmark effectively, one would need to compare it against contracts for similar scope and complexity within HHS or other health-focused agencies like CMS or NIH. Factors such as the specific systems being modernized (e.g., data warehouses, public health surveillance systems, internal IT infrastructure), the level of customization required, and the duration of the contract are crucial. Without these specifics, a direct comparison is difficult. However, large-scale IT modernization projects within federal health agencies can range from tens of millions to hundreds of millions of dollars, making this contract appear to be within a typical range for a significant, but not agency-wide, modernization effort.
What are the primary risks associated with a Time and Materials (T&M) contract for IT modernization, and how are they mitigated here?
Time and Materials (T&M) contracts carry inherent risks, primarily the potential for cost overruns if not managed diligently, as the government pays for labor hours and materials used. This can lead to unpredictable final costs. For IT modernization, risks include scope creep, inefficient labor, and inflated material costs. Mitigation strategies typically involve robust oversight from the government, including detailed monitoring of labor hours, verification of materials, and strict adherence to the contract's ceiling price. The CDC's program managers and contracting officers would be responsible for ensuring efficient execution and controlling costs. Clear task definitions and regular progress reviews are essential to manage these risks effectively.
What does the limited number of bidders (2) for this full and open competition suggest about the market for these services?
The fact that only two bids were received for a full and open competition suggests several possibilities about the market for these specific computer systems design services for digital modernization. It could indicate a highly concentrated market where only a few companies possess the specialized expertise, security clearances, or past performance required. Alternatively, it might imply that the contract's requirements, duration, or estimated value were not attractive enough to draw a larger pool of bidders, or perhaps the solicitation process itself presented barriers. This limited competition could potentially lead to less aggressive pricing than if there were more bidders vying for the contract, impacting the overall value for taxpayers.
How does this contract align with the CDC's broader goals for data modernization and public health informatics?
This contract directly supports the CDC's critical mission by providing essential computer systems design services for digital modernization. In the realm of public health, modernizing data systems is paramount for effective disease surveillance, outbreak response, research, and public health informatics. Enhanced digital capabilities allow for faster data processing, better data integration from various sources, improved analytics, and more efficient communication of critical health information. By investing in modernization, the CDC aims to strengthen its ability to leverage data for evidence-based decision-making, ultimately improving public health outcomes and preparedness for future health challenges.
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 › IT AND TELECOM - IT MANAGEMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: 75D301-21-Q-72730
Offers Received: 2
Pricing Type: TIME AND MATERIALS (Y)
Evaluated Preference: NONE
Contractor Details
Address: 12975 WORLDGATE DR STE 7322, HERNDON, VA, 20170
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $37,113,488
Exercised Options: $37,113,488
Current Obligation: $37,113,488
Actual Outlays: $36,691,576
Subaward Activity
Number of Subawards: 2
Total Subaward Amount: $1,181,606
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Parent Contract
Parent Award PIID: 47QTCK18D0011
IDV Type: GWAC
Timeline
Start Date: 2021-03-02
Current End Date: 2024-09-29
Potential End Date: 2024-09-29 00:00:00
Last Modified: 2024-09-17
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