HHS awards $11.5M for health IT system development and maintenance to SemanticBits LLC

Contract Overview

Contract Amount: $11,515,165 ($11.5M)

Contractor: Semanticbits LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2024-08-25

End Date: 2026-06-02

Contract Duration: 646 days

Daily Burn Rate: $17.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: BONNIE MAT 2 IS A CONTRACT THAT WILL FOCUSES ON THE DESIGN, DEVELOPMENT, ENHANCEMENT, AND MAINTAINENANCE OF THE BONNIE, MAT, AND MEASURE AUTHORING AND DEVELOPMENT INTEGRATED ENVIRONMENT (MADIE) SYSTEMS, ETC.

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $11.5 million to SEMANTICBITS LLC for work described as: BONNIE MAT 2 IS A CONTRACT THAT WILL FOCUSES ON THE DESIGN, DEVELOPMENT, ENHANCEMENT, AND MAINTAINENANCE OF THE BONNIE, MAT, AND MEASURE AUTHORING AND DEVELOPMENT INTEGRATED ENVIRONMENT (MADIE) SYSTEMS, ETC. Key points: 1. Contract focuses on critical health IT systems (BONNIE, MAT, MADIE) essential for healthcare program development. 2. The firm-fixed-price contract structure aims to control costs for the government. 3. Full and open competition suggests a potentially competitive bidding process. 4. The contract duration of 646 days indicates a medium-term project. 5. Virginia is the performance location, potentially impacting local IT workforce. 6. The contract is categorized under 'Other Computer Related Services', a broad IT service area.

Value Assessment

Rating: good

The contract value of $11.5 million for a 646-day period appears reasonable for the scope of IT system development and maintenance. Benchmarking against similar contracts for health IT system enhancement and support would provide a more precise value-for-money assessment. The firm-fixed-price structure is generally favorable for cost control when the scope is well-defined. Without specific performance metrics or detailed cost breakdowns, a definitive assessment of cost efficiency is challenging, but the overall value seems aligned with typical IT service contracts of this nature.

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 a bid. The number of bidders is not specified, but this procurement method generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. The agency's decision to use full and open competition suggests confidence in the market's ability to provide qualified vendors for these specialized IT services.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it maximizes the potential for cost savings through a wider range of bids and encourages vendors to offer competitive pricing to secure the contract.

Public Impact

The primary beneficiaries are the Centers for Medicare and Medicaid Services (CMS), which will receive enhanced and maintained IT systems crucial for their operations. Services delivered include the design, development, enhancement, and maintenance of the BONNIE, MAT, and MADIE systems. The geographic impact is primarily within Virginia, where the work will be performed, potentially creating or sustaining IT jobs in that region. The contract supports the development and authoring of healthcare measures and programs, indirectly benefiting healthcare providers and patients by improving the underlying systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in complex IT development projects if requirements are not meticulously managed.
Reliance on a single contractor for critical system maintenance could pose risks if performance issues arise.
The 'Other Computer Related Services' NAICS code is broad, and the specific technical expertise required needs to be closely monitored.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition suggests a robust market response and potential for competitive pricing.
The contract supports essential healthcare IT infrastructure, aligning with government priorities.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on software development and IT services. The market for health IT is substantial and growing, driven by the increasing digitization of healthcare and the need for efficient data management and program administration. Comparable spending benchmarks for IT system development and maintenance contracts within federal agencies, particularly those supporting large healthcare programs like CMS, would typically range from several million to tens of millions of dollars, depending on complexity and duration. This contract appears to be of moderate size within this context.

Small Business Impact

This contract was awarded under full and open competition and does not indicate any specific small business set-aside. Therefore, the direct impact on small businesses through set-asides is unlikely. However, the prime contractor, SemanticBits LLC, may engage small businesses as subcontractors to fulfill specific aspects of the contract, contributing to the broader small business ecosystem. Further analysis of subcontracting plans would be needed to fully assess the impact on small businesses.

Oversight & Accountability

Oversight for this contract will likely 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 contract type, which ties payment to deliverables. Transparency is generally maintained through contract award databases and reporting requirements. The Inspector General for the Department of Health and Human Services would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Health IT Modernization Programs
Healthcare Data Management Systems
Federal Software Development Contracts
Centers for Medicare and Medicaid Services IT Support

Risk Flags

Potential for technical debt if maintenance is not proactive.
Dependency on contractor expertise for critical systems.
Cybersecurity vulnerabilities in health IT systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $11.5 million to SEMANTICBITS LLC. BONNIE MAT 2 IS A CONTRACT THAT WILL FOCUSES ON THE DESIGN, DEVELOPMENT, ENHANCEMENT, AND MAINTAINENANCE OF THE BONNIE, MAT, AND MEASURE AUTHORING AND DEVELOPMENT INTEGRATED ENVIRONMENT (MADIE) SYSTEMS, ETC.

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 $11.5 million.

What is the period of performance?

Start: 2024-08-25. End: 2026-06-02.

What is the track record of SemanticBits LLC in delivering similar health IT systems for federal agencies?

SemanticBits LLC has a history of working with federal agencies on IT projects, including those related to healthcare. Their portfolio often includes software development, system integration, and IT support services. To assess their track record for this specific contract, a review of their past performance evaluations on similar contracts with CMS or other health-focused agencies would be necessary. This would involve examining client feedback, on-time delivery rates, adherence to budget, and the quality of technical solutions provided. A deeper dive into their experience with the BONNIE, MAT, and MADIE systems, or comparable complex healthcare IT environments, would offer further insight into their capability to successfully execute this $11.5 million contract.

How does the $11.5 million contract value compare to similar health IT system development and maintenance contracts?

The $11.5 million contract value for a period of approximately 22 months (from August 2024 to June 2026) translates to an average annual value of roughly $6.3 million. This figure is within the typical range for federal IT contracts focused on the development, enhancement, and maintenance of complex systems, especially within the healthcare sector where specialized expertise and robust infrastructure are required. For instance, contracts supporting large-scale health IT initiatives at agencies like the Department of Veterans Affairs or the National Institutes of Health can range from a few million to tens of millions annually. Without specific details on the complexity and scope of the BONNIE, MAT, and MADIE systems, a precise comparison is difficult, but the awarded amount appears to be a reasonable investment for maintaining and evolving critical healthcare IT infrastructure.

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

Key risks for this contract include potential technical challenges in developing and integrating complex health IT systems, the possibility of scope creep if requirements are not clearly defined and managed, and vendor performance issues. Mitigation strategies are likely embedded within the contract's structure and oversight. The firm-fixed-price nature of the contract incentivizes the contractor to manage costs effectively. The full and open competition process aims to select a vendor with a proven track record, reducing performance risk. CMS program managers will provide ongoing oversight, monitoring progress, managing scope changes through formal processes, and ensuring deliverables meet quality standards. Regular performance reviews and clear communication channels are crucial for proactive risk management.

How effective is the firm-fixed-price contract type in ensuring value for money for these IT services?

The firm-fixed-price (FFP) contract type is generally considered effective in ensuring value for money when the scope of work is well-defined and unlikely to change significantly. For IT system development and maintenance, FFP provides cost certainty to the government, as the contractor assumes the risk of cost overruns. This encourages the contractor to be efficient and manage resources effectively to maintain profitability. However, if the scope is not clearly delineated or if unforeseen technical complexities arise, an FFP contract could potentially lead to the contractor cutting corners on quality to meet the fixed price, or it might necessitate costly change orders. For this contract, the success of FFP in delivering value will depend on the clarity of the system requirements and the contractor's ability to execute within the defined parameters.

What are the historical spending patterns for similar IT services at the Centers for Medicare and Medicaid Services?

CMS historically spends significant amounts on IT services to support its vast array of healthcare programs. Their spending encompasses system development, maintenance, data analytics, cybersecurity, and cloud services. Annual IT expenditures for CMS often run into the hundreds of millions, if not billions, of dollars, reflecting the complexity and scale of their operations. Contracts for system development and maintenance, like the one awarded to SemanticBits LLC, are a recurring component of this spending. Analyzing past CMS IT budgets and contract awards for similar services would reveal trends in technology adoption, vendor choices, and average contract values, providing context for the $11.5 million award.

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: 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: $11,515,165

Exercised Options: $11,515,165

Current Obligation: $11,515,165

Actual Outlays: $9,803,377

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $1,014,136

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F192BA

IDV Type: FSS

Timeline