HHS awarded $49M contract for healthcare data analytics to Truven Health Analytics

Contract Overview

Contract Amount: $49,057,945 ($49.1M)

Contractor: Truven Health Analytics LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2012-12-27

End Date: 2017-12-26

Contract Duration: 1,825 days

Daily Burn Rate: $26.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Healthcare

Official Description: IGF::OT::IGF HCUP

Place of Performance

Location: ANN ARBOR, WASHTENAW County, MICHIGAN, 48108

State: Michigan Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $49.1 million to TRUVEN HEALTH ANALYTICS LLC for work described as: IGF::OT::IGF HCUP Key points: 1. Contract focused on leveraging healthcare data for research and policy insights. 2. Competition was full and open, suggesting a potentially competitive bidding process. 3. Contract duration of 5 years indicates a significant, long-term need. 4. The contract type, Cost Plus Fixed Fee, allows for cost reimbursement plus a fixed fee. 5. The award was made to a single contractor, Truven Health Analytics LLC. 6. The North American Industry Classification System (NAICS) code 541690 points to specialized consulting services.

Value Assessment

Rating: fair

The contract value of $49 million over five years averages to approximately $9.8 million annually. Benchmarking this against similar large-scale data analytics contracts within the federal government is challenging without more specific service details. However, the Cost Plus Fixed Fee (CPFF) structure can sometimes lead to higher overall costs compared to fixed-price contracts if not managed carefully. The provided data does not include specific performance metrics or comparisons to market rates for similar services, making a definitive value-for-money assessment difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. This generally promotes a competitive environment, which can lead to better pricing and service offerings for the government. The data does not specify the number of bids received, which would provide further insight into the actual level of competition.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining services at competitive prices and encourages a wider range of potential providers to participate.

Public Impact

Beneficiaries include researchers, policymakers, and healthcare providers who will utilize the insights derived from the data analytics. Services delivered involve the analysis of healthcare data to support research, inform policy decisions, and improve healthcare quality. The geographic impact is national, as the data analyzed likely pertains to healthcare trends across the United States. Workforce implications may include the need for skilled data scientists, analysts, and researchers within the contractor's organization and potentially within the agency to manage and interpret the findings.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize contractors to incur higher costs if the fixed fee is substantial relative to the effort.
Lack of specific performance metrics in the provided data makes it difficult to assess the effectiveness and efficiency of the services delivered.
The broad nature of 'Other Scientific and Technical Consulting Services' could lead to scope creep if not tightly managed.

Positive Signals

Awarded under full and open competition, suggesting a robust and fair bidding process.
The contract duration of five years indicates a sustained commitment to data analytics, potentially leading to deeper insights over time.
The contract is managed by the Agency for Healthcare Research and Quality (AHRQ), a reputable agency focused on healthcare research.

Sector Analysis

This contract falls within the broader Information Technology and Professional Services sector, specifically focusing on data analytics and consulting within healthcare. The market for healthcare data analytics is substantial and growing, driven by the increasing volume of healthcare data and the need for evidence-based decision-making. Comparable spending benchmarks would typically involve other large federal contracts for data analysis, research support, and health informatics services, often awarded to specialized firms.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. This suggests that the primary award went to a large business, and the impact on the small business ecosystem would depend on whether Truven Health Analytics LLC engages small businesses as subcontractors for specialized tasks.

Oversight & Accountability

Oversight for this contract would typically be provided by the Agency for Healthcare Research and Quality (AHRQ) through contract officers and technical monitors. Accountability measures would be defined in the contract's statement of work and performance standards. Transparency is generally facilitated through contract award databases, but detailed performance reports and specific oversight activities are often internal to the agency.

Related Government Programs

Healthcare Data Analysis Services
Health Information Technology
Medical Research Support
Public Health Data Management
Scientific and Technical Consulting

Risk Flags

Potential for cost overruns due to CPFF structure.
Risk of data security breaches if sensitive patient information is handled.
Ensuring the quality and accuracy of complex data analysis.
Defining clear, measurable performance outcomes for consulting services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $49.1 million to TRUVEN HEALTH ANALYTICS LLC. IGF::OT::IGF HCUP

Who is the contractor on this award?

The obligated recipient is TRUVEN HEALTH ANALYTICS LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Agency for Healthcare Research and Quality).

What is the total obligated amount?

The obligated amount is $49.1 million.

What is the period of performance?

Start: 2012-12-27. End: 2017-12-26.

What was the specific nature of the data analyzed under this contract?

The provided data does not specify the exact nature of the healthcare data analyzed. However, given the awarding agency, the Agency for Healthcare Research and Quality (AHRQ), the data likely included patient records (anonymized or de-identified), claims data, clinical trial results, public health statistics, and other health-related information. The goal would be to extract insights related to healthcare quality, cost, access, patient safety, and health outcomes to inform policy and research.

How does the $49 million contract value compare to other AHRQ data analytics contracts?

Without access to a comprehensive database of all AHRQ contracts and their specific scopes, a direct comparison is difficult. However, $49 million over five years represents a significant investment in data analytics. AHRQ frequently awards contracts for research support and data analysis, and the value of such contracts can range widely depending on complexity, duration, and the specific research questions being addressed. This particular contract appears to be a substantial award, reflecting a major initiative.

What are the potential risks associated with a Cost Plus Fixed Fee (CPFF) contract for data analytics?

The primary risk with CPFF contracts is that the contractor may have less incentive to control costs compared to fixed-price contracts, as costs are reimbursed. If the fixed fee is substantial or the oversight is lax, the total cost to the government could exceed what might have been achieved under a different contract type. For data analytics, risks also include potential data breaches (if sensitive data is involved), inaccurate analysis due to flawed methodologies, and failure to deliver actionable insights, all of which need careful monitoring and clear performance standards.

What was the track record of Truven Health Analytics LLC at the time of this award?

Truven Health Analytics LLC (now part of IBM Watson Health) was a well-established company in the health data analytics space at the time of this award (2012). They were known for providing data-driven insights and solutions to healthcare organizations, government agencies, and life sciences companies. Their track record likely included numerous previous contracts and projects involving large-scale health data analysis, performance measurement, and research support, making them a credible bidder for this HHS contract.

How might this contract have influenced healthcare policy or research?

Contracts like this are crucial for evidence-based policymaking. The insights generated from analyzing large datasets can inform decisions on healthcare reform, payment models, quality improvement initiatives, and public health strategies. For example, analysis could identify trends in chronic disease prevalence, evaluate the effectiveness of different treatment protocols, or assess disparities in healthcare access, all of which are vital for shaping effective healthcare policy and advancing medical research.

What are the implications of the 'Other Scientific and Technical Consulting Services' NAICS code?

The NAICS code 541690, 'Other Scientific and Technical Consulting Services,' is a broad category. It indicates that the services provided were specialized consulting that did not fit into more specific categories like engineering, environmental, or IT consulting. For this contract, it suggests the work involved expert advice and analysis related to scientific or technical challenges within the healthcare domain, likely encompassing data interpretation, research methodology, and strategic guidance based on analytical findings.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Other Scientific and Technical Consulting Services

Product/Service Code: SPECIAL STUDIES/ANALYSIS, NOT R&D › SPECIAL STUDIES - NOT R and D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: International Business Machines Corporation (UEI: 001368083)

Address: 777 E EISENHOWER PKWY, ANN ARBOR, MI, 48108

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

Financial Breakdown

Contract Ceiling: $49,057,945

Exercised Options: $49,057,945

Current Obligation: $49,057,945

Subaward Activity

Number of Subawards: 51

Total Subaward Amount: $8,367,851

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline