HHS awarded DLH, LLC $21.9M for computer systems design, with 6 bidders in a full and open competition

Contract Overview

Contract Amount: $21,920,817 ($21.9M)

Contractor: DLH, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2015-09-17

End Date: 2019-12-31

Contract Duration: 1,566 days

Daily Burn Rate: $14.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 6

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IGF::OT::IGF

Place of Performance

Location: FREDERICK, FREDERICK County, MARYLAND, 21703

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $21.9 million to DLH, LLC for work described as: IGF::OT::IGF Key points: 1. The contract value of $21.9 million over approximately 4 years represents a significant investment in IT support. 2. Full and open competition suggests a healthy market for these services, potentially leading to better pricing. 3. The Cost Plus Fixed Fee (CPFF) contract type introduces some cost-reimbursement risk, requiring diligent oversight. 4. The contract's duration and scope indicate a need for specialized IT expertise within CMS. 5. Performance was awarded as a Delivery Order under a larger IDIQ, suggesting a pre-vetted contractor. 6. The contractor, DLH, LLC, has a track record with federal agencies, which can be a positive indicator.

Value Assessment

Rating: good

The contract value of $21.9 million for computer systems design services over roughly four years appears reasonable given the scope. Benchmarking against similar IT services contracts awarded by HHS or CMS would provide a more precise value-for-money assessment. The CPFF structure necessitates careful monitoring of costs to ensure efficiency, but it allows for flexibility in complex projects. The presence of 6 bidders in a full and open competition suggests competitive pricing was likely achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition after exclusion of sources, indicating that multiple vendors were solicited and allowed to bid. The fact that 6 bidders participated suggests a robust competitive environment for these computer systems design services. This level of competition generally leads to better price discovery and potentially more innovative solutions as contractors vie for the award.

Taxpayer Impact: A competitive bidding process with multiple bidders typically benefits taxpayers by driving down costs and ensuring the government receives the best value for its investment.

Public Impact

Beneficiaries include the Centers for Medicare and Medicaid Services (CMS) and potentially healthcare providers and beneficiaries who rely on the IT systems supported. Services delivered include computer systems design, crucial for maintaining and improving the complex IT infrastructure supporting Medicare and Medicaid. The geographic impact is primarily national, as CMS operates nationwide, though specific support may be localized. Workforce implications include the creation or maintenance of jobs for IT professionals and support staff within DLH, LLC and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The CPFF contract type can lead to cost overruns if not managed tightly, as the contractor is reimbursed for allowable costs plus a fixed fee.
Reliance on a single delivery order under a larger IDIQ means the overall performance and value depend on the broader contract's structure and oversight.

Positive Signals

The contract was awarded through full and open competition, indicating a competitive process that likely yielded fair pricing.
The participation of 6 bidders suggests a healthy market and sufficient contractor interest in this type of work.
DLH, LLC's status as an established federal contractor may indicate a level of experience and reliability.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computer systems design. The federal IT services market is substantial, with agencies like HHS being major spenders. This contract likely supports the critical infrastructure for CMS's operations, which are vital to the nation's healthcare system. Comparable spending benchmarks would involve analyzing other contracts for similar IT design and support services within federal health agencies.

Small Business Impact

The provided data does not indicate if this contract included small business set-asides or if DLH, LLC is a small business. Analysis of subcontracting plans would be necessary to determine the extent of small business participation. Without this information, the direct impact on the small business ecosystem remains unclear, though larger contracts often involve subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the Centers for Medicare and Medicaid Services (CMS). As a delivery order under a larger IDIQ, oversight may also be influenced by the terms of the parent contract. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

HHS IT Modernization
CMS Health IT Services
Federal Civilian IT Procurement
Healthcare Information Systems

Risk Flags

Cost-reimbursement contract type (CPFF) requires diligent oversight to manage costs.
Performance is tied to a Delivery Order under a larger IDIQ, requiring assessment of both levels.
Scope definition and management are critical for CPFF contracts to prevent cost overruns.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $21.9 million to DLH, LLC. IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is DLH, 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 $21.9 million.

What is the period of performance?

Start: 2015-09-17. End: 2019-12-31.

What is the track record of DLH, LLC with federal contracts, particularly within the Department of Health and Human Services?

DLH, LLC has a significant history of federal contracting, particularly with agencies like the Department of Health and Human Services (HHS). A review of federal procurement data reveals numerous awards to DLH, LLC across various task orders and contract vehicles. Their work often spans IT services, healthcare support, and professional services. For instance, prior to this specific delivery order, DLH may have held other contracts with CMS or related agencies, providing similar computer systems design or IT support. Assessing their past performance ratings, any past performance issues, and the types of services they have successfully delivered in similar contexts would be crucial for understanding their reliability and capability for this contract. Their extensive federal footprint suggests a familiarity with government contracting processes and requirements.

How does the awarded amount of $21.9 million compare to similar computer systems design contracts within HHS or CMS?

The $21.9 million award for computer systems design services over approximately four years (September 2015 to December 2019) needs to be benchmarked against comparable contracts to assess value. Similar contracts within HHS or CMS for IT modernization, system integration, or specialized software development could serve as benchmarks. Factors such as contract type (e.g., FFP, CPFF, T&M), scope of work, duration, and the specific technical requirements will influence pricing. If this contract's per-year cost or total value is significantly higher or lower than comparable contracts, it warrants further investigation into the reasons, such as unique technical challenges, market conditions, or differences in competition levels. Without direct comparative data, it's difficult to definitively state if this represents excellent or questionable value.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for IT services?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract, like the one awarded to DLH, LLC, is the potential for cost overruns. In a CPFF structure, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. If the contractor's costs exceed initial estimates, the government bears that increased cost. This necessitates robust oversight from the government to ensure costs are reasonable, allocable, and allowable. The fixed fee, however, provides some incentive for the contractor to control costs, as their profit is capped. Risks also include potential scope creep if not managed carefully, and the administrative burden of tracking and auditing costs. For IT services, where requirements can evolve, CPFF can offer flexibility but demands vigilant government management.

How effective has the competition level (6 bidders) been in ensuring competitive pricing for this contract?

A competition level of 6 bidders in a full and open solicitation is generally considered healthy and indicative of a competitive market for computer systems design services. This number suggests that multiple firms were interested and capable of performing the work, creating an environment where contractors must offer competitive pricing to win the award. The effectiveness in ensuring competitive pricing can be further assessed by examining the bid prices submitted, the relationship between the winning bid and the government's estimate, and any subsequent modifications or change orders that might indicate initial pricing was not optimal. However, a higher number of bidders typically correlates with better price discovery and a greater likelihood that the government secured a fair market price.

What are the implications of this contract being a Delivery Order under a larger IDIQ contract?

This contract being a Delivery Order (DO) under a larger Indefinite Delivery/Indefinite Quantity (IDIQ) contract means that the underlying contract vehicle (the IDIQ) was already competed and awarded. The IDIQ establishes the terms and conditions, and potentially pre-negotiated rates, for services to be ordered over a period. The Delivery Order then specifies the actual work, quantities, and delivery schedule for a particular requirement. This approach allows for faster procurement of services once the IDIQ is in place. The implications include: 1) The competition for the IDIQ itself was broader, potentially setting a competitive baseline. 2) The specific DO competition might be limited to IDIQ holders, or in this case, was 'full and open competition after exclusion of sources,' suggesting a specific solicitation for this DO. 3) Oversight and performance management occur at both the IDIQ and DO levels. 4) The overall value and risk are tied to the performance and structure of the parent IDIQ.

What is the historical spending pattern for computer systems design services at CMS, and how does this contract fit?

Historical spending patterns for computer systems design services at CMS reveal a consistent and significant investment in IT infrastructure and modernization. CMS manages some of the most complex IT systems in the federal government, supporting Medicare, Medicaid, and the Health Insurance Marketplace. Spending in this category typically fluctuates based on major system upgrades, new legislative mandates, and ongoing maintenance needs. This $21.9 million contract, awarded in 2015, fits within the broader trend of CMS procuring IT support to maintain and enhance its operational capabilities. It likely represents a portion of the agency's overall IT budget allocated to external service providers for specialized design and development work, contributing to the ongoing effort to ensure the reliability and efficiency of critical healthcare IT systems.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: NIHJT2010002

Offers Received: 6

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: DLH Holdings Corp

Address: 5235 WESTVIEW DR STE 101, FREDERICK, MD, 21703

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

Financial Breakdown

Contract Ceiling: $26,753,055

Exercised Options: $21,920,817

Current Obligation: $21,920,817

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSN316201200145W

IDV Type: GWAC

Timeline