HHS Spends $53M on IBM Consulting for HCUP Data, Ending March 2023

Contract Overview

Contract Amount: $53,145,978 ($53.1M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2017-12-27

End Date: 2023-03-27

Contract Duration: 1,916 days

Daily Burn Rate: $27.7K/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 HEALTHCARE COST AND UTILIZATION PROJECT (HCUP) FY 2018-2023

Place of Performance

Location: ANN ARBOR, WASHTENAW County, MICHIGAN, 48108

State: Michigan Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $53.1 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: IGF::OT::IGF HEALTHCARE COST AND UTILIZATION PROJECT (HCUP) FY 2018-2023 Key points: 1. IBM secured a significant contract for healthcare data services. 2. The contract utilized full and open competition, suggesting a competitive bidding process. 3. The cost-plus-fixed-fee structure warrants scrutiny for potential cost overruns. 4. This spending falls within the broader IT and Healthcare consulting sectors.

Value Assessment

Rating: fair

The contract value of $53.1 million over approximately 5 years for 'Other Scientific and Technical Consulting Services' appears reasonable given the scope of supporting the HCUP project. Benchmarking against similar large-scale data management and consulting contracts is necessary for a definitive assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This method generally promotes competitive pricing and ensures the government receives the best value. The fixed fee component provides some cost certainty.

Taxpayer Impact: Taxpayer funds are being used for essential healthcare data analysis, which can lead to improved public health outcomes and more efficient healthcare delivery. The competitive award process aims to maximize the value of this investment.

Public Impact

Enhances the quality and accessibility of healthcare statistics for researchers and policymakers. Supports evidence-based decision-making in healthcare policy and practice. Contributes to a better understanding of healthcare utilization and costs nationwide.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Positive Signals

Sector Analysis

This contract falls under scientific and technical consulting services, specifically within the healthcare IT sector. Spending benchmarks for similar data management and analysis contracts with large IT firms can vary widely based on scope, duration, and specific services required.

Small Business Impact

The data does not indicate specific subcontracting efforts or set-asides for small businesses. Large contracts like this often involve prime contractors like IBM, and it's unclear if they are engaging small businesses for specialized services.

Oversight & Accountability

The Agency for Healthcare Research and Quality (AHRQ) is responsible for overseeing this contract. Standard government oversight mechanisms, including performance reviews and financial audits, would be in place to ensure contract compliance and accountability.

Related Government Programs

Risk Flags

Tags

other-scientific-and-technical-consultin, department-of-health-and-human-services, mi, definitive-contract, 10m-plus

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $53.1 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. IGF::OT::IGF HEALTHCARE COST AND UTILIZATION PROJECT (HCUP) FY 2018-2023

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.

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 $53.1 million.

What is the period of performance?

Start: 2017-12-27. End: 2023-03-27.

What specific deliverables and performance metrics were established to ensure the value derived from IBM's services aligns with the $53 million investment?

The contract likely includes detailed statements of work, performance work statements, and key performance indicators (KPIs) tied to data quality, accessibility, timeliness, and analytical support for the HCUP project. Regular progress reports and reviews would assess IBM's adherence to these metrics, ensuring the government receives the intended value for its investment in data management and consulting.

How effectively did the full and open competition process ensure the most cost-effective solution for the HCUP data management and analysis needs?

Full and open competition generally fosters cost-effectiveness by allowing multiple vendors to propose solutions and bid. The effectiveness hinges on the clarity of the solicitation, the rigor of the evaluation criteria, and the competitiveness of the bids received. A thorough review of the bidding process and the final pricing compared to market rates would confirm the extent of cost-effectiveness achieved.

What mechanisms are in place to mitigate risks associated with the cost-plus-fixed-fee structure and ensure efficient use of taxpayer funds over the contract's duration?

Mitigation strategies for cost-plus-fixed-fee contracts typically involve robust government oversight, detailed cost accounting standards, and clear limitations on allowable costs. Regular audits, performance monitoring, and strict adherence to the fixed fee component help control overall project costs and ensure that the contractor is incentivized to manage expenses efficiently within the agreed-upon framework.

Industry Classification

NAICS: Professional, Scientific, and Technical ServicesManagement, Scientific, and Technical Consulting ServicesOther Scientific and Technical Consulting Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: AHRQ1810001

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 100 PHOENIX DR, 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: $77,154,583

Exercised Options: $53,145,978

Current Obligation: $53,145,978

Actual Outlays: $13,582,335

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $1,549,842

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline

Start Date: 2017-12-27

Current End Date: 2023-03-27

Potential End Date: 2023-03-27 00:00:00

Last Modified: 2023-05-01

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