HHS awards $176M to Accenture for Marketplace IT, raising competition concerns

Contract Overview

Contract Amount: $175,927,780 ($175.9M)

Contractor: Accenture Federal Services LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2014-01-11

End Date: 2015-01-10

Contract Duration: 364 days

Daily Burn Rate: $483.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: FEDERALLY FACILITATED MARKETPLACE DEVELOPMENT AND IMPLEMENTATION

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $175.9 million to ACCENTURE FEDERAL SERVICES LLC for work described as: FEDERALLY FACILITATED MARKETPLACE DEVELOPMENT AND IMPLEMENTATION Key points: 1. Significant investment in IT services for a critical government platform. 2. Sole-source award to Accenture Federal Services LLC limits competitive pricing. 3. Potential for cost overruns due to Cost Plus Award Fee contract type. 4. Focus on computer systems design services highlights digital transformation efforts.

Value Assessment

Rating: questionable

The $175.9M award is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to similar IT development contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This lack of competition likely prevented price discovery and potentially led to a higher cost for taxpayers.

Taxpayer Impact: The absence of competition may have resulted in a higher expenditure than if multiple vendors had vied for the contract.

Public Impact

Impacts the functionality and accessibility of the Health Insurance Marketplace. Affects millions of Americans seeking health insurance coverage. Highlights government reliance on large IT contractors for essential services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost Plus Award Fee contract
Lack of small business participation

Positive Signals

Critical government platform development
Experienced contractor selected

Sector Analysis

This contract falls under IT services, specifically computer systems design. The $176M spend is significant for a single contract in this sector, especially given its sole-source nature.

Small Business Impact

The data indicates that small business participation was not a factor in this award (ss: false, sb: false). This suggests a missed opportunity to leverage small businesses for specialized IT services.

Oversight & Accountability

The sole-source nature of this large contract warrants scrutiny regarding the justification for not competing. Oversight should focus on performance and cost control throughout the contract duration.

Related Government Programs

Computer Systems Design Services
Department of Health and Human Services Contracting
Centers for Medicare and Medicaid Services Programs

Risk Flags

Sole-source award limits competition.
Cost Plus Award Fee structure can lead to cost overruns.
No small business participation.
Significant contract value without competitive benchmarking.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $175.9 million to ACCENTURE FEDERAL SERVICES LLC. FEDERALLY FACILITATED MARKETPLACE DEVELOPMENT AND IMPLEMENTATION

Who is the contractor on this award?

The obligated recipient is ACCENTURE FEDERAL SERVICES 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 $175.9 million.

What is the period of performance?

Start: 2014-01-11. End: 2015-01-10.

What was the justification for awarding this contract on a sole-source basis?

The provided data does not include the specific justification for the sole-source award. Typically, such justifications would cite reasons like urgency, unique capabilities, or lack of market availability. Further investigation into HHS procurement records would be needed to determine the official rationale.

What are the risks associated with a Cost Plus Award Fee contract for IT development?

Cost Plus Award Fee (CPAF) contracts can incentivize contractors to incur costs to achieve performance goals, but they also carry a risk of cost escalation if not managed tightly. The 'award fee' component relies on subjective performance evaluations, which can lead to disputes or less predictable final costs compared to fixed-price contracts.

How does this contract contribute to the overall effectiveness of the Federally Facilitated Marketplace?

This contract is directly responsible for the development and implementation of the Federally Facilitated Marketplace (FFM). Its effectiveness is crucial for ensuring Americans can access and enroll in health insurance, thereby directly impacting the program's success and public trust.

Industry Classification

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

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Accenture Public Limited Company (UEI: 985015354)

Address: 800 NORTH GLEBE RD #300, ARLINGTON, VA, 22203

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

Financial Breakdown

Contract Ceiling: $184,103,640

Exercised Options: $175,927,780

Current Obligation: $175,927,780

Subaward Activity

Number of Subawards: 21

Total Subaward Amount: $20,084,676

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline