OptumServe awarded $44.5M for Data Services Hub extension by HHS CMS

Contract Overview

Contract Amount: $44,527,608 ($44.5M)

Contractor: Optumserve Technology Services, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2019-03-29

End Date: 2020-06-30

Contract Duration: 459 days

Daily Burn Rate: $97.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: DATA SERVICES HUB (DSH) EXTENSION

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $44.5 million to OPTUMSERVE TECHNOLOGY SERVICES, INC. for work described as: DATA SERVICES HUB (DSH) EXTENSION Key points: 1. Contract awarded through full and open competition, suggesting a competitive pricing environment. 2. The contract type is Cost Plus Fixed Fee, which can incentivize cost control but requires robust oversight. 3. The duration of 459 days indicates a medium-term project with ongoing service delivery. 4. The North American Industry Classification System (NAICS) code 541512 points to computer systems design services. 5. The award was a single delivery order, suggesting a focused scope within a larger potential contract vehicle. 6. The contract was not set aside for small businesses, indicating it was open to all eligible large and small businesses.

Value Assessment

Rating: good

The contract value of $44.5 million for a 459-day period for data services hub extension appears reasonable given the scope of computer systems design services. Benchmarking against similar IT service contracts within HHS would provide a more precise value-for-money assessment. The Cost Plus Fixed Fee structure necessitates careful monitoring of costs to ensure efficiency and prevent overruns, but it allows for flexibility in complex IT projects.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders likely had the opportunity to submit proposals. This competitive process is generally expected to yield fair market prices and encourage innovation from the participating companies. The specific number of bidders is not provided, but the designation suggests a robust selection process.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process which typically drives down costs and ensures the government receives the best value for its investment in critical data services.

Public Impact

Beneficiaries include the Centers for Medicare and Medicaid Services (CMS) and potentially healthcare providers and beneficiaries who rely on the data services hub. Services delivered include computer systems design and related support for the Data Services Hub. The geographic impact is primarily within the operational scope of CMS, likely supporting national healthcare data initiatives. Workforce implications may involve specialized IT professionals for system design, development, and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts require diligent oversight to manage costs effectively.
Lack of specific bidder count limits full assessment of competitive intensity.
The extension nature of the award suggests potential for follow-on work and evolving requirements.

Positive Signals

Awarded through full and open competition, indicating a competitive marketplace.
The contract supports critical data services for CMS, a vital agency.
The fixed fee component provides some cost certainty for the government.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computer systems design. The market for such services is large and highly competitive, with numerous firms offering specialized solutions. This contract likely supports CMS's ongoing efforts to manage and enhance its data infrastructure, which is crucial for healthcare policy and operations. Comparable spending benchmarks for IT system design and support within federal agencies can vary widely based on complexity and scope.

Small Business Impact

This contract was not set aside for small businesses, nor does it indicate any specific subcontracting requirements for small businesses. This suggests that the primary award went to a large business, and opportunities for small businesses would likely be through subcontracting if the prime contractor chooses to engage them. The absence of a set-aside may limit direct opportunities for small businesses to compete for this specific award.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract would typically be managed by the contracting officer and technical points of contact within CMS. Accountability measures would involve performance reviews against contract requirements and milestones. Transparency is facilitated through contract award databases, though detailed cost breakdowns may be proprietary. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Healthcare IT Services
Data Management Systems
Federal IT Modernization Programs
Centers for Medicare and Medicaid Services Contracts

Risk Flags

Cost Plus Fixed Fee contract type requires robust oversight.
Potential for scope creep in IT system design contracts.
Dependence on contractor performance for critical data services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $44.5 million to OPTUMSERVE TECHNOLOGY SERVICES, INC.. DATA SERVICES HUB (DSH) EXTENSION

Who is the contractor on this award?

The obligated recipient is OPTUMSERVE TECHNOLOGY SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Medicare and Medicaid Services).

What is the total obligated amount?

The obligated amount is $44.5 million.

What is the period of performance?

Start: 2019-03-29. End: 2020-06-30.

What is the historical spending pattern for the Data Services Hub (DSH) by CMS prior to this award?

Analyzing historical spending for the Data Services Hub (DSH) prior to this $44.5 million award would provide crucial context on the program's lifecycle and investment trends. Without specific prior data, it's difficult to ascertain if this award represents an increase, decrease, or stable level of funding for DSH operations and extensions. Understanding past expenditures can reveal patterns of growth, potential cost efficiencies achieved over time, or significant shifts in program scope. For instance, if previous DSH contracts were significantly smaller, this award might indicate an expansion of services or increased complexity. Conversely, if prior spending was higher, this could suggest a consolidation or maturation of the system. A comprehensive review would involve examining contract vehicles, task orders, and associated dollar values over several fiscal years to establish a baseline and identify any anomalies or trends.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar IT system design services at CMS?

The Cost Plus Fixed Fee (CPFF) contract type, used for this $44.5 million Data Services Hub extension, is common for complex IT projects where the scope may evolve or is not fully defined at the outset. In a CPFF contract, the contractor is reimbursed for allowable costs plus a predetermined fixed fee representing profit. This contrasts with Fixed Price contracts, which offer greater cost certainty to the government but can be risky for contractors if costs escalate unexpectedly. Cost Plus Incentive Fee (CPIF) contracts, another alternative, include incentives for meeting or exceeding cost, schedule, or performance targets. For IT system design services at CMS, CPFF is often chosen when innovation and flexibility are paramount, allowing the contractor to adapt to changing technical requirements. However, it necessitates robust government oversight to ensure costs remain reasonable and aligned with the project's objectives, as the government bears the risk of cost overruns.

What are the key performance indicators (KPIs) used to measure the success of this Data Services Hub extension contract?

Key Performance Indicators (KPIs) for a Data Services Hub extension contract like this one, valued at $44.5 million, are critical for ensuring the contractor, OptumServe Technology Services, Inc., delivers on its obligations. While specific KPIs are not detailed in the award data, typical metrics for such IT system design and support contracts often include system uptime and availability, data processing speed and accuracy, response times for user queries, successful completion of development milestones, adherence to security protocols, and user satisfaction. For a Data Services Hub, KPIs might also focus on the reliability and integrity of the data managed, the efficiency of data retrieval and analysis capabilities, and the successful integration of new features or modules. The government's technical team would monitor these KPIs regularly, often through performance reports submitted by the contractor, to assess progress and ensure the services meet the defined requirements and provide value.

What is the track record of OptumServe Technology Services, Inc. with similar federal IT contracts, particularly within HHS?

OptumServe Technology Services, Inc. has a significant track record with federal IT contracts, including within the Department of Health and Human Services (HHS). As a major government contractor, they have been involved in various health IT initiatives, often focusing on large-scale data management, system integration, and modernization efforts. Their experience likely encompasses projects similar in scope and complexity to the Data Services Hub extension. Analyzing their past performance on contracts, including any awards, past performance evaluations, and any instances of contract disputes or challenges, would provide insight into their reliability, technical capabilities, and ability to manage complex projects within budget and schedule. Given their presence in the federal health IT space, it is probable they have managed numerous contracts requiring adherence to strict data security and privacy regulations, such as HIPAA.

How does the $44.5 million award compare to the total IT spending by CMS in the fiscal year it was awarded?

To assess how the $44.5 million award for the Data Services Hub extension compares to the total IT spending by the Centers for Medicare and Medicaid Services (CMS) in the fiscal year it was awarded (likely 2019 or 2020, given the award and performance periods), one would need access to CMS's comprehensive IT budget data for those years. CMS, as a major agency within HHS, manages a substantial IT budget to support its vast operations, including healthcare eligibility, claims processing, and data analytics. If CMS's total IT budget was in the billions, this $44.5 million contract would represent a specific, albeit significant, portion allocated to a critical data infrastructure component. Understanding this proportion helps contextualize the investment relative to CMS's overall technology priorities and spending capacity. Without the total IT budget figures, it's challenging to definitively state whether this award was a major or minor component of their overall IT expenditure.

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

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: RFPCMS2016SPARC

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Unitedhealth Group Incorporated

Address: 10480 LITTLE PATUXENT PKWY STE 310, COLUMBIA, MD, 21044

Business Categories: Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $44,527,608

Exercised Options: $44,527,608

Current Obligation: $44,527,608

Actual Outlays: $151,281

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HHSM500201600014I

IDV Type: IDC

Timeline