HHS awarded $28.2M for IT services, with Cognosante LLC securing a cost-plus award fee contract

Contract Overview

Contract Amount: $28,210,935 ($28.2M)

Contractor: Cognosante, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2005-02-23

End Date: 2011-09-23

Contract Duration: 2,403 days

Daily Burn Rate: $11.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 17

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: OTHER PROFESSIONAL SERVICES

Place of Performance

Location: FARGO, CASS County, NORTH DAKOTA, 58108

State: North Dakota Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $28.2 million to COGNOSANTE, LLC for work described as: OTHER PROFESSIONAL SERVICES Key points: 1. Contract value of $28.2 million over its period of performance. 2. Awarded to Cognosante, LLC for IT services. 3. Contract type is Cost Plus Award Fee, indicating performance-based incentives. 4. Competition was 'Full and Open Competition After Exclusion of Sources', suggesting a specific reason for excluding some sources. 5. The contract duration was approximately 2403 days (over 6 years). 6. The North American Industry Classification System (NAICS) code 541513 points to Computer Facilities Management Services. 7. The award was made by the Centers for Medicare and Medicaid Services (CMS).

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the services rendered and performance metrics. The Cost Plus Award Fee (CPAF) structure suggests that the government aims to incentivize good performance, but the final cost can vary. Comparing it to similar IT services contracts within HHS or CMS would provide better context on whether the $28.2 million represents a competitive price for the scope of work.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources'. This indicates that while the competition was intended to be open, certain sources were excluded, possibly due to specific requirements, prior performance, or security considerations. The number of bidders (17) suggests a reasonable level of interest, but the exclusion of sources might limit the full breadth of competitive pressure.

Taxpayer Impact: The exclusion of certain sources, even in an otherwise open competition, could potentially lead to less aggressive pricing than a truly unrestricted full and open competition. However, with 17 bidders, taxpayers likely still benefited from a competitive environment.

Public Impact

Beneficiaries include the Centers for Medicare and Medicaid Services (CMS) and potentially healthcare providers and beneficiaries who rely on the IT infrastructure managed under this contract. Services delivered likely involve the management and maintenance of computer facilities and related IT infrastructure. The geographic impact is primarily within the operational scope of CMS, which is national, though specific data center or support locations are not detailed. Workforce implications could include IT professionals employed by Cognosante, LLC and potentially government personnel overseeing the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Exclusion of Sources' in an otherwise 'Full and Open' competition warrants further investigation to ensure fairness and optimal value.
Cost Plus Award Fee contracts can sometimes lead to higher costs if performance incentives are not tightly managed.
The long duration of the contract (over 6 years) necessitates ongoing monitoring to ensure continued relevance and cost-effectiveness.

Positive Signals

The contract was competed, indicating an effort to solicit multiple offers.
A significant number of bidders (17) participated, suggesting market interest and potential for competitive pricing.
The Cost Plus Award Fee structure incentivizes contractor performance, aiming for higher quality service delivery.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computer facilities management. The federal IT services market is substantial, with agencies like HHS being major spenders. Contracts of this nature are crucial for maintaining the operational backbone of large government programs like Medicare and Medicaid. Comparable spending benchmarks would typically look at the cost per server, per user, or per managed system within similar government or large enterprise environments.

Small Business Impact

Information regarding small business set-asides or subcontracting plans is not explicitly provided in the data. Given the nature of IT facilities management, it's possible that larger prime contractors like Cognosante, LLC may utilize small businesses for specialized support services, but this would need to be confirmed through subcontracting reports.

Oversight & Accountability

Oversight would typically be conducted by contracting officers and program managers within CMS. Performance metrics and financial reporting requirements inherent in a CPAF contract serve as accountability measures. Transparency is generally facilitated through contract award databases, though detailed performance data may be less accessible to the public.

Related Government Programs

Medicare IT Modernization
Medicaid Information Technology
Federal Health IT Services
CMS IT Infrastructure Support
Government Data Center Management

Risk Flags

Potential for cost overruns due to CPAF structure if not managed tightly.
Limited competition due to source exclusion could impact price optimization.
Long contract duration requires sustained oversight for relevance and value.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $28.2 million to COGNOSANTE, LLC. OTHER PROFESSIONAL SERVICES

Who is the contractor on this award?

The obligated recipient is COGNOSANTE, LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Medicare and Medicaid Services).

What is the total obligated amount?

The obligated amount is $28.2 million.

What is the period of performance?

Start: 2005-02-23. End: 2011-09-23.

What specific IT facilities management services were included under this contract?

The provided data indicates the NAICS code 541513, which covers Computer Facilities Management Services. This typically includes services such as operating and maintaining clients' computer systems, data processing services, and related infrastructure management. For CMS, this could encompass managing data centers, ensuring network uptime, providing technical support for hardware and software, and implementing security measures for their critical IT systems that support Medicare and Medicaid programs. The specific scope would be detailed in the contract's Statement of Work (SOW).

How did the 'Exclusion of Sources' impact the competitive landscape and pricing?

The designation 'Full and Open Competition After Exclusion of Sources' implies that while the competition was broadly open, certain potential bidders were deliberately excluded. The reasons for exclusion are not specified but could range from non-compliance with mandatory requirements, past performance issues, or specific security clearances. While 17 bidders participated, the exclusion of potentially strong competitors might have limited the downward pressure on pricing compared to a completely unrestricted competition. The government must justify such exclusions, often to ensure best value or meet unique program needs.

What are the typical performance expectations and risks associated with a Cost Plus Award Fee (CPAF) contract for IT services?

CPAF contracts are designed to incentivize high performance by allowing the contractor to earn a base fee plus an award fee based on meeting or exceeding specific performance objectives. For IT facilities management, performance metrics could include system uptime, response times for issue resolution, security compliance, and project completion rates. The primary risk is that if performance standards are not clearly defined or rigorously monitored, the 'award' portion of the fee could be paid out without commensurate exceptional performance, leading to higher overall costs than anticipated. Conversely, well-defined metrics and oversight can drive significant improvements in service delivery.

How does this contract's value compare to other federal IT facilities management contracts?

Without specific details on the scope and service levels, a direct comparison of the $28.2 million value is difficult. However, for a contract spanning over six years (2403 days), this averages to roughly $4.6 million per year. This figure needs to be contextualized by the scale of CMS's IT infrastructure, the number of systems managed, and the criticality of the services. Larger federal IT contracts can range from millions to billions of dollars annually, so this appears to be a mid-to-large-sized contract within the federal IT services domain, typical for supporting major agency functions.

What is Cognosante, LLC's track record with federal IT contracts, particularly within HHS?

Cognosante, LLC has a history of working with federal agencies, including HHS, on various health IT and IT services contracts. Their portfolio often includes work related to healthcare modernization, data analytics, and program support. Examining their past performance on similar contracts, including any past performance evaluations or awards/debarments, would provide insight into their reliability and capability in delivering complex IT services. This specific contract represents a significant award for IT facilities management, suggesting a level of trust and demonstrated capability by CMS.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Facilities Management 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: SEALED BID

Solicitation ID: RFPCMS20050004

Offers Received: 17

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Cognosante Holdings, LLC (UEI: 826974789)

Address: 6263 N SCOTTSDALE RD STE 200, SCOTTSDALE, AZ, 01

Business Categories: Category Business, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $38,196,482

Exercised Options: $28,210,935

Current Obligation: $28,210,935

Timeline