HHS awards $21.2M for IT foundational components support to Flexion Inc., with a 5-year duration

Contract Overview

Contract Amount: $21,219,929 ($21.2M)

Contractor: Flexion Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2020-08-06

End Date: 2025-03-19

Contract Duration: 1,686 days

Daily Burn Rate: $12.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: CCSQ HAS A NEED FOR INFORMATION SYSTEMS FOUNDATIONAL COMPONENTS SUPPORT (ISFCS) FOUNDATIONAL COMPONENTS (FC) SUPPORT. THE SCOPE OF THE REQUIREMENT IS TO SOLVE COMMONLY OCCURRING PROBLEMS WITHIN THE DEVELOPMENT TEAMS, DEVELOP SERVICES TO ENABLE SELF-S

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $21.2 million to FLEXION INC for work described as: CCSQ HAS A NEED FOR INFORMATION SYSTEMS FOUNDATIONAL COMPONENTS SUPPORT (ISFCS) FOUNDATIONAL COMPONENTS (FC) SUPPORT. THE SCOPE OF THE REQUIREMENT IS TO SOLVE COMMONLY OCCURRING PROBLEMS WITHIN THE DEVELOPMENT TEAMS, DEVELOP SERVICES TO ENABLE SELF-S Key points: 1. Contract focuses on providing foundational components support for information systems, aiming to resolve common development team issues. 2. The contract utilizes a Firm Fixed Price (FFP) type, which shifts cost risk to the contractor. 3. Awarded under a Blanket Purchase Agreement (BPA) Call, suggesting a pre-negotiated framework for services. 4. The contract duration is substantial at 1686 days, indicating a long-term need for these IT services. 5. The North American Industry Classification System (NAICS) code 541511 points to custom computer programming services. 6. The contract is not set aside for small businesses, nor does it indicate specific subcontracting goals.

Value Assessment

Rating: good

The total award amount of $21.2 million over approximately 4.6 years suggests a moderate annual spend for IT foundational components. Benchmarking this against similar custom computer programming services contracts would provide a clearer picture of value for money. The Firm Fixed Price (FFP) contract type is generally favorable for the government when scope is well-defined, as it caps potential cost overruns. However, without detailed task order data, a precise value-for-money assessment is challenging.

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 offers. The specific mechanism used was a BPA Call, which implies that a broader BPA was previously competed, and this call is a specific order against that agreement. The number of bidders for this specific call is not provided, but the 'full and open' designation suggests a competitive process was intended.

Taxpayer Impact: Full and open competition generally leads to better price discovery and potentially lower costs for taxpayers by allowing a wide range of vendors to compete.

Public Impact

The primary beneficiaries are the development teams within the Centers for Medicare and Medicaid Services (CMS) who will receive improved foundational IT components. Services delivered include support for information systems, aiming to solve common problems and enable self-service capabilities. The geographic impact is primarily within the Department of Health and Human Services, likely concentrated where CMS IT operations are based. Workforce implications may include the need for specialized IT personnel to deliver these foundational components, potentially impacting both government and contractor staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if 'foundational components' are not clearly defined, leading to cost increases.
Reliance on a single contractor for critical IT foundational elements could pose a risk if performance falters.
The long contract duration might lead to technology obsolescence if not managed proactively.

Positive Signals

The use of a BPA Call suggests an existing, potentially efficient procurement vehicle.
Firm Fixed Price contract type provides cost certainty for the government.
Awarded under full and open competition, indicating a robust selection process.

Sector Analysis

This contract falls within the custom computer programming services sector, a significant segment of the IT services market. This sector is characterized by a high demand for specialized skills in software development, system integration, and IT support. The market size for federal IT services is substantial, with agencies like HHS being major spenders. This contract appears to address a core need for maintaining and improving the IT infrastructure that supports critical healthcare programs.

Small Business Impact

This contract was not set aside for small businesses, and there is no explicit indication of small business subcontracting requirements. This means that the primary contractor, Flexion Inc., is responsible for fulfilling the contract requirements. The absence of set-asides or subcontracting goals suggests that the focus was on obtaining the best solution through full and open competition rather than specifically promoting small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. Accountability measures are inherent in the Firm Fixed Price (FFP) contract type, where the contractor is responsible for delivering services within the agreed-upon price. Transparency is facilitated through contract award databases and reporting requirements. The Department of Health and Human Services' Office of Inspector General (OIG) may conduct audits or investigations if performance or financial concerns arise.

Related Government Programs

Health Information Technology Services
Custom Software Development
IT Infrastructure Support
Federal IT Modernization Programs
Centers for Medicare and Medicaid Services IT Contracts

Risk Flags

Potential for scope ambiguity
Long-term technology obsolescence risk
Contractor performance dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $21.2 million to FLEXION INC. CCSQ HAS A NEED FOR INFORMATION SYSTEMS FOUNDATIONAL COMPONENTS SUPPORT (ISFCS) FOUNDATIONAL COMPONENTS (FC) SUPPORT. THE SCOPE OF THE REQUIREMENT IS TO SOLVE COMMONLY OCCURRING PROBLEMS WITHIN THE DEVELOPMENT TEAMS, DEVELOP SERVICES TO ENABLE SELF-S

Who is the contractor on this award?

The obligated recipient is FLEXION 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 $21.2 million.

What is the period of performance?

Start: 2020-08-06. End: 2025-03-19.

What is Flexion Inc.'s track record with federal contracts, particularly within HHS?

Flexion Inc. has a history of federal contracting, including work with the Department of Health and Human Services (HHS). Analyzing their past performance on similar IT services contracts, especially those involving custom programming and foundational components, is crucial. This includes reviewing past performance evaluations, any contract modifications, and the timeliness and quality of their deliverables. Understanding their experience with the specific systems or platforms used by CMS would also provide insight into their capability to successfully execute this current contract. A review of their contract history might reveal if they have previously managed large-scale IT support efforts within federal agencies and how effectively they have done so.

How does the $21.2 million award compare to similar custom computer programming services contracts?

The $21.2 million award for custom computer programming services over approximately 4.6 years represents an average annual value of roughly $4.6 million. To benchmark this effectively, it's necessary to compare it against other federal contracts awarded under NAICS code 541511 for similar scope and complexity. Factors such as the specific services provided (e.g., system development, integration, maintenance), the agency, and the contract duration are important comparison points. If this contract's value per year is significantly higher or lower than comparable contracts, it could indicate either exceptional value or potential overpricing. Accessing contract databases and performance data for similar procurements is key to this analysis.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks include potential scope creep, as 'foundational components' can be broadly interpreted, leading to cost overruns despite the FFP structure. Technological obsolescence is another risk given the contract's long duration; failure to adapt to new technologies could diminish the value of the services. Contractor performance failure is a constant risk, potentially impacting critical CMS operations. Mitigation strategies likely involve robust contract management, clear definition of deliverables, regular performance reviews, and potentially incorporating clauses for technology refresh or adaptation. The FFP structure itself mitigates financial risk for the government, provided the scope is well-managed.

How effective is the 'BPA Call' mechanism for procuring these foundational IT components?

The Blanket Purchase Agreement (BPA) Call mechanism is often used to streamline the procurement of recurring services or supplies from an established vendor. If the underlying BPA was competitively awarded and well-structured, using a call can offer efficiency and potentially better pricing due to pre-negotiated terms. For foundational IT components, this can be effective if the needs are predictable and the scope aligns with the BPA. However, the effectiveness hinges on the initial competition for the BPA and whether the specific requirements of this call were fully anticipated and priced appropriately within that framework. It can reduce administrative burden compared to a new full and open competition for each individual need.

What is the historical spending trend for foundational IT components support within CMS?

Analyzing historical spending trends for similar IT foundational components support within CMS is crucial for context. This involves examining past contract awards for services related to system development, IT infrastructure, and custom programming over several fiscal years. Understanding whether spending in this area has been increasing, decreasing, or remaining stable can indicate evolving needs or budget priorities. Comparing the current $21.2 million award against this historical baseline helps determine if this represents a significant shift in investment or a continuation of established patterns. It also aids in forecasting future budgetary requirements for such services.

What are the implications of the Firm Fixed Price (FFP) contract type for this IT services award?

The Firm Fixed Price (FFP) contract type places the majority of the cost risk on the contractor, Flexion Inc. This means that the contractor is obligated to complete the work for the agreed-upon price, regardless of unforeseen cost increases. For the government, this provides significant cost certainty and predictability, which is highly desirable for budgeting. However, FFP contracts are best suited for requirements where the scope of work is clearly defined and unlikely to change significantly. If the scope for 'foundational components support' is ambiguous, the contractor may build in higher contingency costs, potentially leading to a less competitive initial price, or face challenges if scope changes are necessary.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming 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: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Flexion Inc.

Address: 1500 W MAIN ST STE 500, SUN PRAIRIE, WI, 53590

Business Categories: Category Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $36,849,177

Exercised Options: $21,219,929

Current Obligation: $21,219,929

Actual Outlays: $16,151,228

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: HHSM500201600010B

IDV Type: BPA

Timeline