HHS Awards $94.6M Contract for Fraud Prevention System 2 to Peraton Inc
Contract Overview
Contract Amount: $94,654,486 ($94.7M)
Contractor: Peraton Inc.
Awarding Agency: Department of Health and Human Services
Start Date: 2022-06-15
End Date: 2026-06-14
Contract Duration: 1,460 days
Daily Burn Rate: $64.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: TIME AND MATERIALS
Sector: IT
Official Description: FRAUD PREVENTION SYSTEM 2 (FPS2)
Place of Performance
Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244
State: Maryland Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $94.7 million to PERATON INC. for work described as: FRAUD PREVENTION SYSTEM 2 (FPS2) Key points: 1. Contract Value: $94.6 million over 4 years. 2. Contractor: Peraton Inc., a significant player in government IT services. 3. Risk: Potential for cost overruns with Time and Materials pricing. 4. Sector: Health IT, focusing on custom computer programming.
Value Assessment
Rating: fair
The Time and Materials pricing structure presents a risk for cost control. Benchmarking against similar custom programming contracts is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the Time and Materials (T&M) pricing may limit price discovery compared to fixed-price contracts.
Taxpayer Impact: Taxpayer funds are being used for a critical system to combat healthcare fraud, aiming for long-term savings.
Public Impact
Enhances Medicare and Medicaid fraud detection capabilities. Supports the Centers for Medicare and Medicaid Services (CMS) mission. Potential for improved efficiency in healthcare program integrity.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Time and Materials pricing
- Lack of detailed cost breakdown for benchmarking
Positive Signals
- Full and open competition
- Critical function for fraud prevention
Sector Analysis
This contract falls within the Health IT sector, specifically custom computer programming services for government agencies. Spending in this area is substantial, driven by the need for advanced data analytics and system modernization.
Small Business Impact
The contract was awarded to Peraton Inc. and does not indicate any specific set-asides or subcontracting requirements for small businesses in the provided data.
Oversight & Accountability
Oversight will be crucial to manage the Time and Materials contract effectively and ensure the system meets its fraud prevention objectives within budget.
Related Government Programs
- Custom Computer Programming Services
- Department of Health and Human Services Contracting
- Centers for Medicare and Medicaid Services Programs
Risk Flags
- Cost control risks due to T&M pricing
- Potential for scope creep
- Dependence on contractor performance
- Cybersecurity vulnerabilities
Tags
custom-computer-programming-services, department-of-health-and-human-services, md, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $94.7 million to PERATON INC.. FRAUD PREVENTION SYSTEM 2 (FPS2)
Who is the contractor on this award?
The obligated recipient is PERATON 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 $94.7 million.
What is the period of performance?
Start: 2022-06-15. End: 2026-06-14.
What is the projected return on investment for the FPS2 system in terms of fraud reduction?
The provided data does not specify the projected return on investment or quantifiable fraud reduction targets for the FPS2 system. Further analysis would require access to the system's performance metrics and the agency's fraud loss estimates.
How does Peraton Inc.'s past performance on similar contracts influence the risk assessment for FPS2?
Past performance data for Peraton Inc. on similar government contracts is not included here. A comprehensive risk assessment would necessitate reviewing their track record, particularly regarding cost control and delivery timelines on complex IT projects.
Are there specific performance metrics or KPIs tied to this contract to measure its effectiveness?
The data does not detail specific performance metrics or Key Performance Indicators (KPIs) for the FPS2 contract. Effective oversight would require clearly defined metrics to ensure the system is achieving its intended fraud prevention goals.
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 › IT AND TELECOM - APLLICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 3
Pricing Type: TIME AND MATERIALS (Y)
Evaluated Preference: NONE
Contractor Details
Address: 12975 WORLDGATE DR, HERNDON, VA, 20170
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $117,327,112
Exercised Options: $94,654,486
Current Obligation: $94,654,486
Actual Outlays: $81,898,421
Subaward Activity
Number of Subawards: 27
Total Subaward Amount: $36,837,503
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: GS35F694GA
IDV Type: FSS
Timeline
Start Date: 2022-06-15
Current End Date: 2026-06-14
Potential End Date: 2027-06-14 00:00:00
Last Modified: 2025-09-16
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