HHS awards $13.4M contract for financial management modernization to Incentive Technology Group LLC

Contract Overview

Contract Amount: $13,367,070 ($13.4M)

Contractor: Incentive Technology Group LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2019-09-30

End Date: 2024-10-11

Contract Duration: 1,838 days

Daily Burn Rate: $7.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: INNOVATE MODERNIZE AND IMPROVE THE HHS FINANCIAL MANAGEMENT ENVIRONMENT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20002

State: District of Columbia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $13.4 million to INCENTIVE TECHNOLOGY GROUP LLC for work described as: INNOVATE MODERNIZE AND IMPROVE THE HHS FINANCIAL MANAGEMENT ENVIRONMENT Key points: 1. Contract aims to modernize and improve the financial management environment for HHS. 2. The contract is a Time and Materials type, which can pose cost risks if not managed carefully. 3. Awarded via full and open competition, suggesting a competitive bidding process. 4. The duration of the contract is substantial, spanning over 1800 days. 5. The primary service category is Computer Systems Design Services. 6. The contract is managed by the Office of the Assistant Secretary for Administration within HHS.

Value Assessment

Rating: fair

The contract value of $13.4 million over approximately five years for IT modernization services is within a reasonable range for federal contracts of this nature. However, the Time and Materials pricing structure warrants close monitoring to ensure costs do not escalate beyond initial projections. Benchmarking against similar financial system modernization projects within HHS or other large federal agencies would provide a clearer picture of value for money, but preliminary assessment suggests it is within expected parameters.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while the competition was broad, specific sources may have been excluded prior to the final award. This suggests a structured procurement process designed to ensure fair opportunity. The number of bidders is not specified, but the 'full and open' nature implies multiple interested parties likely participated, which generally supports price discovery.

Taxpayer Impact: A competitive award process helps ensure that taxpayer dollars are used efficiently by driving down prices through market forces.

Public Impact

Federal employees within HHS will benefit from improved financial management tools and systems. The services delivered will enhance the efficiency and accuracy of HHS's financial operations. The contract's impact is primarily concentrated within the District of Columbia, where HHS headquarters is located. The contract supports the modernization of critical government infrastructure, ensuring better stewardship of public funds.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) contract type can lead to cost overruns if not closely managed and monitored for scope creep.
The long duration of the contract (over 1800 days) increases the risk of technological obsolescence or changing requirements.
The specific exclusion of sources in the 'full and open' competition warrants further investigation into the rationale.

Positive Signals

Awarded through a full and open competition, indicating a robust and fair procurement process.
The contract addresses a critical need for financial management modernization within a major federal agency.
The contractor, Incentive Technology Group LLC, is tasked with improving essential government operations.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computer systems design and modernization. The federal IT services market is substantial, with agencies continually investing in upgrading legacy systems and implementing new technologies to improve efficiency and security. This contract aligns with the broader government-wide initiative to modernize federal financial systems and enhance data management capabilities. Comparable spending benchmarks for similar IT modernization projects within large federal departments can range from millions to tens of millions of dollars.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a set-aside. The primary contractor, Incentive Technology Group LLC, is not explicitly identified as a small business in the provided data, suggesting it may be a larger entity. The absence of a small business set-aside means opportunities for small business participation would likely be through subcontracting if pursued by the prime contractor.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Health and Human Services, specifically the Office of the Assistant Secretary for Administration, which awarded the contract. The contract type (Time and Materials) necessitates rigorous oversight to control costs and ensure adherence to the defined scope. Transparency is facilitated through federal procurement databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

HHS Financial Management Modernization Initiatives
Federal Financial Management Systems
IT Modernization Contracts
Computer Systems Design Services
Time and Materials Contracts

Risk Flags

Potential for cost overruns due to Time and Materials contract type.
Risk of scope creep in a long-duration IT modernization project.
Need for strong government oversight to ensure efficient performance.
Potential for technological obsolescence over the contract's extended period.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $13.4 million to INCENTIVE TECHNOLOGY GROUP LLC. INNOVATE MODERNIZE AND IMPROVE THE HHS FINANCIAL MANAGEMENT ENVIRONMENT

Who is the contractor on this award?

The obligated recipient is INCENTIVE TECHNOLOGY GROUP LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $13.4 million.

What is the period of performance?

Start: 2019-09-30. End: 2024-10-11.

What is the track record of Incentive Technology Group LLC with federal contracts, particularly in IT modernization?

Incentive Technology Group LLC has a history of receiving federal contracts, primarily within the IT services domain. While the provided data snippet focuses on this specific $13.4 million contract, a deeper analysis of their contract portfolio would reveal their experience with similar projects, agencies, and contract types. Examining past performance evaluations and any reported issues or successes on previous government contracts would offer insight into their reliability and capability to deliver on complex IT modernization efforts. Understanding their performance on prior Time and Materials contracts would be particularly relevant given the nature of this award.

How does the $13.4 million value compare to similar financial system modernization contracts within HHS or other large federal agencies?

The $13.4 million award for financial management environment modernization over approximately five years is a moderate-sized federal IT contract. To benchmark effectively, one would compare it to other contracts for Enterprise Resource Planning (ERP) implementation, financial system upgrades, or core financial system modernization within agencies of similar scale to HHS. For instance, contracts for upgrading financial systems in departments like Defense or Treasury, or even within other large components of HHS, could serve as comparators. The complexity of the existing system, the scope of modernization (e.g., cloud migration, integration with other systems), and the specific services procured (software, hardware, integration, training) would influence the value. Without more specific project details, it's difficult to provide a precise comparison, but the amount is not unusually high for such a critical undertaking.

What are the primary risks associated with a Time and Materials (T&M) contract for IT modernization, and how are they mitigated?

The primary risk with Time and Materials (T&M) contracts is the potential for cost overruns, as the contractor is reimbursed for direct labor hours and materials used, plus a fixed fee or percentage. This structure can incentivize longer project durations or less efficient work if not properly managed. For IT modernization, risks include scope creep, where requirements expand beyond the initial agreement, driving up costs. Mitigation strategies include establishing clear and detailed statements of work, setting not-to-exceed (NTE) limits on contract value, implementing robust project management and oversight, requiring detailed progress reports, and conducting regular reviews of labor hours and material costs. The government must actively manage the contractor's performance and ensure that work is necessary and efficient.

What is the expected effectiveness of this contract in achieving HHS's financial management modernization goals?

The effectiveness of this contract hinges on several factors, including the clarity of HHS's modernization goals, the capability of Incentive Technology Group LLC to meet those goals, and the government's oversight. The contract aims to 'innovate, modernize, and improve' the financial environment, suggesting a broad objective. Success will be measured by the extent to which the new systems enhance efficiency, accuracy, reporting capabilities, and compliance with financial regulations. Key performance indicators (KPIs) within the contract, if defined, would provide specific metrics for success. A well-executed modernization should lead to streamlined financial processes, better data integrity, and improved decision-making for HHS leadership.

How has HHS's spending on computer systems design services evolved over the past five years, and where does this contract fit in?

Analyzing HHS's spending trends on computer systems design services over the past five years would reveal patterns of investment in IT infrastructure and modernization. This $13.4 million contract represents a significant, but not necessarily dominant, portion of that spending. If HHS has consistently invested in IT modernization, this contract would align with that trend. Conversely, if spending has been declining, this award might indicate a renewed focus or a specific critical need. Understanding the historical context of HHS's IT procurement, including the types of services sought and the average contract values, helps contextualize this specific award and assess its strategic importance within the agency's overall IT strategy.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: NIHJT2010002

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: ICF International, Inc.

Address: 2121 CRYSTAL DR STE 720, ARLINGTON, VA, 22202

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: $35,426,670

Exercised Options: $13,367,070

Current Obligation: $13,367,070

Actual Outlays: $9,194,906

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSN316201200134W

IDV Type: GWAC

Timeline