HHS awarded $21.9M for computer systems design, with OPTUMSERVE TECHNOLOGY SERVICES, INC. as the primary contractor

Contract Overview

Contract Amount: $21,938,190 ($21.9M)

Contractor: Optumserve Technology Services, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2016-09-22

End Date: 2021-09-21

Contract Duration: 1,825 days

Daily Burn Rate: $12.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: IGF::CT::IGF

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $21.9 million to OPTUMSERVE TECHNOLOGY SERVICES, INC. for work described as: IGF::CT::IGF Key points: 1. The contract was awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Award Fee, which incentivizes performance but can lead to higher costs. 3. The duration of 1825 days (5 years) indicates a long-term need for these services. 4. The award was a Delivery Order, suggesting it's part of a larger contract vehicle. 5. The North American Industry Classification System (NAICS) code 541512 points to computer systems design services. 6. The contract was awarded to OPTUMSERVE TECHNOLOGY SERVICES, INC., a significant player in government contracting.

Value Assessment

Rating: fair

Benchmarking the value of this $21.9 million contract requires more detailed cost breakdowns and performance metrics. As a Cost Plus Award Fee contract, the final cost is influenced by performance, making direct price comparisons challenging without knowing the award fees. However, the duration of five years suggests a substantial investment in computer systems design services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 5 bidders suggests a moderate level of competition for this specific award. While competition is generally positive, the number of bidders could be higher for a contract of this size and duration.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to better pricing and service quality.

Public Impact

The contract supports the Centers for Medicare and Medicaid Services (CMS) in their mission. Services delivered likely involve the design and implementation of computer systems critical for healthcare administration. The geographic impact is primarily within Maryland, where the contractor is located. Workforce implications include employment opportunities for IT professionals within OPTUMSERVE TECHNOLOGY SERVICES, INC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee contracts can sometimes lead to costs exceeding initial estimates if performance targets are aggressively pursued or if cost controls are not robust.
The lack of specific performance metrics in the provided data makes it difficult to assess if the 'award fee' component was fully earned or if it represents optimal value.
The duration of the contract (5 years) means that potential cost overruns or inefficiencies would be sustained over a significant period.

Positive Signals

Awarded through full and open competition, indicating a competitive process that should drive value.
The contract has a defined end date, providing a clear timeframe for service delivery and budget allocation.
The contractor, OPTUMSERVE TECHNOLOGY SERVICES, INC., is a known entity in federal IT services, suggesting a degree of established capability.

Sector Analysis

This contract falls within the IT services sector, specifically computer systems design. The federal government is a major consumer of such services, with significant spending allocated to IT modernization, cybersecurity, and data management. Comparable spending benchmarks would typically be found within IT services categories for agencies like HHS, focusing on system integration, software development, and IT consulting.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. The primary contractor, OPTUMSERVE TECHNOLOGY SERVICES, INC., is likely a large business, and any subcontracting opportunities would be at their discretion.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officers and program managers within the Centers for Medicare and Medicaid Services (CMS). The Cost Plus Award Fee structure implies performance monitoring to determine award fees. Transparency would be enhanced through contract award databases and potentially through agency reports on IT spending. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Health IT Modernization Programs
Federal Civilian IT Services
Healthcare Data Management Systems
CMS IT Infrastructure Support

Risk Flags

Cost Plus Award Fee structure may lead to higher costs than anticipated.
Limited number of bidders (5) for a 5-year contract could indicate potential market concentration or barriers to entry.
Contract duration of 5 years requires sustained oversight to ensure continued value and performance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $21.9 million to OPTUMSERVE TECHNOLOGY SERVICES, INC.. IGF::CT::IGF

Who is the contractor on this award?

The obligated recipient is OPTUMSERVE TECHNOLOGY SERVICES, INC..

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: 2016-09-22. End: 2021-09-21.

What is the track record of OPTUMSERVE TECHNOLOGY SERVICES, INC. with federal contracts, particularly within HHS?

OPTUMSERVE TECHNOLOGY SERVICES, INC. has a significant history of federal contracting, particularly with the Department of Health and Human Services (HHS). Their portfolio often includes large-scale IT services, healthcare IT solutions, and administrative support contracts. Analyzing their past performance on similar contracts, including on-time delivery, budget adherence, and quality of service, is crucial for assessing their reliability. Data from contract databases like FPDS or SAM.gov would provide details on their award history, past performance evaluations, and any reported issues or disputes. Their extensive experience suggests a deep understanding of federal procurement processes and agency needs, but also necessitates scrutiny to ensure continued value and compliance.

How does the Cost Plus Award Fee (CPAF) structure impact the overall cost-effectiveness of this contract compared to fixed-price alternatives?

The Cost Plus Award Fee (CPAF) structure allows the contractor to be reimbursed for allowable costs plus a fee that is composed of a fixed base fee and an award amount. The award amount is determined by the government based on the contractor's performance against pre-defined criteria. This structure is often used when the scope of work is not precisely defined or when innovation and high performance are critical. While CPAF can incentivize superior performance, it carries a risk of higher overall costs compared to fixed-price contracts if the award fee is consistently maximized. Taxpayers benefit when the award fee effectively drives exceptional outcomes that justify the potentially higher expenditure. Conversely, if performance is merely adequate, the cost could be higher than a well-defined fixed-price contract without the added incentive.

What are the specific computer systems design services being procured under this contract and their criticality to CMS operations?

While the NAICS code 541512 indicates 'Computer Systems Design Services,' the specific services procured under this $21.9 million contract are not detailed in the provided data. Typically, these services for an agency like CMS could encompass a wide range of activities, including requirements analysis, system architecture design, software development and integration, database management, network design, and IT infrastructure planning. Given CMS's role in administering Medicare and Medicaid, these systems are critical for managing beneficiary data, processing claims, ensuring program integrity, and supporting healthcare policy implementation. The criticality implies that any disruption or failure in these systems could have significant operational and public health consequences, underscoring the importance of robust design and reliable performance.

What is the historical spending trend for similar computer systems design services at CMS or HHS over the past five years?

To assess historical spending trends for similar services at CMS or HHS, one would need to query federal procurement databases (e.g., FPDS, USASpending.gov) using relevant NAICS codes (like 541512) and filtering by agency (CMS, HHS) and fiscal years. Generally, federal spending on IT services, including computer systems design, has been substantial and often increasing, driven by needs for modernization, cybersecurity, cloud migration, and data analytics. Agencies like CMS face continuous demands to update legacy systems and develop new platforms to manage complex healthcare programs. Analyzing past spending would reveal whether this $21.9 million award represents a typical investment, an increase, or a decrease in this category, providing context for its scale and significance.

Were there any performance issues or contract disputes associated with OPTUMSERVE TECHNOLOGY SERVICES, INC. on previous HHS contracts that might indicate elevated risk?

Assessing the risk associated with OPTUMSERVE TECHNOLOGY SERVICES, INC. requires examining their past performance history, specifically looking for any reported contract disputes, performance failures, or negative past performance reviews on previous HHS contracts. Publicly available data sources, such as the Contractor Performance Assessment Reporting System (CPARS) or contract award databases, may contain information on past performance. A history of disputes or significant performance issues could indicate a higher risk of future problems, potentially impacting service delivery, cost, or schedule. Conversely, a clean record with positive performance reviews would suggest a lower risk profile. Without specific data on past disputes for this contractor at HHS, a definitive risk assessment is not possible, but it remains a critical area for due diligence.

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

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: NIHJT2010001

Offers Received: 5

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Unitedhealth Group Incorporated (UEI: 112871561)

Address: 10480 LITTLE PATUXENT PKWY SUITE 310, COLUMBIA, MD, 21044

Business Categories: Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Minority Owned Business, Not Designated a Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $27,734,051

Exercised Options: $21,938,190

Current Obligation: $21,938,190

Actual Outlays: $182,358

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSN316201200042W

IDV Type: GWAC

Timeline