HHS awards $8.4M for IT systems management, with Flexion Inc. as prime contractor

Contract Overview

Contract Amount: $8,418,350 ($8.4M)

Contractor: Flexion Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2025-03-20

End Date: 2026-09-19

Contract Duration: 548 days

Daily Burn Rate: $15.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THE INFORMATION SYSTEMS GROUP (ISG) MANAGES MULTIPLE IT SYSTEMS WITHIN EACH OF ITS LOB. THESE IT SYSTEMS FACILITATE THE COLLECTION AND MANAGEMENT OF PROVIDER INFORMATION, PATIENT DEMOGRAPHIC DATA, CLINICAL DATA ELEMENTS, SURVEY INFORMATION, AND PRO

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $8.4 million to FLEXION INC for work described as: THE INFORMATION SYSTEMS GROUP (ISG) MANAGES MULTIPLE IT SYSTEMS WITHIN EACH OF ITS LOB. THESE IT SYSTEMS FACILITATE THE COLLECTION AND MANAGEMENT OF PROVIDER INFORMATION, PATIENT DEMOGRAPHIC DATA, CLINICAL DATA ELEMENTS, SURVEY INFORMATION, AND PRO Key points: 1. Contract value of $8.4M over 548 days suggests a moderate investment in IT system management. 2. The contract is a delivery order under a larger contract, indicating potential for follow-on work. 3. Custom Computer Programming Services (NAICS 541511) is a common category for IT support. 4. The firm fixed-price contract type shifts cost risk to the contractor. 5. The contract duration of 548 days allows for sustained IT system support. 6. The award was made to a single contractor, Flexion Inc., for this specific delivery order.

Value Assessment

Rating: good

The contract value of $8.4 million for approximately 1.5 years of IT systems management appears reasonable given the scope of managing multiple IT systems for data collection and management within the Centers for Medicare and Medicaid Services (CMS). Benchmarking against similar custom computer programming services contracts within HHS would provide a more precise value-for-money assessment. The firm fixed-price nature of the contract is generally favorable for the government in controlling costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but the full and open competition generally fosters a competitive environment that can lead to better pricing and service offerings for the government. This approach allows the agency to select the most capable and cost-effective solution from the widest possible pool of offerors.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it maximizes the potential for competitive pricing and encourages a wider range of innovative solutions, ultimately leading to better value for public funds.

Public Impact

The primary beneficiaries are the Centers for Medicare and Medicaid Services (CMS) and its Information Systems Group (ISG), who will receive support for critical IT systems. Services delivered include the management of IT systems that facilitate the collection and management of provider information, patient demographic data, clinical data elements, and survey information. The geographic impact is primarily within the agency's operations, likely supporting national-level data management functions. Workforce implications may include the need for skilled IT professionals to manage and maintain these complex systems, both within the contractor's organization and potentially within CMS.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics in the provided data makes it difficult to assess the quality of services delivered.
The duration of the contract (548 days) might be insufficient for long-term strategic IT system development or major overhauls, focusing more on ongoing management.

Positive Signals

The contract is firm fixed-price, which provides cost certainty for the government.
Awarded under full and open competition, indicating a potentially competitive bidding process.
The contractor, Flexion Inc., is managing IT systems crucial for data collection and management within CMS.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically in custom computer programming services. The market for IT services supporting government agencies is substantial, with significant spending allocated to maintaining and upgrading complex systems. Comparable spending benchmarks would involve analyzing other contracts for IT system management and custom programming within federal health agencies, which often require robust data handling and security capabilities.

Small Business Impact

The provided data indicates that small business set-asides were not utilized for this contract (ss: false, sb: false). This means the contract was not specifically reserved for small businesses. Consequently, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. However, the prime contractor, Flexion Inc., may still choose to engage small businesses as subcontractors, which would depend on their own business practices and the specific needs of the contract.

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 contract type, requiring the contractor to deliver specified services within budget. Transparency is facilitated through contract award databases, though detailed performance reports may not always be publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

CMS IT Modernization
Healthcare Data Management Systems
Federal Health IT Services
Custom Software Development Contracts
Provider and Patient Data Systems

Risk Flags

Potential for scope creep if system requirements evolve significantly during the contract period.
Reliance on a single contractor for critical IT system management functions.
Need for robust performance monitoring to ensure service quality and data integrity.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $8.4 million to FLEXION INC. THE INFORMATION SYSTEMS GROUP (ISG) MANAGES MULTIPLE IT SYSTEMS WITHIN EACH OF ITS LOB. THESE IT SYSTEMS FACILITATE THE COLLECTION AND MANAGEMENT OF PROVIDER INFORMATION, PATIENT DEMOGRAPHIC DATA, CLINICAL DATA ELEMENTS, SURVEY INFORMATION, AND PRO

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 $8.4 million.

What is the period of performance?

Start: 2025-03-20. End: 2026-09-19.

What is the track record of Flexion Inc. in managing similar federal IT contracts, particularly within the healthcare sector?

Assessing Flexion Inc.'s track record requires a deeper dive into their past performance on federal contracts. Specifically, examining previous awards, contract values, and client agencies within the Department of Health and Human Services (HHS) or other healthcare-related federal bodies would be crucial. Key indicators include successful completion of similar IT system management tasks, adherence to schedules and budgets, and positive past performance reviews. Information from sources like the Federal Procurement Data System (FPDS) or contractor performance databases can shed light on their experience with custom computer programming, data management, and system integration. A history of consistent performance and positive feedback would suggest a lower risk for this current contract, while a pattern of issues could raise concerns about their capability to meet CMS's needs effectively.

How does the awarded amount of $8.4 million compare to the typical cost of similar IT system management contracts within CMS or other federal health agencies?

To benchmark the $8.4 million award, one would need to analyze comparable contracts for custom computer programming services (NAICS 541511) awarded by CMS or similar agencies like the National Institutes of Health (NIH) or the Food and Drug Administration (FDA). Factors such as contract duration (548 days), scope of services (managing multiple IT systems for data collection and management), and contract type (firm fixed-price) are critical for a fair comparison. If similar contracts of comparable scope and duration typically range from $5 million to $10 million, then this award appears to be within a reasonable market range. Conversely, if comparable services are consistently procured for significantly less, it might indicate potential overpricing or a scope difference. The specific complexity and criticality of the IT systems managed by ISG would also influence the cost.

What are the primary risks associated with this contract, and what mitigation strategies are likely in place?

Primary risks for this contract include potential performance issues where Flexion Inc. may not adequately manage the IT systems, leading to data integrity problems or system downtime. Another risk is cost overruns if the firm fixed-price contract doesn't fully account for unforeseen technical challenges, although this risk is primarily borne by the contractor. Schedule delays could also occur, impacting the timely availability of critical data. Mitigation strategies likely involve robust contract oversight by CMS, including regular performance reviews, defined service level agreements (SLAs), and clear communication channels. The firm fixed-price structure itself acts as a cost mitigation tool for the government. Furthermore, the full and open competition process aims to select a contractor with a proven ability to manage such systems, reducing performance risk.

How effective is the firm fixed-price contract type in ensuring value for money for this specific IT system management requirement?

The firm fixed-price (FFP) contract type is generally effective in ensuring value for money for IT system management when the scope of work is well-defined and stable. For this contract, which involves managing existing IT systems for data collection and management, the scope is likely understood, making FFP a suitable choice. It shifts the risk of cost overruns to the contractor, Flexion Inc., incentivizing them to manage resources efficiently and control costs. This provides budget certainty for the government. However, if unforeseen technical complexities arise that significantly alter the effort required, the contractor might be disincentivized from addressing them fully without additional negotiation, potentially impacting service quality. The effectiveness hinges on the accuracy of the initial scope definition and the contractor's ability to execute within that defined framework.

What are the historical spending patterns for IT system management services within the Information Systems Group (ISG) of CMS?

Analyzing historical spending patterns for IT system management within CMS's ISG is crucial for contextualizing this $8.4 million award. This would involve examining prior contract awards for similar services over the past several fiscal years. Key data points to look for include the total annual or multi-year spending on IT system management, the average contract value, the number of contracts awarded, and the primary contractors involved. Understanding these patterns can reveal trends in IT investment, identify periods of increased or decreased spending, and highlight any shifts in contracting strategies (e.g., from sole-source to competitive awards). If historical spending has been consistently in the millions for similar services, this $8.4 million award might represent a continuation of established investment levels. Conversely, a significant deviation could warrant further investigation into the reasons behind the change.

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

Solicitation ID: 75FCMC25RJ005

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Flexion Inc.

Address: 811 E WASHINGTON AVE, MADISON, WI, 53703

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

Financial Breakdown

Contract Ceiling: $11,076,224

Exercised Options: $10,190,266

Current Obligation: $8,418,350

Actual Outlays: $5,117,044

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F523BA

IDV Type: FSS

Timeline