HHS awards CGI Federal $150M for TAS Website Support, exceeding benchmark by 97%

Contract Overview

Contract Amount: $149,889,011 ($149.9M)

Contractor: CGI Federal Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2010-04-30

End Date: 2015-09-30

Contract Duration: 1,979 days

Daily Burn Rate: $75.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: TAS::75 0511::TAS WEBSITE SUPPORT SERVICES

Place of Performance

Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22033, UNITED STATES OF AMERICA

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $149.9 million to CGI FEDERAL INC. for work described as: TAS::75 0511::TAS WEBSITE SUPPORT SERVICES Key points: 1. Value for money appears questionable given the significant cost overrun compared to initial estimates. 2. Competition dynamics indicate a full and open process, which should theoretically drive better pricing. 3. Risk indicators include a long contract duration and a cost-plus contract type, often associated with higher costs. 4. Performance context is limited without specific details on service delivery and outcomes. 5. Sector positioning is within IT services, specifically computer systems design, a common area for federal contracts.

Value Assessment

Rating: questionable

The contract's final value of $149.9M significantly exceeded the initial benchmark of $75.7M, representing a 97% increase. This substantial cost growth warrants scrutiny. While cost-plus contracts can accommodate unforeseen complexities, the magnitude of the overrun suggests potential issues with initial cost estimation, scope creep, or contractor efficiency. Benchmarking against similar IT support contracts would be necessary for a more precise value assessment, but the doubling of the estimated cost is a notable concern.

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 offers. This competitive process is generally expected to yield favorable pricing and innovative solutions. The fact that the final cost significantly exceeded the benchmark despite open competition raises questions about the effectiveness of the bidding process in controlling costs or the accuracy of the initial benchmark.

Taxpayer Impact: Taxpayers may have paid a premium due to the significant cost growth, even with an open competition. The competitive process itself did not prevent the final cost from nearly doubling the initial estimate.

Public Impact

The primary beneficiaries are likely the Centers for Medicare and Medicaid Services (CMS) and its users who rely on the TAS website. Services delivered include computer systems design and support for the TAS website. The geographic impact is primarily within the agency, supporting federal operations. Workforce implications include employment for CGI Federal employees and potentially subcontractors involved in the project.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Significant cost overrun (97%) compared to initial benchmark.
Cost-plus contract type can incentivize higher spending.
Long contract duration (over 5 years) increases exposure to cost fluctuations.
Lack of detailed performance metrics makes value assessment difficult.

Positive Signals

Awarded through full and open competition, suggesting a robust bidding process.
Contractor CGI Federal is a known entity in the federal IT space.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on computer systems design and related services. The federal IT services market is substantial, with agencies consistently investing in maintaining and upgrading their digital infrastructure. Comparable spending benchmarks for similar website support and systems design contracts would typically range widely based on complexity and duration, but a near doubling of the initial estimate is unusual.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside provision. Large prime contractors like CGI Federal may still engage small businesses as subcontractors, but this is not mandated by the contract's structure.

Oversight & Accountability

Oversight mechanisms would typically involve the contracting officer's representative (COR) at CMS, regular performance reviews, and potentially Inspector General audits, especially given the cost growth. Accountability measures are tied to contract deliverables and performance standards. Transparency is facilitated by contract databases like FPDS, but detailed internal performance data and cost justifications are often not publicly available.

Related Government Programs

CMS IT Modernization Efforts
Federal Website Development and Maintenance Contracts
Computer Systems Design Services
Health Information Technology Contracts

Risk Flags

Significant Cost Growth
Potential for Cost Overruns (Cost-Plus Contract)
Long Contract Duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $149.9 million to CGI FEDERAL INC.. TAS::75 0511::TAS WEBSITE SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is CGI FEDERAL 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 $149.9 million.

What is the period of performance?

Start: 2010-04-30. End: 2015-09-30.

What specific factors contributed to the 97% cost overrun from the initial benchmark?

The provided data does not detail the specific factors leading to the 97% cost overrun. However, common reasons for such increases in cost-plus contracts include unforeseen technical complexities, scope creep (expansion of project requirements beyond the original agreement), changes in government needs, contractor inefficiencies, or initial underestimation of project costs. A thorough review of contract modifications, performance reports, and justification for changes would be necessary to pinpoint the exact causes. The long duration of the contract (1979 days) also provides ample opportunity for such cost escalations to occur over time.

How does the final contract value compare to similar TAS website support contracts awarded by HHS or other agencies?

Without access to a comprehensive database of comparable TAS website support contracts with detailed cost breakdowns and service scopes, a direct comparison is difficult. However, a near doubling of the initial estimated cost (from approximately $75.7M to $149.9M) is a significant deviation. Generally, well-managed IT support contracts, even those with complex requirements, aim to stay closer to initial estimates or have clearly justified deviations. This contract's cost growth suggests it may be an outlier, warranting further investigation into the specific services rendered and the market rates for such support during the contract period.

What are the key performance indicators (KPIs) for this contract, and how did CGI Federal perform against them?

The provided data does not include specific Key Performance Indicators (KPIs) for this contract or details on CGI Federal's performance against them. Typically, IT support contracts would have KPIs related to system uptime, response times for issue resolution, user satisfaction, security compliance, and project milestone completion. Assessing performance would require access to contract performance reports, quality assurance surveillance plans (QASPs), and any documented performance evaluations or award-fee determinations.

What is CGI Federal's track record with similar large-scale IT support contracts for federal health agencies?

CGI Federal has a significant track record of performing large-scale IT support contracts for various federal agencies, including those in the health sector. They are a major government IT contractor. However, the specific performance history, including past cost performance, adherence to schedules, and quality of service delivery on similar contracts, would need to be examined through contract databases and agency performance reviews. This particular contract's significant cost growth might be a point of concern in evaluating their overall track record for cost control on complex projects.

Given the cost-plus contract type, what mechanisms were in place to ensure cost efficiency and prevent contractor overspending?

Cost-plus contract types, such as Cost Plus Fixed Fee (CPFF) used here, generally include various mechanisms to control costs and ensure efficiency. These typically involve detailed cost accounting standards, requirements for the contractor to exercise due diligence in managing costs, and government oversight through Contracting Officer Representatives (CORs). The fixed fee component incentivizes the contractor to control costs to maximize profit. However, the effectiveness of these mechanisms depends heavily on robust government oversight, clear contract terms, and diligent monitoring of contractor expenditures and performance. The significant cost overrun suggests that either the mechanisms were insufficient, poorly implemented, or external factors drove costs beyond initial control.

How has spending on TAS Website Support Services evolved over the years, and does this contract represent a significant portion of that spending?

The provided data pertains to a single contract award from 2010 to 2015. To understand the evolution of spending on TAS Website Support Services, one would need to analyze historical spending data across multiple contracts and fiscal years within HHS and CMS. This specific contract, valued at nearly $150 million, likely represented a substantial portion of the agency's spending on this particular service during its performance period. However, without broader spending data, it's impossible to definitively state its significance relative to the total category spend over time.

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

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: CGI Inc (UEI: 248513116)

Address: 12601 FAIR LAKES CIR, FAIRFAX, VA, 22033

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $156,995,892

Exercised Options: $149,889,011

Current Obligation: $149,889,011

Actual Outlays: $-120,862

Parent Contract

Parent Award PIID: HHSM500200700015I

IDV Type: IDC

Timeline