HHS awards $29.2M for application maintenance, highlighting a need for ongoing IT support in healthcare reporting

Contract Overview

Contract Amount: $29,224,229 ($29.2M)

Contractor: CGI Federal Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2022-07-01

End Date: 2027-03-31

Contract Duration: 1,734 days

Daily Burn Rate: $16.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: APPLICATION MAINTENANCE FOR PROVIDER STATISTICAL AND REPORTING SYSTEM & SYSTEM TRACKING FOR AUDIT AND REIMBURSEMENT SUB-SYSTEM. APPLICATION MAINTENANCE INCLUDES THE DESIGN AND DEVELOPMENT OF CHANGES TO THE APPLICATION FOR NEW/CHANGED FUNCTIONALIT

Place of Performance

Location: OWINGS MILLS, BALTIMORE County, MARYLAND, 21117

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $29.2 million to CGI FEDERAL INC. for work described as: APPLICATION MAINTENANCE FOR PROVIDER STATISTICAL AND REPORTING SYSTEM & SYSTEM TRACKING FOR AUDIT AND REIMBURSEMENT SUB-SYSTEM. APPLICATION MAINTENANCE INCLUDES THE DESIGN AND DEVELOPMENT OF CHANGES TO THE APPLICATION FOR NEW/CHANGED FUNCTIONALIT Key points: 1. Contract focuses on maintaining critical systems for provider statistical reporting and audit reimbursement. 2. The duration of the contract suggests a long-term need for these IT services. 3. Full and open competition was utilized, indicating a potentially competitive bidding process. 4. The contract type is Time and Materials, which can pose cost control challenges if not managed closely. 5. This award falls under 'Other Computer Related Services', a broad category within IT. 6. The primary contractor, CGI Federal Inc., has a significant presence in the federal IT space.

Value Assessment

Rating: fair

The contract value of $29.2 million over approximately 4.8 years (1734 days) for application maintenance is within a typical range for large-scale federal IT support. However, without specific details on the scope of work and the complexity of the systems involved, a precise value-for-money assessment is difficult. The Time and Materials pricing model necessitates careful monitoring to ensure costs remain aligned with the effort expended and do not escalate beyond reasonable benchmarks for similar application maintenance services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. This approach is generally favored for maximizing competition and potentially achieving better pricing. The number of bidders is not specified, but the use of this procurement method implies a deliberate effort to solicit a wide range of offers.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages a competitive environment, which can lead to more cost-effective solutions and a wider pool of innovative service providers.

Public Impact

Beneficiaries include healthcare providers who rely on accurate reporting systems for reimbursement. The services delivered are crucial for the operational efficiency of the Centers for Medicare and Medicaid Services (CMS). The geographic impact is national, affecting healthcare providers across the United States. Workforce implications include the need for skilled IT professionals to maintain and update complex healthcare systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials contract type can lead to cost overruns if not closely managed.
The broad 'Other Computer Related Services' NAICS code may obscure the specific nature of the IT work.
Long contract duration requires sustained oversight to ensure continued relevance and performance.

Positive Signals

Awarded under full and open competition, suggesting a robust selection process.
The contract addresses essential functions for healthcare provider reporting and reimbursement.
The contractor, CGI Federal Inc., is an established entity in the federal IT services market.

Sector Analysis

This contract falls within the broader Information Technology sector, specifically under 'Other Computer Related Services'. The federal IT market is substantial, with significant spending allocated to application maintenance, development, and support. This contract represents a portion of the Department of Health and Human Services' investment in maintaining its critical infrastructure, ensuring the smooth operation of programs like Medicare and Medicaid. Comparable spending benchmarks for similar application maintenance contracts within federal agencies often range from millions to tens of millions of dollars annually, depending on system complexity and user base.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside requirement. The primary contractor, CGI Federal Inc., is a large business, and any subcontracting opportunities would be at their discretion, not mandated by a small business set-aside provision.

Oversight & Accountability

Oversight for this contract would primarily reside with the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. Accountability measures are typically embedded within the contract's performance work statement, including service level agreements and deliverable requirements. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected or identified within the contract's execution.

Related Government Programs

CMS Provider Enrollment, Chain, and Ownership System (PECOS)
Medicare Provider and Beneficiary Information Systems
Healthcare.gov IT Infrastructure Support
Federal Health IT Modernization Programs

Risk Flags

Potential for cost escalation due to Time and Materials pricing.
Risk of technological obsolescence over the contract's long duration.
Need for strong contract management to ensure performance and value.
Dependency on a single large contractor for critical systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $29.2 million to CGI FEDERAL INC.. APPLICATION MAINTENANCE FOR PROVIDER STATISTICAL AND REPORTING SYSTEM & SYSTEM TRACKING FOR AUDIT AND REIMBURSEMENT SUB-SYSTEM. APPLICATION MAINTENANCE INCLUDES THE DESIGN AND DEVELOPMENT OF CHANGES TO THE APPLICATION FOR NEW/CHANGED FUNCTIONALIT

Who is the contractor on this award?

The obligated recipient is CGI FEDERAL 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 $29.2 million.

What is the period of performance?

Start: 2022-07-01. End: 2027-03-31.

What is the specific scope of 'application maintenance' for the Provider Statistical and Reporting System and the System Tracking for Audit and Reimbursement Sub-system?

The scope of 'application maintenance' for the Provider Statistical and Reporting System and the System Tracking for Audit and Reimbursement Sub-system encompasses the design and development of changes to these applications. This includes adapting the systems for new or changed functional requirements, addressing bugs, and ensuring the systems remain operational and compliant with evolving regulations. Given the critical nature of provider reporting and audit reimbursement for CMS, this maintenance likely involves regular updates to data fields, reporting formats, security protocols, and integration points with other federal systems. The 'System Tracking for Audit and Reimbursement Sub-system' specifically suggests a focus on ensuring accurate financial data and supporting the audit processes related to healthcare provider payments.

How does the Time and Materials (T&M) pricing structure compare to fixed-price or cost-plus models for similar federal IT maintenance contracts?

Time and Materials (T&M) contracts are often used when the scope of work is not clearly defined or is expected to change frequently, which can be the case with application maintenance. Unlike fixed-price contracts, where the total cost is predetermined, T&M contracts reimburse the contractor for direct labor hours at specified hourly rates and for the actual cost of materials. This offers flexibility but carries a higher risk of cost overruns for the government if not managed diligently. Cost-plus contracts, on the other hand, reimburse the contractor for allowable costs plus a fee (profit). For federal IT maintenance, T&M can be suitable for emergent needs or ongoing support where precise effort is hard to estimate upfront. However, agencies often prefer fixed-price elements or strong ceiling prices within T&M contracts to control costs and ensure value for money, especially for longer durations.

What are the potential risks associated with a long-duration contract (1734 days) for application maintenance?

Long-duration contracts for application maintenance, like this 1734-day award, present several potential risks. Firstly, technological obsolescence is a significant concern; the systems being maintained might become outdated, or the technologies used to maintain them could evolve, requiring costly upgrades or replacements. Secondly, vendor lock-in can occur, making it difficult and expensive to switch providers later. Thirdly, maintaining consistent performance and quality over an extended period requires robust oversight and contract management to prevent degradation of service. Finally, the initial cost estimates might not accurately reflect the total lifecycle costs if unforeseen issues or scope expansions arise, potentially leading to budget overruns. Regular reviews and performance assessments are crucial to mitigate these risks.

What is CGI Federal Inc.'s track record with similar IT maintenance contracts within HHS or other federal agencies?

CGI Federal Inc. is a well-established contractor with a substantial history of providing IT services to various U.S. federal agencies, including the Department of Health and Human Services (HHS). They have experience with large-scale system modernization, application development, and ongoing maintenance for complex government IT infrastructures. Their portfolio often includes work on health IT systems, financial management systems, and citizen-facing portals. While specific details on past performance for identical systems are not provided in this summary, CGI's general track record suggests they possess the capacity and experience to handle significant IT maintenance efforts. Agencies typically evaluate past performance data, including CPARS reports, when making award decisions for such contracts.

How does the spending on this contract compare to overall federal IT spending or spending within HHS for similar services?

The $29.2 million awarded over approximately 4.8 years represents an average annual spend of roughly $6.1 million for application maintenance. This figure needs to be contextualized within the broader federal IT landscape. Total federal IT spending typically runs into the tens of billions of dollars annually. Within HHS, which is one of the largest federal agencies, IT spending is also substantial, often in the billions, covering a wide array of systems supporting healthcare, human services, and research. This specific contract, while significant for the systems it supports, represents a relatively small fraction of overall HHS or federal IT expenditures. It is comparable to other large-scale application maintenance or support contracts awarded to major IT service providers for critical government systems.

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 › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Timken Company

Address: 12601 FAIR LAKES CIR # 100, FAIRFAX, VA, 22033

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

Financial Breakdown

Contract Ceiling: $31,288,032

Exercised Options: $29,224,229

Current Obligation: $29,224,229

Actual Outlays: $21,841,221

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F281DA

IDV Type: FSS

Timeline