HHS awarded $41.8M for communications support, with IPG DXTRA, INC. as the primary contractor

Contract Overview

Contract Amount: $41,792,040 ($41.8M)

Contractor: IPG Dxtra, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2014-07-18

End Date: 2015-06-30

Contract Duration: 347 days

Daily Burn Rate: $120.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: SUPPORT- PROFESSIONAL: COMMUNICATIONS IGF::OT::IGF

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20001

State: District of Columbia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $41.8 million to IPG DXTRA, INC. for work described as: SUPPORT- PROFESSIONAL: COMMUNICATIONS IGF::OT::IGF Key points: 1. The contract value of $41.8 million represents a significant investment in professional communications services. 2. Full and open competition was utilized, suggesting a potentially competitive bidding process. 3. The contract duration of 347 days indicates a medium-term engagement for the services provided. 4. The use of Time and Materials pricing may introduce cost variability if not closely managed. 5. The primary contractor, IPG DXTRA, INC., is positioned to deliver specialized communication expertise. 6. The contract falls under the Advertising Agencies NAICS code, highlighting its focus on marketing and public outreach.

Value Assessment

Rating: fair

The contract value of $41.8 million for a year-long communications support engagement appears substantial. Benchmarking against similar large-scale federal communications contracts would be necessary to definitively assess value for money. The Time and Materials (T&M) pricing structure, while offering flexibility, can sometimes lead to higher costs compared to fixed-price contracts if not meticulously monitored for efficiency and necessity of hours billed. Without specific performance metrics or comparison data, it's challenging to provide a precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bids suggests a moderate level of competition for this contract. While two bidders are better than one, a higher number of bids typically leads to more robust price discovery and potentially better pricing for the government. The specific details of the bidding process and the evaluation criteria would further illuminate the effectiveness of the competition.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best value through a wide range of offers. However, with only two bids received, the potential for cost savings might have been limited compared to a more crowded field.

Public Impact

The Centers for Medicare and Medicaid Services (CMS) is the primary beneficiary, receiving professional communications support. The services delivered likely encompass public relations, advertising, media outreach, and strategic communication planning. The contract's impact is primarily national, given CMS's role in healthcare policy and administration across the United States. The contract supports a workforce within IPG DXTRA, INC., contributing to employment in the communications and advertising sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Time and Materials pricing model introduces inherent risk of cost overruns if not strictly managed.
A limited number of bidders (two) may indicate potential barriers to entry or a concentrated market for these specialized services.

Positive Signals

Awarded under full and open competition, which promotes a fair and accessible procurement process.
The contractor, IPG DXTRA, INC., is likely selected based on demonstrated expertise in communications and advertising.

Sector Analysis

The federal advertising and public relations market is a segment within the broader professional services industry. This contract, valued at $41.8 million, falls within the scope of advertising agencies (NAICS code 541810). This sector is characterized by a mix of large, established firms and smaller specialized agencies. Federal spending in this area often supports public awareness campaigns, health initiatives, and agency branding. Comparable spending benchmarks would typically involve analyzing other large federal contracts for similar communications support services across various agencies.

Small Business Impact

This contract does not appear to have a small business set-aside, as indicated by 'ss': false. Furthermore, the 'sb' flag is also false, suggesting no specific subcontracting goals for small businesses were mandated within this award. This means that opportunities for small businesses to participate in this contract, either as prime contractors or subcontractors, were not explicitly prioritized through set-aside provisions.

Oversight & Accountability

Oversight for this contract would primarily reside with the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. They are responsible for monitoring contractor performance, ensuring compliance with contract terms, and approving payments. The Department of Health and Human Services (HHS) Office of Inspector General (OIG) may also conduct audits or investigations into the contract's execution and financial management if specific concerns arise, ensuring accountability and transparency.

Related Government Programs

Federal Communications Commission (FCC) regulatory activities
Department of Defense (DoD) public affairs contracts
National Institutes of Health (NIH) public outreach programs
Centers for Disease Control and Prevention (CDC) health communication campaigns

Risk Flags

Potential for cost overruns due to Time and Materials pricing.
Limited competition (two bidders) may reduce price discovery benefits.
Need for robust oversight to ensure efficient resource utilization.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $41.8 million to IPG DXTRA, INC.. SUPPORT- PROFESSIONAL: COMMUNICATIONS IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is IPG DXTRA, 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 $41.8 million.

What is the period of performance?

Start: 2014-07-18. End: 2015-06-30.

What is the track record of IPG DXTRA, INC. in performing federal contracts, particularly those involving large-scale communications?

Assessing the track record of IPG DXTRA, INC. requires a review of their past performance on federal contracts. This would involve examining contract databases for previous awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any documented instances of outstanding performance or deficiencies. For a contract of this magnitude ($41.8M), it is expected that the agency would have thoroughly vetted the contractor's past performance to ensure capability and reliability in delivering complex communications strategies and execution. Information on previous successful campaigns, client satisfaction, and adherence to timelines and budgets would be crucial indicators of their suitability for this role.

How does the $41.8 million contract value compare to typical federal spending on similar communications support services?

The $41.8 million contract value for professional communications support is substantial and likely falls within the upper range for such services within a single award. Federal spending on communications can vary widely depending on the scope, duration, and complexity of the required services. Large-scale public health campaigns, national awareness initiatives, or significant rebranding efforts by major agencies often command such figures. To benchmark effectively, one would compare this contract to other awards for similar services (e.g., advertising, public relations, strategic communications) issued by agencies like HHS, CDC, or DoD over comparable timeframes. The specific nature of the services procured by CMS for this contract would also be a key factor in determining if the value is aligned with market rates and agency needs.

What are the primary risks associated with the Time and Materials (T&M) pricing structure used in this contract?

The primary risk associated with a Time and Materials (T&M) pricing structure is the potential for cost overruns. Unlike fixed-price contracts, T&M contracts reimburse the contractor for the actual labor hours and material costs incurred, plus a fixed fee or நிர்ணயம். This can lead to unpredictable final costs for the government if the scope of work expands, inefficiencies arise in labor application, or if the contractor does not diligently manage resources. Effective oversight, detailed tracking of hours and expenses, and clear definition of work requirements are critical to mitigate these risks. Without robust monitoring, T&M contracts can become more expensive than initially anticipated, impacting the overall value for money.

How effective is the 'full and open competition' approach likely to be with only two bids received?

The effectiveness of 'full and open competition' is generally measured by the number and quality of bids received, which directly influences price discovery and potential for achieving best value. While 'full and open' theoretically allows all eligible sources to compete, receiving only two bids suggests that the market for these specific services might be concentrated, or that the solicitation requirements were highly specialized, potentially deterring broader participation. In such a scenario, the government may not have realized the full benefit of competition that a larger pool of bidders could offer. The agency's evaluation process and negotiation strategies would be crucial in ensuring that the best possible value was secured despite the limited number of offers.

What are the potential implications of this contract for the broader federal advertising and communications market?

This $41.8 million contract awarded to IPG DXTRA, INC. signifies a significant federal investment in professional communications, potentially influencing the market landscape. For the awarded contractor, it represents a substantial revenue stream and a high-profile project that can enhance their reputation and future business prospects within the federal sector. For other firms in the federal advertising and communications space, it highlights the types of large-scale opportunities available and the competitive dynamics involved. The contract's success or challenges could also inform future procurement strategies and agency approaches to acquiring similar services, potentially impacting market trends and the types of capabilities federal agencies prioritize.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Advertising, Public Relations, and Related Services › Advertising Agencies

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: RFPCMS20110012

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Interpublic Group of Companies Inc

Address: 919 3RD AVE FL 15, NEW YORK, NY, 10022

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

Financial Breakdown

Contract Ceiling: $41,792,040

Exercised Options: $41,792,040

Current Obligation: $41,792,040

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HHSM500201100029I

IDV Type: IDC

Timeline