HHS renews Oracle FAH software licenses for $242K, raising questions about value and competition

Contract Overview

Contract Amount: $242,034 ($242.0K)

Contractor: Affigent, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2024-06-05

End Date: 2027-06-04

Contract Duration: 1,094 days

Daily Burn Rate: $221/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ORACLE FINANCIALS ACCOUNTING HUB (FAH) SOFTWARE LICENSES RENEWAL

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20201

State: District of Columbia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $242,034.28 to AFFIGENT, LLC for work described as: ORACLE FINANCIALS ACCOUNTING HUB (FAH) SOFTWARE LICENSES RENEWAL Key points: 1. The contract's value appears moderate, but a detailed cost-benefit analysis is needed to confirm value for money. 2. Competition was limited, with only two bidders, potentially impacting price discovery and cost-effectiveness. 3. The renewal of software licenses suggests a reliance on existing systems, with potential risks related to vendor lock-in. 4. Performance context is limited, but the fixed-price contract structure aims to control costs. 5. This contract falls within the IT services sector, specifically software licensing and maintenance. 6. The renewal indicates ongoing operational needs for financial accounting software within HHS. 7. The duration of the contract (nearly 3 years) suggests a stable, long-term requirement.

Value Assessment

Rating: fair

The contract value of $242,034.28 for Oracle Financials Accounting Hub (FAH) software licenses over approximately three years is a moderate expenditure. Benchmarking against similar software license renewals for enterprise-level financial systems is crucial to assess if this price is competitive. Without specific details on the modules licensed, user counts, or support levels, a definitive value-for-money assessment is challenging. However, the fixed-price nature of the contract provides some cost certainty for the agency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' with two bidders participating. While not a sole-source award, the limited number of bidders raises concerns about the extent of competition. A broader competition might have yielded more competitive pricing and potentially identified alternative solutions. The exclusion of other sources needs further justification to understand if it limited the competitive landscape unnecessarily.

Taxpayer Impact: With only two bidders, taxpayers may not have benefited from the most competitive pricing achievable through a wider bidding process. This limited competition could translate to higher costs than might be expected in a more robustly contested market.

Public Impact

The primary beneficiaries are the internal departments and personnel within the Department of Health and Human Services (HHS) who rely on the Oracle FAH software for financial accounting and management. The services delivered are the continued access to and support for the Oracle FAH software licenses, ensuring the continuity of critical financial operations. The geographic impact is primarily within the District of Columbia, where HHS administrative functions are concentrated. There are no direct workforce implications mentioned, as this is a software license renewal rather than a service contract that would directly hire or impact personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may lead to suboptimal pricing for taxpayers.
Reliance on a single vendor for critical financial software poses a risk of vendor lock-in.
The specific modules and functionalities licensed are not detailed, making it difficult to assess if the expenditure aligns precisely with current needs.

Positive Signals

The contract is a renewal, indicating the software meets ongoing operational requirements.
The fixed-price contract type helps in budget predictability and cost control.
The award was made after a form of competition, suggesting some level of market vetting.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on enterprise resource planning (ERP) software, which includes financial accounting hubs. The market for such software is dominated by a few large vendors, and government spending on IT licenses and maintenance represents a significant portion of federal IT budgets. Comparable spending benchmarks would involve analyzing other federal agencies' expenditures on similar Oracle financial modules or competing ERP systems.

Small Business Impact

There is no indication that this contract involved small business set-asides or subcontracting opportunities. The nature of enterprise financial software licensing often involves large, established vendors, and this specific award to Affigent, LLC, does not appear to prioritize small business participation. Further investigation into Affigent's subcontracting plans would be needed to fully assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Office of the Assistant Secretary for Administration (ASA) within HHS, which is the contracting activity. Accountability measures are inherent in the contract's performance work statement and delivery terms. Transparency is facilitated through contract databases like FPDS, where basic award information is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were identified.

Related Government Programs

Federal Financial Management Systems
Oracle Software Licenses
IT Software Maintenance and Support
Enterprise Resource Planning (ERP) Systems
HHS Financial Systems Modernization

Risk Flags

Limited Competition
Potential Vendor Lock-in
Lack of Detailed Cost-Benefit Analysis
Unclear Justification for Source Exclusion

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $242,034.28 to AFFIGENT, LLC. ORACLE FINANCIALS ACCOUNTING HUB (FAH) SOFTWARE LICENSES RENEWAL

Who is the contractor on this award?

The obligated recipient is AFFIGENT, 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 $242,034.28.

What is the period of performance?

Start: 2024-06-05. End: 2027-06-04.

What specific Oracle Financials Accounting Hub (FAH) modules and user licenses are included in this renewal, and how do these align with current HHS financial management needs?

The provided data does not specify the exact Oracle FAH modules or the number of user licenses covered by this $242,034.28 renewal. Understanding the specific functionalities being licensed is critical for assessing the value proposition. For instance, if the renewal includes modules that are underutilized or redundant with other systems, the value for money could be questionable. Conversely, if it covers essential functionalities for critical financial operations that have no viable alternatives, the expenditure might be justified. A detailed review of the contract's statement of work and license inventory would be necessary to confirm alignment with HHS's current financial management requirements and to ensure efficient resource allocation.

How does the per-unit cost or overall pricing of this Oracle FAH license renewal compare to similar contracts awarded by other federal agencies or to market rates for comparable financial software?

Benchmarking this $242,034.28 renewal against similar federal contracts or market rates is essential for evaluating its cost-effectiveness. Without access to detailed pricing breakdowns (e.g., per-user costs, module-specific pricing, support tiers), direct comparison is difficult. However, the limited competition (two bidders) suggests that the pricing might not be as competitive as it could be in a more open market. Agencies often negotiate enterprise license agreements or leverage government-wide acquisition contracts (GWACs) to secure better pricing. A thorough analysis would involve querying contract databases for comparable Oracle FAH or similar ERP software procurements across federal agencies, considering factors like contract duration, scope of services, and volume discounts.

What is Affigent, LLC's track record with HHS and other federal agencies regarding the delivery of Oracle software licenses and related support services?

Affigent, LLC's track record is a key factor in assessing the reliability and performance of this contract. As a reseller and IT solutions provider, their ability to secure favorable terms from Oracle and provide effective post-award support is crucial. Information on past performance, including any past issues with delivery, support, or contract compliance, would be available through sources like the Contractor Performance Assessment Reporting System (CPARS). Examining their history with HHS and other agencies for similar Oracle software procurements can provide insights into their reliability, responsiveness, and overall value. A positive performance history would mitigate some of the risks associated with vendor reliance.

Given the 'Full and Open Competition After Exclusion of Sources' award basis, what specific justifications were provided for excluding other potential bidders, and were these justifications robust?

The award basis 'Full and Open Competition After Exclusion of Sources' implies that while the competition was intended to be open, certain sources were deliberately excluded. The justification for such exclusions is critical. Typically, this might occur if only a limited number of contractors possess the necessary capabilities or if specific circumstances warrant limiting the pool. However, without the detailed justification documentation (e.g., Justification for Other Than Full and Open Competition - JOFOC), it's impossible to assess its robustness. Robust justifications are essential to ensure that taxpayer funds are used efficiently and that the government isn't foregoing potentially better offers due to unnecessary restrictions on competition.

What are the potential risks associated with renewing Oracle FAH software licenses, such as vendor lock-in, obsolescence, or the availability of more cost-effective cloud-based alternatives?

Renewing Oracle FAH software licenses carries several inherent risks. Vendor lock-in is a primary concern, as migrating away from established enterprise financial systems can be complex, costly, and time-consuming, potentially limiting future negotiation leverage. There's also the risk of software obsolescence; if HHS is not on the latest versions or if Oracle discontinues support for certain releases, functionality and security could be compromised. Furthermore, the market has seen a significant shift towards cloud-based ERP solutions (SaaS), which often offer greater scalability, flexibility, and potentially lower total cost of ownership compared to on-premises licenses and maintenance. Evaluating whether cloud alternatives were considered or if this renewal represents a strategic decision to maintain an on-premises infrastructure is important for long-term financial planning.

How has HHS's spending on Oracle FAH software licenses evolved over the past several years, and does this renewal represent an increase, decrease, or stable trend in spending?

Analyzing historical spending patterns for Oracle FAH software licenses at HHS is crucial for contextualizing this $242,034.28 renewal. Without access to historical contract data, it's difficult to determine if this amount represents an increase, decrease, or stable trend. If spending has been consistently around this figure, it suggests a stable requirement. However, if it represents a significant jump or drop, further investigation into the reasons – such as changes in user base, software functionality, contract terms, or pricing adjustments by Oracle – would be warranted. Understanding these trends helps in forecasting future IT expenditures and identifying potential cost-saving opportunities or areas of escalating costs.

Industry Classification

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

Product/Service Code: IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Nana Regional Corporation, Inc.

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

Business Categories: Alaskan Native Corporation Owned Firm, Category Business, DoT Certified Disadvantaged Business Enterprise, 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: $437,383

Exercised Options: $242,034

Current Obligation: $242,034

Actual Outlays: $114,814

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC59B

IDV Type: GWAC

Timeline