HHS awards $175.8M CIO-SP3 task order to OptumServe for IT services
Contract Overview
Contract Amount: $175,829,543 ($175.8M)
Contractor: Optumserve Technology Services, Inc.
Awarding Agency: Department of Health and Human Services
Start Date: 2017-09-30
End Date: 2024-11-29
Contract Duration: 2,617 days
Daily Burn Rate: $67.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: IGF::OT::IGF NITAAC CIO-SP3 TASK ORDER FOR ONE PI
Place of Performance
Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244
State: Maryland Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $175.8 million to OPTUMSERVE TECHNOLOGY SERVICES, INC. for work described as: IGF::OT::IGF NITAAC CIO-SP3 TASK ORDER FOR ONE PI Key points: 1. Significant contract value ($175.8M) for IT services. 2. OptumServe Technology Services, Inc. is the awardee. 3. Contract falls under the CIO-SP3 GWAC, indicating a structured procurement. 4. The service category is Computer Systems Design Services (NAICS 541512).
Value Assessment
Rating: fair
The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. The total award value is substantial, and the duration is long, requiring diligent oversight.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under Full and Open Competition, suggesting a competitive bidding process. This method generally promotes price discovery and value for the government.
Taxpayer Impact: The competitive award process aims to ensure taxpayer funds are used efficiently for necessary IT services.
Public Impact
Ensures continued IT support for Centers for Medicare and Medicaid Services. Supports critical healthcare infrastructure through technology services. Potential for innovation in computer systems design and implementation.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type can incentivize contractor to increase costs.
- Long contract duration increases risk of scope creep and cost escalation.
- No small business participation noted.
Positive Signals
- Awarded under Full and Open Competition.
- Utilizes a Government-Wide Acquisition Contract (GWAC).
Sector Analysis
This contract falls within the Information Technology sector, specifically Computer Systems Design Services. Spending in this area is substantial across federal agencies, supporting modernization and operational needs.
Small Business Impact
The data indicates no specific small business participation for this task order. Agencies are encouraged to promote small business utilization, and this contract does not appear to meet that goal.
Oversight & Accountability
The Centers for Medicare and Medicaid Services (CMS) is responsible for oversight. The long duration and cost-plus contract type necessitate robust monitoring to ensure performance and cost control.
Related Government Programs
- Computer Systems Design Services
- Department of Health and Human Services Contracting
- Centers for Medicare and Medicaid Services Programs
Risk Flags
- Cost Plus Fixed Fee contract type.
- Long contract duration (over 7 years).
- No small business participation.
- Potential for cost overruns.
Tags
computer-systems-design-services, department-of-health-and-human-services, md, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $175.8 million to OPTUMSERVE TECHNOLOGY SERVICES, INC.. IGF::OT::IGF NITAAC CIO-SP3 TASK ORDER FOR ONE PI
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 $175.8 million.
What is the period of performance?
Start: 2017-09-30. End: 2024-11-29.
What specific IT systems or services are being provided under this task order, and how do they align with CMS's strategic objectives?
The task order is for Computer Systems Design Services (NAICS 541512). While the specific systems are not detailed, these services typically encompass designing, developing, and integrating computer systems to meet agency needs. Alignment with CMS's strategic objectives would likely involve supporting healthcare data management, beneficiary services, or program integrity initiatives through enhanced IT infrastructure and capabilities.
What are the key performance indicators (KPIs) for this contract, and how is performance being measured to ensure value for money?
Key performance indicators are crucial for a Cost Plus Fixed Fee contract, especially one with a long duration. While not explicitly stated in the provided data, typical KPIs would include system uptime, response times, successful project completion rates, adherence to security protocols, and user satisfaction. CMS would need to actively monitor these metrics against established benchmarks to ensure OptumServe is delivering effectively and justifying the costs incurred.
What is the government's strategy for managing potential cost overruns inherent in a Cost Plus Fixed Fee contract of this magnitude?
Managing cost overruns in a CPFF contract requires proactive government oversight. This includes detailed cost tracking, regular audits of contractor expenses, strict change control processes, and clearly defined fixed-fee milestones. CMS should employ experienced contracting officers and technical experts to scrutinize all expenditures and ensure they are reasonable, allocable, and necessary for the contract's objectives, thereby mitigating the risk of uncontrolled cost escalation.
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: RFPCMS170233
Offers Received: 4
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Unitedhealth Group Incorporated
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: $176,985,478
Exercised Options: $175,829,543
Current Obligation: $175,829,543
Actual Outlays: $95,257,697
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Parent Contract
Parent Award PIID: HHSN316201200042W
IDV Type: GWAC
Timeline
Start Date: 2017-09-30
Current End Date: 2024-11-29
Potential End Date: 2024-11-29 00:00:00
Last Modified: 2025-09-10
More Contracts from Optumserve Technology Services, Inc.
- Data Service HUB — $174.1M (Department of Health and Human Services)
- Claims Reimbursement to Health Care Providers and Facilities for Testing, Treatment and Vaccine Administration for the Uninsured — $169.1M (Department of Health and Human Services)
- Enterprise Identity Management Services — $150.1M (Department of Health and Human Services)
- Data Services HUB (DSH) Logical Follow-On — $103.6M (Department of Health and Human Services)
- Aca/Aco Testing — $94.1M (Department of Health and Human Services)
View all Optumserve Technology Services, Inc. federal contracts →
Other Department of Health and Human Services Contracts
- Contact Center Operations (CCO) — $5.5B (Maximus Federal Services, Inc.)
- TAS::75 0849::TAS Oper of Govt R&D Goco Facilities — $4.8B (Leidos Biomedical Research Inc)
- THE Purpose of This Contract IS to Provide the Full Complement of Services Necessary to Care for UC in ORR Custody Including Facilities Set-Up, Maintenance, and Support Internal and Perimeter (IF Applicable) Security, Direct Care and Supervision Inc — $3.5B (Rapid Deployment Inc)
- Contact Center Operations — $2.6B (Maximus Federal Services, Inc.)
- Federal Contract — $2.4B (Leidos Biomedical Research Inc)
View all Department of Health and Human Services contracts →