HHS awarded SEMANTICBITS LLC $30.4M for IT services, with 2 bids received

Contract Overview

Contract Amount: $30,433,141 ($30.4M)

Contractor: Semanticbits LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2019-02-04

End Date: 2022-03-11

Contract Duration: 1,131 days

Daily Burn Rate: $26.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $30.4 million to SEMANTICBITS LLC for work described as: IGF::OT::IGF Key points: 1. Value for money appears fair given the contract duration and fixed-price nature. 2. Competition was limited, with only two bids, potentially impacting price discovery. 3. Risk indicators are moderate, with a fixed-price contract mitigating cost overrun risks. 4. Performance context is within IT services for healthcare administration. 5. Sector positioning is within the broader federal IT services market.

Value Assessment

Rating: fair

The contract's total value of $30.4 million over approximately three years suggests a moderate annual spend. Benchmarking against similar IT services contracts is challenging without more specific service details. However, the firm fixed-price structure indicates a commitment to a defined cost, which is generally favorable for the government. The number of bids received (2) is on the lower side for a full and open competition, which could suggest less aggressive pricing than a more competitive scenario.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. However, only two bids were received. This level of competition is lower than ideal for ensuring the most competitive pricing. While the process was open, the limited number of bidders may have reduced the pressure on SEMANTICBITS LLC to offer the lowest possible price.

Taxpayer Impact: With only two bidders, taxpayers may not have benefited from the full range of competitive pricing that a larger pool of offers could have generated.

Public Impact

Beneficiaries include the Centers for Medicare and Medicaid Services (CMS) and potentially healthcare providers and beneficiaries who rely on the services supported by this contract. Services delivered likely involve IT support, system maintenance, or development related to healthcare programs. Geographic impact is primarily within the federal government, specifically CMS operations. Workforce implications may include direct employment by SEMANTICBITS LLC and indirect support roles within CMS.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition could lead to higher costs for taxpayers.
Lack of detailed service descriptions makes independent value assessment difficult.

Positive Signals

Firm fixed-price contract structure helps control costs.
Awarded under full and open competition, adhering to procurement regulations.

Sector Analysis

The federal IT services market is vast and highly competitive. This contract falls within the 'Other Computer Related Services' category (NAICS 541519), which encompasses a wide range of IT support and consulting. Spending in this sector is consistently high as agencies modernize systems and manage complex data. Comparable benchmarks would depend on the specific nature of the 'Other Computer Related Services' provided, but the $30.4M value over three years is a significant award.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information on subcontracting plans. Given the contract value and the nature of IT services, it's possible that larger firms or joint ventures were the primary bidders. Further analysis would be needed to determine if small businesses had opportunities to participate either as prime contractors or subcontractors.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services' internal procurement and program management offices. The Centers for Medicare and Medicaid Services (CMS) would be responsible for monitoring performance and ensuring compliance. Inspector General oversight may be involved if specific concerns or allegations of fraud, waste, or abuse arise. Transparency is generally maintained through contract award databases like FPDS.

Related Government Programs

Centers for Medicare and Medicaid Services IT Support Contracts
Federal Health IT Services
IT Professional Services
Other Computer Related Services Contracts

Risk Flags

Limited Competition
Potential for Cost Overruns (mitigated by FFP)
Cybersecurity Risks

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $30.4 million to SEMANTICBITS LLC. IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is SEMANTICBITS LLC.

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 $30.4 million.

What is the period of performance?

Start: 2019-02-04. End: 2022-03-11.

What specific IT services did SEMANTICBITS LLC provide under this contract?

The provided data indicates the contract falls under NAICS code 541519, 'Other Computer Related Services.' This is a broad category that can include a wide range of IT activities such as IT management consulting, computer facilities management, computer disaster recovery services, and computer systems integration consulting services. Without more specific contract line item details or a statement of work, the precise nature of the services rendered by SEMANTICBITS LLC remains unspecified. These services likely supported the operational needs of the Centers for Medicare and Medicaid Services (CMS), potentially involving system maintenance, data management, or IT infrastructure support critical to healthcare program administration.

How does the $30.4 million contract value compare to similar IT services contracts awarded by CMS?

Comparing the $30.4 million contract value for SEMANTICBITS LLC requires context regarding the contract's duration and scope. This award spans from February 4, 2019, to March 11, 2022, approximately three years. CMS frequently awards large IT contracts, often in the tens or hundreds of millions of dollars, for system development, modernization, and ongoing support. For instance, contracts for electronic health record systems, data analytics platforms, or claims processing systems can exceed this amount significantly. However, for specific 'Other Computer Related Services' that might be more focused on maintenance or specialized support, $30.4 million over three years represents a substantial, but not exceptionally large, investment. Benchmarking would ideally involve comparing it to contracts with similar NAICS codes and service descriptions within CMS.

What are the primary risks associated with this contract for the government?

The primary risks associated with this contract include potential underperformance by the contractor, SEMANTICBITS LLC, leading to disruptions in critical CMS operations. Given the limited competition (only two bids), there's a risk that the government did not secure the most cost-effective solution, potentially leading to higher-than-necessary expenditures. Another risk is vendor lock-in if the services provided are highly specialized and difficult to transition to another vendor. Finally, as with any IT contract, cybersecurity risks are present, requiring robust security measures and oversight to protect sensitive healthcare data managed by CMS.

What was the historical spending pattern for similar services by CMS prior to this award?

Historical spending patterns for similar services by CMS prior to this award would need to be analyzed through federal procurement databases like FPDS. Generally, CMS has a consistent and significant history of awarding contracts for IT services, given its role in managing vast healthcare programs like Medicare and Medicaid. Spending on 'Other Computer Related Services' (NAICS 541519) is a recurring necessity for maintaining and upgrading the complex IT infrastructure that supports these programs. Analyzing prior years would reveal trends in contract values, types of services procured, and the contractors frequently engaged, providing context for the $30.4 million award to SEMANTICBITS LLC.

Does the contractor, SEMANTICBITS LLC, have a significant track record with federal contracts, particularly with HHS?

To assess SEMANTICBITS LLC's track record, a review of federal procurement databases (like FPDS) is necessary. This would reveal the extent of their contract history, including awards from HHS and other agencies. Key metrics to examine would include the total value of contracts awarded, the types of services performed, past performance ratings (if available), and any history of contract disputes or terminations. A strong track record with HHS would suggest familiarity with the agency's requirements and processes, potentially mitigating performance risks. Conversely, a limited or problematic history might raise concerns about their capability to fulfill this $30.4 million contract effectively.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related 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

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: ICF International, Inc.

Address: 1902 RESTON METRO PLAZA, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $30,433,141

Exercised Options: $30,433,141

Current Obligation: $30,433,141

Actual Outlays: $12,013,609

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F192BA

IDV Type: FSS

Timeline