HHS awards $95.3M for computer systems design, exceeding benchmark by 52% for 5-year contract

Contract Overview

Contract Amount: $95,338,355 ($95.3M)

Contractor: ICF Incorporated, L.L.C.

Awarding Agency: Department of Health and Human Services

Start Date: 2020-09-25

End Date: 2025-09-24

Contract Duration: 1,825 days

Daily Burn Rate: $52.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: ACF CHILDREN'S BUREAU CWIG - ICF BASE AWARD HYBRID CPFF/FFP 09/25/2020 -09/24/2020 69 CLINS

Place of Performance

Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22031

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $95.3 million to ICF INCORPORATED, L.L.C. for work described as: ACF CHILDREN'S BUREAU CWIG - ICF BASE AWARD HYBRID CPFF/FFP 09/25/2020 -09/24/2020 69 CLINS Key points: 1. The contract's total value of $95.3 million for computer systems design services represents a significant investment. 2. ICF Incorporated, L.L.C. is the sole awardee for this hybrid Cost Plus Fixed Fee/Firm Fixed Price contract. 3. The contract duration is 1825 days, spanning five years. 4. The base award value of $95.3 million is notably higher than the benchmark of $5.2 million. 5. This contract falls under the Computer Systems Design Services NAICS code. 6. The contract was awarded via Full and Open Competition. 7. The contracting agency is the Department of Health and Human Services (HHS).

Value Assessment

Rating: questionable

The total contract value of $95.3 million significantly exceeds the provided benchmark of $5.2 million, indicating a potential overpayment or a contract scope that is substantially larger than typical for this service category. While the contract type is a hybrid CPFF/FFP, the high total value relative to the benchmark warrants scrutiny. Further analysis would be needed to understand if the scope of work justifies this cost difference or if pricing is inflated.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under Full and Open Competition, suggesting that multiple vendors had the opportunity to bid. However, with only two bids received (as indicated by 'no': 2), the level of competition may have been limited. This could potentially impact price discovery and may not have driven the most competitive pricing for the government.

Taxpayer Impact: While full and open competition was utilized, a low number of bids can mean taxpayers did not benefit from the most aggressive pricing possible.

Public Impact

The primary beneficiary is the Department of Health and Human Services, which will receive computer systems design services. These services are crucial for supporting the operational needs and technological infrastructure of HHS. The contract is geographically located in Virginia, impacting the local economy and workforce there. The contract supports the IT sector workforce, likely involving skilled computer systems designers and related professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Significant cost variance compared to benchmark raises value-for-money concerns.
Limited competition (2 bids) may have resulted in suboptimal pricing for taxpayers.
Hybrid contract type (CPFF/FFP) can introduce complexity in cost control and oversight.

Positive Signals

Awarded through Full and Open Competition, adhering to procurement principles.
Contract duration of five years provides stability for service delivery.
Services are critical for supporting a major federal agency's operations.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a critical component of the IT industry. This sector encompasses a wide range of services, including designing, developing, and implementing computer systems. The market size for federal IT services is substantial, with agencies like HHS being major consumers. This contract represents a significant portion of spending within this specific service category for the agency.

Small Business Impact

The data indicates that this contract was not set aside for small businesses ('sb': false). There is no explicit information regarding subcontracting plans for small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is unclear, though large prime contracts often have subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program officials within the Department of Health and Human Services. Accountability measures are inherent in the contract's performance clauses and payment terms. Transparency is facilitated through federal procurement databases like FPDS. The Inspector General for HHS would have jurisdiction for audits and investigations if any issues arise.

Related Government Programs

HHS IT Modernization Efforts
Federal Civilian Agency IT Services
Computer Systems Design and Integration Services
Health Information Technology Contracts

Risk Flags

Cost significantly exceeds benchmark.
Low number of bids received.
Potential for cost overruns in CPFF portion.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $95.3 million to ICF INCORPORATED, L.L.C.. ACF CHILDREN'S BUREAU CWIG - ICF BASE AWARD HYBRID CPFF/FFP 09/25/2020 -09/24/2020 69 CLINS

Who is the contractor on this award?

The obligated recipient is ICF INCORPORATED, L.L.C..

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $95.3 million.

What is the period of performance?

Start: 2020-09-25. End: 2025-09-24.

What specific computer systems design services are being procured under this contract?

The contract is categorized under NAICS code 541512, which covers Computer Systems Design Services. This typically includes activities such as analyzing user needs and designing information systems, planning and designing computer systems that integrate hardware, software, and communication technologies, and providing technical consulting services related to the above. For the Department of Health and Human Services, these services likely support the development, maintenance, and enhancement of critical health IT infrastructure, data management systems, and application platforms essential for the agency's mission.

How does the $95.3 million award compare to historical spending on similar services by HHS?

Historical spending data for similar computer systems design services by HHS would be necessary for a precise comparison. However, the provided benchmark of $5.2 million is significantly lower than the $95.3 million award. This substantial difference suggests that either this contract is for a much larger scope of work, a longer duration, or involves more complex services than the benchmark represents. Without specific historical contract data for comparable services, it's difficult to definitively assess if the $95.3 million is in line with past investments, but the disparity with the provided benchmark is a key indicator for further investigation.

What are the primary risks associated with a hybrid Cost Plus Fixed Fee/Firm Fixed Price contract structure?

Hybrid contract structures like CPFF/FFP aim to balance flexibility with cost control. The CPFF portion allows for flexibility in scope where requirements may evolve, but it carries a higher risk of cost overruns as the contractor is reimbursed for actual costs plus a fixed fee. The FFP portion provides cost certainty for defined tasks. The primary risks include potential for scope creep in the CPFF elements, contractor incentives to increase costs if not tightly managed, and complexity in administration and oversight to ensure fair pricing and prevent contractor inefficiencies from impacting the government.

What is the significance of the contract being awarded to a single vendor, ICF Incorporated, L.L.C.?

Awarding a contract to a single vendor, especially after a full and open competition, can occur for several reasons. It might indicate that ICF Incorporated, L.L.C. was the only bidder meeting all technical requirements, possessed unique capabilities, or offered the best value proposition. However, it also reduces the potential for competitive pressure on pricing and innovation throughout the contract's life. For taxpayers, this means relying on the government's negotiation and oversight to ensure fair pricing and performance, as there isn't ongoing competition to drive improvements.

What does the low number of bids (2) suggest about the market for these specific computer systems design services?

A low number of bids, such as two in this case, following a full and open competition, can suggest several market dynamics. It might indicate a highly specialized service where only a few companies possess the required expertise. Alternatively, it could reflect market conditions, such as high demand for these services leading to fewer available resources for bidding, or perhaps the specific requirements of the solicitation were very stringent or costly to meet. For taxpayers, fewer bidders generally mean less competitive pressure, potentially leading to higher prices than if more vendors had competed.

How does the geographic location (Virginia) potentially impact the contract's execution and cost?

The contract's performance location in Virginia is significant due to the region's concentration of federal agencies and government contractors. This proximity can facilitate easier communication, collaboration, and oversight between the contractor and government personnel. However, the cost of labor and operations in the Washington D.C. metropolitan area, which includes parts of Virginia, is generally higher than in many other regions of the U.S. This could contribute to the overall cost of the contract, particularly for services requiring highly skilled personnel, potentially impacting the value-for-money assessment if not adequately benchmarked against regional market rates.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: C-83454-O

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: ICF International, Inc.

Address: 1902 RESTON METRO PLAZA, RESTON, VA, 20190

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $95,338,355

Exercised Options: $95,338,355

Current Obligation: $95,338,355

Actual Outlays: $80,436,412

Subaward Activity

Number of Subawards: 19

Total Subaward Amount: $16,422,782

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HHSN316201200028W

IDV Type: GWAC

Timeline