HHS awards $8.7M for administrative support, raising questions about competition and value

Contract Overview

Contract Amount: $8,714,727 ($8.7M)

Contractor: Chenega Enterprise Systems & Solutions, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2023-09-12

End Date: 2026-09-25

Contract Duration: 1,109 days

Daily Burn Rate: $7.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ADMINISTRATIVE AND TECHNICAL SUPPORT FOR ETSB

Place of Performance

Location: CHESAPEAKE, CHESAPEAKE CITY County, VIRGINIA, 23320

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $8.7 million to CHENEGA ENTERPRISE SYSTEMS & SOLUTIONS, LLC for work described as: ADMINISTRATIVE AND TECHNICAL SUPPORT FOR ETSB Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Fixed-price contract type offers some cost certainty but may not incentivize efficiency. 3. Contract duration of over three years suggests a need for sustained administrative support. 4. The specific services provided are administrative and technical support, a common requirement across agencies. 5. Contract value appears moderate for the duration and scope, but benchmarking is difficult without competition. 6. No small business set-aside, indicating potential missed opportunities for smaller firms.

Value Assessment

Rating: fair

The contract value of $8.7 million over approximately three years for administrative and technical support is difficult to benchmark due to the sole-source award. Without competitive bids, it's challenging to assess if this represents a fair market price or optimal value for money. The fixed-price nature provides some cost predictability, but the absence of competition means there's less pressure on the contractor to offer the most cost-effective solutions. Further analysis would require comparing this to similar sole-source contracts for comparable services, which are often less transparent.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This approach is typically used when only one responsible source can provide the required services. The lack of competition means there were no other bidders to compare against, which can lead to higher prices and less innovation. The justification for a sole-source award is critical for understanding why other potential contractors were not considered.

Taxpayer Impact: Taxpayers may be paying a premium for these services due to the absence of competitive bidding. Without multiple offers, the government has less leverage to negotiate favorable pricing, potentially leading to less efficient use of public funds.

Public Impact

The Centers for Disease Control and Prevention (CDC) benefits from this contract by receiving essential administrative and technical support. Services delivered include general management consulting and administrative support, crucial for the agency's operations. The geographic impact is primarily within the agency's operational locations, likely supporting federal employees. Workforce implications are indirect, as this contract supports existing federal staff rather than directly hiring new personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially leading to higher costs.
Lack of small business participation may reduce opportunities for smaller, specialized firms.
Fixed-price contract might not fully incentivize contractor efficiency if costs are not closely managed.
Transparency concerns due to sole-source nature, making value assessment difficult.

Positive Signals

Fixed-price contract provides cost certainty for the government.
Contract duration of over three years indicates a stable, ongoing need for services.
Contractor is likely experienced in providing administrative and technical support.
Awarded by a major health agency (HHS/CDC), suggesting a critical need for the services.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically administrative management and general management consulting. This is a broad category encompassing a wide range of support services essential for government operations. The market for these services is highly competitive, with numerous firms offering expertise. However, specific niche administrative support contracts, especially those requiring specialized knowledge or security clearances, can sometimes be awarded on a sole-source basis. The total federal spending in this NAICS code (541611) is substantial, reflecting its importance across various agencies.

Small Business Impact

This contract was not awarded as a small business set-aside, and the contractor, Chenega Enterprise Systems & Solutions, LLC, is likely a larger entity. This means that opportunities for small businesses to directly perform this work were not prioritized through this specific award mechanism. While the prime contractor may engage small businesses as subcontractors, the absence of a set-aside suggests a missed opportunity to directly foster small business growth and participation in this particular contract. Further investigation into subcontracting plans would be needed to assess the actual impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Health and Human Services (HHS) and the Centers for Disease Control and Prevention (CDC). Contract administration and performance monitoring are standard oversight mechanisms. Given the sole-source nature, the justification for this award and the contractor's performance will be key areas of scrutiny. Transparency may be limited due to the lack of public competition, but contract details and performance reports should be accessible through federal procurement data systems. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Administrative Support Services
Management and Consulting Services
Federal IT Support Contracts
Health Agency Support Contracts
Sole-Source Contract Awards

Risk Flags

Sole-source award raises concerns about competition and potential overpricing.
Lack of transparency in the justification for sole-source award.
No small business set-aside may limit opportunities for smaller firms.
Performance metrics and monitoring details are not publicly available.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $8.7 million to CHENEGA ENTERPRISE SYSTEMS & SOLUTIONS, LLC. ADMINISTRATIVE AND TECHNICAL SUPPORT FOR ETSB

Who is the contractor on this award?

The obligated recipient is CHENEGA ENTERPRISE SYSTEMS & SOLUTIONS, LLC.

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 $8.7 million.

What is the period of performance?

Start: 2023-09-12. End: 2026-09-25.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded on a 'NOT AVAILABLE FOR COMPETITION' basis, which is synonymous with a sole-source award. The specific justification for this sole-source award is not detailed in the provided data. Typically, agencies must document why full and open competition is not feasible, citing reasons such as unique capabilities of a single source, urgent and compelling needs, or specific government requirements that only one contractor can meet. Without this documentation, it is difficult to assess the validity of the sole-source determination and whether it truly served the government's best interest. This lack of transparency is a common concern with sole-source contracts.

How does the pricing of this contract compare to similar administrative support contracts, especially those awarded competitively?

Directly comparing the pricing of this $8.7 million sole-source contract to competitively awarded contracts is challenging without more specific service details and market data. Sole-source awards often carry a risk of higher pricing due to the absence of competitive pressure. To perform a robust comparison, one would need to identify similar contracts for administrative and technical support services of comparable scope, duration, and complexity that were awarded through full and open competition. Benchmarking would involve analyzing the per-hour rates, labor categories, and overall value proposition of those competitive contracts. The fixed-price nature of this contract provides some cost certainty, but it doesn't inherently guarantee value for money compared to a well-competed contract.

What are the key performance indicators (KPIs) for this contract, and how is performance being monitored?

The provided data does not specify the key performance indicators (KPIs) for this administrative and technical support contract. However, for a contract of this nature, typical KPIs would likely include metrics related to response times for technical issues, accuracy and timeliness of administrative tasks, adherence to service level agreements (SLAs), and overall client satisfaction. The government agency (HHS/CDC) would be responsible for monitoring the contractor's performance against these KPIs. Contract administration personnel would typically review performance reports, conduct regular meetings with the contractor, and ensure that the services delivered meet the requirements outlined in the contract statement of work. The effectiveness of this monitoring is crucial for ensuring value, especially in a sole-source scenario.

What is the track record of Chenega Enterprise Systems & Solutions, LLC in delivering similar administrative support services to the federal government?

Chenega Enterprise Systems & Solutions, LLC has a significant presence in federal contracting, often securing contracts across various agencies and service areas, including IT, logistics, and professional services. While specific details on their track record for *this exact type* of administrative and technical support for the CDC are not in the provided data, their history suggests they are an established government contractor. A deeper dive into their past performance evaluations (e.g., through the Contractor Performance Assessment Reporting System - CPARS) and other awarded contracts would provide a clearer picture of their reliability, quality of service, and past success in delivering similar support functions. Their ability to secure sole-source awards may indicate specialized capabilities or existing relationships.

What is the historical spending trend for administrative and technical support services by the CDC or HHS in this category?

The provided data does not include historical spending trends for administrative and technical support services by the CDC or HHS. To analyze this, one would need to access federal procurement databases (like USASpending.gov or FPDS) and query for similar contracts awarded by these agencies over several fiscal years. This analysis would involve looking at the total amount spent on NAICS code 541611 (Administrative Management and General Management Consulting Services) or related codes, identifying trends in contract values, award types (competitive vs. sole-source), and the number of contracts awarded. Understanding historical spending can help contextualize the current $8.7 million award, identify potential increases or decreases in spending, and assess whether this contract represents a significant shift in procurement patterns.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 75D301-23-R-72704

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 609 INDEPENDENCE PKWY, CHESAPEAKE, VA, 23320

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $14,885,727

Exercised Options: $8,714,727

Current Obligation: $8,714,727

Actual Outlays: $6,176,230

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline