HHS awarded $52.7M for computer systems design, with 2 delivery orders over 5 years
Contract Overview
Contract Amount: $52,713,156 ($52.7M)
Contractor: Peraton Inc.
Awarding Agency: Department of Health and Human Services
Start Date: 2016-06-15
End Date: 2021-08-15
Contract Duration: 1,887 days
Daily Burn Rate: $27.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: TIME AND MATERIALS
Sector: IT
Official Description: IGF::OT::IGF OTHER FUNCTIONS ORDERED OFF OADC FLEXIBLE ORDER 200-2015-F-63509
Place of Performance
Location: ATLANTA, DEKALB County, GEORGIA, 30341
State: Georgia Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $52.7 million to PERATON INC. for work described as: IGF::OT::IGF OTHER FUNCTIONS ORDERED OFF OADC FLEXIBLE ORDER 200-2015-F-63509 Key points: 1. The contract value of $52.7M over 5 years suggests a moderate annual spend. 2. The contract was awarded under full and open competition, indicating a broad market approach. 3. The use of Time and Materials (T&M) pricing can introduce cost escalation risks if not managed closely. 4. The contract's duration of 1887 days (approx. 5 years) is typical for IT services. 5. The award was a Delivery Order under a larger IDIQ contract, suggesting a phased approach to service delivery. 6. The small business indicators are false, suggesting the primary contractor is not a small business.
Value Assessment
Rating: fair
The total award of $52.7M over approximately 5 years averages to about $10.5M annually. Without specific benchmarks for 'Computer Systems Design Services' within the CDC or HHS, it's difficult to definitively assess value. However, the use of Time and Materials pricing, while flexible, can lead to higher costs compared to fixed-price contracts if not carefully monitored for efficiency and necessity of hours billed. The number of bids received (2) is on the lower side for full and open competition, which might suggest less competitive pricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit an offer. However, only two bids were received. This limited number of bidders, despite the open competition, could indicate a specialized market or potential barriers to entry for other firms. A low number of bidders can sometimes lead to less aggressive pricing as the perceived competitive pressure is reduced.
Taxpayer Impact: While full and open competition is generally favorable for taxpayers, the low number of bids suggests that the government may not have achieved the most competitive pricing possible. This could mean taxpayers are paying more than they might have if more vendors had participated.
Public Impact
The Centers for Disease Control and Prevention (CDC) benefits from these computer systems design services, likely to support its mission-critical IT infrastructure and data management. Services delivered include the design and implementation of computer systems, crucial for modern public health operations. The geographic impact is primarily within the United States, supporting federal health agencies. Workforce implications may include the need for skilled IT professionals to design, implement, and maintain these systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns due to Time and Materials pricing structure.
- Limited competition (2 bidders) may have resulted in suboptimal pricing for taxpayers.
- The specific nature of 'Computer Systems Design Services' can be broad, requiring clear scope management to avoid scope creep.
Positive Signals
- Awarded under full and open competition, maximizing potential vendor pool.
- The contract duration of over 5 years allows for stability and continuity of services.
- Delivery Order structure under an IDIQ provides flexibility in service acquisition.
Sector Analysis
The IT services sector, particularly computer systems design, is a significant area of federal spending. This contract falls within the broader category of professional, scientific, and technical services. Federal spending on IT services is consistently high, driven by the need to modernize infrastructure, enhance cybersecurity, and support agency operations. Comparable spending benchmarks would typically be found within government-wide IT contracts or agency-specific IT procurements, often measured by annual spend or cost per service hour.
Small Business Impact
The data indicates that small business participation was not a primary set-aside consideration for this specific contract, as 'sb' is false. This suggests the contract was not specifically targeted towards small businesses. Consequently, there are no direct subcontracting implications for small businesses mandated by this award. The impact on the small business ecosystem is neutral to minimal, as the focus was likely on large business capabilities for this particular procurement.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of Health and Human Services' internal contracting and program management offices. The Centers for Disease Control and Prevention (CDC) would be responsible for monitoring performance and ensuring compliance with the contract terms. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse. Transparency is generally facilitated through contract databases like FPDS, where award details are publicly available.
Related Government Programs
- IT Services
- Computer Systems Design
- Health IT
- Federal IT Modernization
- HHS IT Contracts
Risk Flags
- Low Bidder Count
- Time and Materials Pricing
- Potential for Cost Overruns
Tags
it-services, computer-systems-design, hhs, cdc, delivery-order, time-and-materials, full-and-open-competition, medium-value, professional-services, federal-contract, usa
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $52.7 million to PERATON INC.. IGF::OT::IGF OTHER FUNCTIONS ORDERED OFF OADC FLEXIBLE ORDER 200-2015-F-63509
Who is the contractor on this award?
The obligated recipient is PERATON INC..
Which agency awarded this contract?
Awarding agency: Department of Health and Human Services (Centers for Disease Control and Prevention).
What is the total obligated amount?
The obligated amount is $52.7 million.
What is the period of performance?
Start: 2016-06-15. End: 2021-08-15.
What is the track record of PERATON INC. with federal contracts, particularly within HHS?
PERATON INC. has a history of receiving federal contracts. Analyzing their specific track record within the Department of Health and Human Services (HHS) would involve reviewing past awards, performance evaluations, and any documented issues. A deeper dive would look at the types of services they've provided, the total value of contracts held, and their success rate in meeting contract requirements. Without specific data on PERATON INC.'s past performance within HHS, it's difficult to provide a detailed assessment, but their presence as a contractor suggests they have met certain qualification thresholds. Further investigation into contract close-out data and any past performance reviews would be necessary for a comprehensive understanding.
How does the $52.7M award compare to similar computer systems design contracts within HHS or the federal government?
The $52.7M award over approximately five years, averaging around $10.5M annually, is a substantial but not extraordinary figure for IT services within a large federal agency like HHS. To benchmark effectively, one would compare this to other 'Computer Systems Design Services' contracts awarded by HHS or similar agencies (e.g., CMS, NIH) over comparable periods. Factors like the specific scope of work, the complexity of the systems designed, and the pricing models (T&M vs. Fixed Price) are crucial for a fair comparison. If similar contracts for comparable services were awarded at a lower annual rate or with more favorable pricing structures, this contract might represent a fair to questionable value. Conversely, if the scope was particularly complex or niche, the pricing could be justified.
What are the primary risks associated with the Time and Materials (T&M) pricing structure used in this contract?
The primary risk associated with Time and Materials (T&M) pricing is the potential for cost escalation. Unlike fixed-price contracts, T&M agreements reimburse the contractor for the actual labor hours and material costs incurred. This can lead to higher overall costs if the contractor is inefficient, if the scope of work expands without proper controls, or if the government customer is not diligent in monitoring and approving hours and expenses. For taxpayers, this means less predictability in final costs and a greater reliance on the government's oversight capabilities to ensure that only necessary and efficient work is performed and paid for. Effective management, clear task orders, and robust oversight are critical to mitigating these risks.
How effective are the oversight mechanisms for this contract, given its T&M structure?
The effectiveness of oversight for this contract hinges on the diligence of the Contracting Officer's Representative (COR) and the program managers at the CDC. For T&M contracts, oversight must be particularly rigorous, focusing on verifying the necessity of each labor hour, the reasonableness of labor rates, and the appropriateness of any materials purchased. This involves detailed review of timesheets, progress reports, and invoices. The presence of an Inspector General's office within HHS provides an additional layer of oversight, particularly for investigating potential fraud, waste, or abuse. However, the ultimate effectiveness depends on the resources, training, and commitment of the personnel directly responsible for day-to-day contract administration and surveillance.
What does the low number of bidders (2) in a 'full and open competition' suggest about the market for these services?
A 'full and open competition' that results in only two bids suggests several possibilities about the market for these specific computer systems design services. It could indicate that the market is highly specialized, with only a few companies possessing the required expertise, security clearances, or past performance. Alternatively, there might be significant barriers to entry, such as complex pre-qualification requirements, high bonding costs, or the need for specific certifications that limit the pool of potential bidders. It could also suggest that the government's solicitation was not widely disseminated or that the contract's terms (e.g., location, duration, technical requirements) were not attractive to a broader range of vendors. This limited competition can reduce price pressure, potentially leading to higher costs for the government.
What is the historical spending pattern for computer systems design services at the CDC?
To understand the historical spending pattern for computer systems design services at the CDC, one would need to analyze procurement data over several fiscal years. This analysis should identify the total amount spent annually on such services, the primary contractors, the types of services procured (e.g., design, implementation, maintenance), and the contract vehicles used (e.g., IDIQs, specific task orders). Comparing the $52.7M award to historical averages would reveal whether this contract represents an increase, decrease, or continuation of previous spending levels. Understanding these patterns helps in assessing budget allocation, identifying trends, and evaluating the efficiency of past procurements.
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
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: NIHJT2010001
Offers Received: 2
Pricing Type: TIME AND MATERIALS (Y)
Evaluated Preference: NONE
Contractor Details
Parent Company: Veritas Capital Fund Management, L.L.C.
Address: 12975 WORLDGATE DR STE 7322, HERNDON, VA, 20170
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $54,718,405
Exercised Options: $52,734,843
Current Obligation: $52,713,156
Actual Outlays: $5,980
Subaward Activity
Number of Subawards: 89
Total Subaward Amount: $39,900,730
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Parent Contract
Parent Award PIID: HHSN316201200036W
IDV Type: GWAC
Timeline
Start Date: 2016-06-15
Current End Date: 2021-08-15
Potential End Date: 2021-08-15 00:00:00
Last Modified: 2023-05-15
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