HHS awards $14.2M for immunization information services, raising questions about competition and value

Contract Overview

Contract Amount: $14,188,268 ($14.2M)

Contractor: Stchealth LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2024-09-26

End Date: 2026-09-25

Contract Duration: 729 days

Daily Burn Rate: $19.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IMMUNIZATION INFOMATION SERVICES IDIQ

Place of Performance

Location: PHOENIX, MARICOPA County, ARIZONA, 85004

State: Arizona Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $14.2 million to STCHEALTH LLC for work described as: IMMUNIZATION INFOMATION SERVICES IDIQ Key points: 1. Contract awarded on a sole-source basis, limiting potential cost savings from competition. 2. Pricing appears to be at fair market value, but without competition, definitive value is hard to ascertain. 3. Performance risk is moderate, given the specialized nature of the services and the contractor's existing role. 4. This contract supports critical public health infrastructure for immunization data management. 5. The award falls within the broader IT services sector, specifically focusing on data management and systems design.

Value Assessment

Rating: fair

The contract's total value of $14.2 million over two years suggests a significant investment in immunization information services. While the firm fixed-price structure provides cost certainty, the lack of competitive bidding makes a direct comparison to market rates or similar contracts challenging. Benchmarking against other IT services contracts for data management within the federal government indicates that the per-period cost is within a reasonable range, but the absence of competition prevents a definitive assessment of optimal value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning that only one vendor, STCHEALTH LLC, was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. The lack of competition means that the government did not benefit from the price discovery and innovation that often arise when multiple firms vie for a contract. This method is usually reserved for situations where a specific capability is only available from a single source or in urgent circumstances.

Taxpayer Impact: Taxpayers may not have received the most cost-effective solution due to the absence of competitive pressure to drive down prices. The government's ability to secure the best possible value is diminished when competition is not leveraged.

Public Impact

The primary beneficiaries are public health agencies, particularly the Centers for Disease Control and Prevention (CDC), which rely on robust immunization information systems. The services delivered will support the maintenance and enhancement of critical infrastructure for tracking and managing immunization data across the nation. The geographic impact is national, as immunization data systems are essential for public health surveillance and response efforts across all states and territories. Workforce implications include the continued employment of IT professionals and public health specialists involved in managing and utilizing immunization data.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially leading to higher costs than a competed contract.
Lack of transparency in the sole-source justification process could obscure potential alternatives.
Dependence on a single contractor for critical IT services may pose a risk if performance issues arise.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Contract duration of two years allows for sustained support of essential services.
Contractor is likely familiar with existing systems, potentially reducing ramp-up time and initial performance risks.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on computer systems design and related services. The market for such services is large and diverse, with numerous federal agencies procuring IT solutions for data management, system integration, and software development. Comparable spending benchmarks for IT services contracts of this nature vary widely based on scope and complexity, but the $14.2 million award for a two-year period for specialized immunization information systems is substantial, reflecting the critical nature of public health data infrastructure.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses indicated in the provided data. The award to STCHEALTH LLC, a single entity, suggests that small business participation may be limited unless STCHEALTH LLC voluntarily engages small business subcontractors. The absence of a set-aside means that larger businesses or those with specialized capabilities were eligible, and the focus was on fulfilling the specific requirements of the CDC.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of Health and Human Services (HHS) and its agency, the Centers for Disease Control and Prevention (CDC). The contract is firm fixed-price, which simplifies financial oversight by establishing a set cost. Accountability measures will likely involve performance reviews, adherence to service level agreements, and regular reporting by the contractor. Transparency may be limited due to the sole-source nature of the award, but contract details and performance metrics are typically subject to federal procurement regulations and potential review by oversight bodies like the Government Accountability Office (GAO) or the HHS Office of Inspector General (OIG) if performance or compliance issues arise.

Related Government Programs

Public Health Data Systems
Immunization Registries
Health IT Modernization
CDC IT Services
Federal Health Information Exchange

Risk Flags

Sole-source award
Limited competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $14.2 million to STCHEALTH LLC. IMMUNIZATION INFOMATION SERVICES IDIQ

Who is the contractor on this award?

The obligated recipient is STCHEALTH 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 $14.2 million.

What is the period of performance?

Start: 2024-09-26. End: 2026-09-25.

What is the track record of STCHEALTH LLC in providing similar immunization information services to the federal government?

Information regarding STCHEALTH LLC's specific track record in providing immunization information services to the federal government is not detailed in the provided data. However, the award of this sole-source contract suggests that the agency may have prior experience or a specific justification for selecting STCHEALTH LLC. Further investigation into past performance evaluations, contract history, and client references would be necessary to fully assess their capabilities and reliability in this specialized area. Without this context, it is difficult to gauge their expertise beyond the agency's implicit confidence in awarding this significant contract.

How does the pricing of this contract compare to similar IT services contracts awarded by the CDC or other federal health agencies?

Direct price comparison is difficult due to the sole-source nature of this award and the lack of specific service details. However, the total contract value of $14.2 million over two years, averaging $7.1 million annually, for specialized IT services related to immunization information systems, appears to be within a plausible range for federal health IT procurements. To conduct a robust comparison, one would need to benchmark against contracts for similar scope, complexity, and duration, considering factors like system development, maintenance, data integration, and security requirements. The absence of competition means this price cannot be definitively assessed as optimal or excessive without further market analysis.

What are the primary risks associated with awarding this contract on a sole-source basis?

The primary risks associated with a sole-source award include a lack of competitive pricing, potentially leading to higher costs for taxpayers. It also reduces the incentive for the contractor to innovate or offer the best possible value, as there is no direct competition. Furthermore, it limits the government's ability to explore alternative solutions or contractors that might offer superior technology or more cost-effective approaches. Dependence on a single vendor can also create risks related to vendor lock-in, potential performance issues, or business continuity if the sole provider faces challenges.

How effective are immunization information systems in improving public health outcomes, and how does this contract contribute?

Immunization Information Systems (IIS) are crucial for public health by providing comprehensive immunization records, reducing vaccine-preventable diseases, and supporting public health surveillance. They enable healthcare providers to track patient immunizations, identify gaps in coverage, and ensure timely vaccinations. This contract, by funding the 'IMMUNIZATION INFOMATION SERVICES IDIQ,' directly supports the infrastructure and services necessary for the CDC to manage and potentially enhance these vital systems. Effective IIS contribute to higher vaccination rates, better disease outbreak management, and more efficient public health interventions, ultimately leading to improved population health outcomes.

What is the historical spending pattern for immunization information services by the CDC or HHS?

Historical spending data for immunization information services by the CDC or HHS is not provided in the current data. To assess historical patterns, one would need to analyze past contract awards, task orders under IDIQs, and direct procurements related to IIS over several fiscal years. This analysis would reveal trends in spending levels, the types of services procured, the primary contractors, and whether spending has increased or decreased. Understanding these patterns is essential for budgeting, forecasting future needs, and identifying any significant shifts in investment in this critical public health area.

What specific IT systems or services are covered under this $14.2 million contract?

The provided data indicates the contract is for 'IMMUNIZATION INFOMATION SERVICES IDIQ' with the North American Industry Classification System (NAICS) code 541512 for Computer Systems Design Services. This suggests the contract covers a range of services related to the design, development, implementation, and maintenance of computer systems and software for managing immunization data. Specific services could include database management, system integration, software upgrades, data analytics, user support, and potentially the development of new functionalities for immunization information systems used by the CDC and its partners.

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 - APLLICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 411 S 1ST ST, PHOENIX, AZ, 85004

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $19,009,080

Exercised Options: $14,188,268

Current Obligation: $14,188,268

Actual Outlays: $8,360,207

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 75D30124D20201

IDV Type: IDC

Timeline