HHS awards $4.45M for ERP software to Systems Intelligence, LLC, bypassing competition

Contract Overview

Contract Amount: $4,444,998 ($4.4M)

Contractor: Systems Intelligence, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2023-09-22

End Date: 2027-04-30

Contract Duration: 1,316 days

Daily Burn Rate: $3.4K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ENTERPRISE RESOURCING PLANNING (ERP) SOFTWARE FOR NSSC WAREHOUSE.

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73114

State: Oklahoma Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $4.4 million to SYSTEMS INTELLIGENCE, LLC for work described as: ENTERPRISE RESOURCING PLANNING (ERP) SOFTWARE FOR NSSC WAREHOUSE. Key points: 1. The contract's value appears reasonable for enterprise resource planning software, though a direct comparison is difficult without more specific feature data. 2. The sole-source award limits opportunities for competitive pricing and potentially higher value for taxpayers. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. The duration of the contract (over 3 years) suggests a significant implementation and integration effort. 5. The software is intended for warehouse management, indicating a focus on supply chain efficiency within the NSSC. 6. The lack of competition raises questions about whether the government secured the best possible price and solution.

Value Assessment

Rating: fair

The $4.45 million award for Enterprise Resource Planning (ERP) software for warehouse management is difficult to benchmark without detailed feature comparisons. However, ERP systems can range significantly in price based on complexity and vendor. The firm fixed-price nature of the contract provides cost certainty. Given the sole-source nature, it's challenging to assess if this represents optimal value compared to a competitive procurement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the Simplified Acquisition Procedures (SAP) and was awarded on a sole-source basis. This means only one vendor, Systems Intelligence, LLC, was solicited. The lack of competition limits the government's ability to explore alternative solutions and potentially negotiate a lower price through a bidding process. It suggests that either the agency identified a unique capability or there were specific circumstances justifying a sole-source award.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the price reductions and innovation that can arise from a competitive bidding environment. This could result in a higher overall cost for the software and services.

Public Impact

The National Supply Chain Center (NSSC) will benefit from improved warehouse management capabilities. The software aims to enhance operational efficiency and data management within the NSSC's supply chain. The geographic impact is primarily within the NSSC's operational facilities, likely in Oklahoma. The contract may have implications for IT professionals involved in software implementation and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source award raises concerns about the thoroughness of market research and potential for better value.
The specific functionalities and long-term support costs of the chosen ERP software are not detailed, posing a potential risk.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
The award is for a critical function (ERP for warehouse management) that could improve operational efficiency.
The contract duration allows for comprehensive implementation and integration.

Sector Analysis

The Enterprise Resource Planning (ERP) software market is a significant segment of the software industry, serving organizations across all sectors. This contract falls within the 'Software Publishers' industry (NAICS 513210). Spending on ERP systems can vary widely, from tens of thousands for smaller deployments to millions for large-scale enterprise solutions. This particular award of $4.45 million is substantial and indicates a comprehensive solution for warehouse management within a federal agency.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. Therefore, this award is unlikely to have a direct positive impact on the small business ecosystem. The focus appears to be on acquiring a specific ERP solution rather than leveraging small business capabilities.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services' internal financial and procurement oversight mechanisms. The Office of the Assistant Secretary for Financial Resources is involved, suggesting financial scrutiny. Transparency is limited due to the sole-source nature, but contract details should be available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Federal Supply Schedule (FSS) IT contracts
Department of Defense ERP Modernization Program
General Services Administration (GSA) IT Schedule
Health Information Technology Contracts

Risk Flags

Sole-source award lacks competitive justification.
Potential for inflated pricing due to lack of competition.
Limited transparency on specific software features and capabilities.
No clear performance metrics provided in summary data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $4.4 million to SYSTEMS INTELLIGENCE, LLC. ENTERPRISE RESOURCING PLANNING (ERP) SOFTWARE FOR NSSC WAREHOUSE.

Who is the contractor on this award?

The obligated recipient is SYSTEMS INTELLIGENCE, LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Office of the Assistant Secretary for Financial Resources).

What is the total obligated amount?

The obligated amount is $4.4 million.

What is the period of performance?

Start: 2023-09-22. End: 2027-04-30.

What is the specific ERP software being procured and what are its key features for warehouse management?

The provided data does not specify the exact ERP software product being procured from Systems Intelligence, LLC. It is identified broadly as 'ENTERPRISE RESOURCING PLANNING (ERP) SOFTWARE FOR NSSC WAREHOUSE.' Key features would typically include inventory management, order fulfillment, logistics coordination, demand forecasting, and potentially integration with other supply chain systems. Without the specific product name or a detailed statement of work, a precise feature analysis is not possible. However, given the context of warehouse management, functionalities likely focus on optimizing storage, tracking goods, managing stock levels, and streamlining the movement of materials within the NSSC's facilities.

How does the $4.45 million cost compare to similar ERP software procurements for federal agencies of comparable size?

Benchmarking the $4.45 million cost for this ERP software is challenging without knowing the specific software product, its modules, and the level of customization required. Federal ERP implementations can vary dramatically in cost. Large-scale, agency-wide ERP systems (like those for financial management or human resources) often run into hundreds of millions of dollars. However, for a specific function like warehouse management within a particular center (NSSC), $4.45 million over approximately 3.5 years (from Sept 2023 to April 2027) might be within a reasonable range, especially if it involves significant integration and data migration. The sole-source nature, however, prevents a direct comparison to competitively bid solutions which might offer a lower price point.

What are the primary risks associated with a sole-source award for critical software like ERP?

The primary risks associated with a sole-source award for critical software like ERP include: 1. **Higher Cost:** Without competition, the government may pay a premium compared to what could be achieved through a bidding process. 2. **Limited Solution Options:** The agency might not be exposed to potentially superior or more cost-effective solutions available from other vendors. 3. **Vendor Lock-in:** The agency becomes dependent on a single vendor, potentially leading to challenges if the vendor's product strategy changes or if support becomes inadequate. 4. **Reduced Innovation:** The lack of competitive pressure can lessen the incentive for the awarded vendor to innovate or offer significant improvements post-award. 5. **Perception of Unfairness:** Sole-source awards can sometimes lead to perceptions of favoritism or a lack of due diligence, even if justified.

What is the expected impact of this ERP software on the NSSC's warehouse operations and supply chain efficiency?

The implementation of this Enterprise Resource Planning (ERP) software is expected to significantly enhance the National Supply Chain Center's (NSSC) warehouse operations and overall supply chain efficiency. By providing a centralized system for managing inventory, tracking goods, and coordinating logistics, the software should lead to more accurate stock levels, reduced errors in order fulfillment, and optimized storage utilization. This improved visibility and control over warehouse activities can translate into faster processing times, lower operational costs, and better responsiveness to demand. Ultimately, the goal is to create a more streamlined, data-driven, and efficient supply chain for the NSSC.

What is Systems Intelligence, LLC's track record with federal ERP software contracts, particularly sole-source awards?

Information regarding Systems Intelligence, LLC's specific track record with federal ERP software contracts, especially sole-source awards, is not detailed in the provided data. To assess their capabilities and past performance, one would need to consult federal procurement databases (like SAM.gov or FPDS) for previous contract awards, performance reviews, and any reported issues. Understanding their experience with similar-sized projects, their success rate in implementing ERP systems, and their history with sole-source procurements would be crucial for evaluating the risk and potential success of this particular contract.

Are there any specific performance metrics or Key Performance Indicators (KPIs) defined in the contract to measure the success of the ERP software?

The provided data does not include details about specific performance metrics or Key Performance Indicators (KPIs) established within the contract to measure the success of the ERP software. Typically, for such a significant IT investment, a contract would outline measurable objectives related to inventory accuracy, order fulfillment times, system uptime, user adoption rates, and cost savings. The absence of this information in the summary data suggests that these details might be found in the full contract documentation or statement of work. Without defined KPIs, objectively assessing the value and effectiveness of the procured software post-implementation becomes more challenging.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: IT AND TELECOM - IT MANAGEMENT

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2553 DULLES VIEW DR, HERNDON, VA, 20171

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $4,444,998

Exercised Options: $4,444,998

Current Obligation: $4,444,998

Actual Outlays: $1,742,499

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline