HHS awards $33.8M for CMS contract writing system modernization, aiming for agile development

Contract Overview

Contract Amount: $33,845,356 ($33.8M)

Contractor: Humanit Solutions LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2023-05-19

End Date: 2026-05-12

Contract Duration: 1,089 days

Daily Burn Rate: $31.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: REPLACING ITS LEGACY CONTRACT WRITING SYSTEM VIA THE CMS CALM EFFORT. OAGM REQUIRES CONTRACTOR SUPPORT TO DEVELOP THE CALM SYSTEM USING MODERN DIGITAL PRODUCT TEAMS THAT ARE WELL-VERSED IN INDUSTRY STANDARD SOFTWARE ARCHITECTURE AND DEVELOPMENT PRACT

Place of Performance

Location: DAYTON, MONTGOMERY County, OHIO, 45431

State: Ohio Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $33.8 million to HUMANIT SOLUTIONS LLC for work described as: REPLACING ITS LEGACY CONTRACT WRITING SYSTEM VIA THE CMS CALM EFFORT. OAGM REQUIRES CONTRACTOR SUPPORT TO DEVELOP THE CALM SYSTEM USING MODERN DIGITAL PRODUCT TEAMS THAT ARE WELL-VERSED IN INDUSTRY STANDARD SOFTWARE ARCHITECTURE AND DEVELOPMENT PRACT Key points: 1. Contract focuses on modernizing the Contract Lifecycle Management (CLM) system for CMS. 2. Emphasizes use of modern digital product teams and industry-standard software architecture. 3. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle. 4. Firm Fixed Price contract type suggests defined scope and predictable costs. 5. The duration of over 3 years indicates a significant, long-term development effort. 6. Contracting activity is located in Ohio, potentially impacting local IT workforce.

Value Assessment

Rating: good

The award amount of $33.8 million for custom computer programming services appears reasonable for a multi-year system modernization effort. Benchmarking against similar large-scale federal IT system development projects suggests this is within expected cost ranges. The firm fixed-price structure, if well-defined, can offer good value by capping costs for the government. However, without detailed scope and deliverables, 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 multiple vendors had the opportunity to bid. The presence of 4 bids suggests a healthy level of interest and competition for this significant IT modernization project. This competitive environment is generally favorable for price discovery and ensuring the government receives competitive proposals.

Taxpayer Impact: Full and open competition typically leads to better pricing for taxpayers by fostering a competitive bidding environment. It ensures that the government explores a wide range of solutions and pricing structures.

Public Impact

Benefits CMS by providing a modernized, efficient contract writing system. Services delivered include software development and system architecture using agile methodologies. Geographic impact is primarily within the Centers for Medicare and Medicaid Services operations, with potential for remote work impacting a national IT workforce. Workforce implications include the need for skilled software developers and product managers familiar with modern digital practices.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in long-term software development projects.
Reliance on specific vendor expertise could create future lock-in.
Ensuring successful integration with existing CMS systems requires careful management.

Positive Signals

Focus on modern software architecture and agile development practices.
Awarded through full and open competition, indicating broad market engagement.
Firm Fixed Price contract type provides cost certainty.

Sector Analysis

This contract falls within the Custom Computer Programming Services sector, a critical component of the broader IT services market. The federal government is a significant consumer of these services, particularly for modernizing legacy systems and developing new digital platforms. The market is characterized by a mix of large system integrators and specialized software development firms. The $33.8 million award is substantial, reflecting the complexity and strategic importance of modernizing a core operational system like contract writing.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large contract for system modernization, it is likely that the prime contractor is a larger entity, potentially subcontracting portions of the work. Analysis of subcontracting plans would be necessary to determine the extent of small business participation, but the initial award does not suggest a direct small business set-aside.

Oversight & Accountability

Oversight for this contract will likely be managed by the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. The firm fixed-price nature of the contract provides a degree of cost control. Transparency will depend on CMS's reporting practices and the availability of contract performance data. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

CMS Contract Lifecycle Management (CLM) Systems
Federal IT Modernization Initiatives
Custom Software Development Services
Agile Development Contracts
Health IT Infrastructure

Risk Flags

Potential for schedule slippage
Risk of cost overruns if scope is not managed
User adoption challenges
Integration complexity with legacy systems
Data security and privacy concerns

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $33.8 million to HUMANIT SOLUTIONS LLC. REPLACING ITS LEGACY CONTRACT WRITING SYSTEM VIA THE CMS CALM EFFORT. OAGM REQUIRES CONTRACTOR SUPPORT TO DEVELOP THE CALM SYSTEM USING MODERN DIGITAL PRODUCT TEAMS THAT ARE WELL-VERSED IN INDUSTRY STANDARD SOFTWARE ARCHITECTURE AND DEVELOPMENT PRACT

Who is the contractor on this award?

The obligated recipient is HUMANIT SOLUTIONS 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 $33.8 million.

What is the period of performance?

Start: 2023-05-19. End: 2026-05-12.

What is the track record of HUMANIT SOLUTIONS LLC in delivering large-scale federal IT modernization projects?

HUMANIT SOLUTIONS LLC is the prime contractor for this $33.8 million award. A comprehensive review of their past performance, particularly on contracts with similar scope, complexity, and value, is crucial. This would involve examining past project outcomes, client satisfaction, adherence to schedule and budget, and any documented performance issues or successes. Federal procurement databases and past performance questionnaires can provide insights. Understanding their experience with agile methodologies and government systems modernization is key to assessing their capability to successfully deliver the CALM system.

How does the $33.8 million award compare to the cost of similar federal contract writing system modernization efforts?

Benchmarking this $33.8 million award requires comparing it to the total contract values and durations of other federal agencies that have undertaken similar contract writing system (CWS) or contract lifecycle management (CLM) modernization projects. For instance, the Department of Defense or other large civilian agencies might have undertaken comparable initiatives. Factors like the number of users, the complexity of existing workflows, the scope of modernization (e.g., full replacement vs. incremental upgrades), and the chosen technology stack will influence costs. A preliminary assessment suggests the amount is substantial, reflecting the significant undertaking of replacing a legacy system with modern digital product teams.

What are the primary risks associated with modernizing a critical system like CMS's contract writing system?

Key risks include technical challenges in migrating data and integrating the new system with existing infrastructure, potential for schedule delays due to the complexity of agile development and unforeseen issues, and the risk of user adoption challenges if the new system is not intuitive or if adequate training is not provided. There's also a risk of cost overruns if the scope is not tightly managed, despite the firm fixed-price structure. Ensuring the security and integrity of sensitive contracting data throughout the modernization process is paramount. Finally, vendor performance and the availability of skilled personnel are ongoing risks.

How effective are modern digital product teams and agile development in delivering complex government IT systems compared to traditional methods?

Modern digital product teams and agile development are generally considered more effective for complex IT systems because they allow for iterative development, continuous feedback, and adaptability to changing requirements. This contrasts with traditional waterfall methods, which can be rigid and lead to significant issues discovered late in the project lifecycle. Agile allows for faster delivery of functional components and better alignment with user needs. However, successful implementation requires strong leadership, a culture shift within the agency, and skilled teams. For a system like CMS's CALM effort, agile promises greater flexibility and a higher likelihood of delivering a system that meets evolving operational demands.

What are the historical spending patterns for contract writing system development and maintenance within CMS or HHS?

Analyzing historical spending on CMS's legacy contract writing system and any previous modernization attempts would provide context. This includes understanding the annual maintenance costs, the total investment over the system's lifespan, and the costs associated with any prior failed or partial modernization efforts. Comparing these historical figures to the current $33.8 million award helps determine if this investment represents a significant increase, a more efficient approach, or a necessary catch-up expenditure. Understanding past spending can highlight inefficiencies or successful strategies that inform the current project's budget and scope.

What specific metrics will be used to measure the success and value of the CALM system modernization?

Success metrics for the CALM system modernization should focus on quantifiable improvements. These could include reduction in contract processing times, decrease in contract errors, improved user satisfaction scores from contracting personnel, increased system uptime and reliability, and enhanced data analytics capabilities for contract oversight. Measuring the return on investment (ROI) by comparing the total cost of the modernization project against the projected savings in administrative overhead, reduced risk, and improved efficiency over the system's lifecycle will be critical. The contract itself should ideally outline key performance indicators (KPIs) tied to these objectives.

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: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3182 RODENBECK DR STE A, BEAVERCREEK, OH, 45432

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

Financial Breakdown

Contract Ceiling: $40,155,903

Exercised Options: $33,845,356

Current Obligation: $33,845,356

Actual Outlays: $33,845,356

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $4,887,060

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: 47QTCA18D001B

IDV Type: FSS

Timeline