HHS Awards $103.6M for Data Services Hub to OptumServe, Highlighting Need for Efficient IT Solutions

Contract Overview

Contract Amount: $103,563,406 ($103.6M)

Contractor: Optumserve Technology Services, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2016-09-12

End Date: 2019-03-31

Contract Duration: 930 days

Daily Burn Rate: $111.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: IGF::OT::IGF DATA SERVICES HUB (DSH) LOGICAL FOLLOW-ON

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $103.6 million to OPTUMSERVE TECHNOLOGY SERVICES, INC. for work described as: IGF::OT::IGF DATA SERVICES HUB (DSH) LOGICAL FOLLOW-ON Key points: 1. The contract focuses on computer systems design services, a critical area for modern government operations. 2. OptumServe Technology Services, Inc. secured this significant award, indicating strong performance or competitive advantage. 3. The $103.6 million value suggests a substantial investment in data management and infrastructure. 4. The 'MD' state code indicates a Maryland-based award, potentially impacting local economic factors.

Value Assessment

Rating: good

The contract's Cost Plus Award Fee (CPAF) structure allows for performance-based incentives, suggesting a focus on achieving specific outcomes. Benchmarking against similar IT service contracts is difficult without more granular cost data, but the total value is significant for a single delivery order.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically drives competitive pricing and ensures the best value is obtained. This method allows all eligible vendors to bid, fostering a robust price discovery process.

Taxpayer Impact: Full and open competition generally leads to more efficient use of taxpayer funds by ensuring competitive pricing and access to a wide range of solutions.

Public Impact

Improved data management and accessibility for critical health programs. Potential for enhanced efficiency in healthcare service delivery through better IT infrastructure. Impact on the IT services sector, particularly in Maryland. Ensures continuity of essential data hub operations for Medicare and Medicaid services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics in provided data.
Potential for cost overruns with CPAF if not managed tightly.
Dependence on a single vendor for a critical data hub.

Positive Signals

Awarded through full and open competition.
Incentive-based payment structure (CPAF) can drive performance.
Significant investment in essential IT infrastructure.

Sector Analysis

This contract falls within the IT services sector, specifically computer systems design. The $103.6 million award is substantial and reflects the growing importance of robust IT infrastructure for government agencies, particularly in healthcare.

Small Business Impact

The data indicates the awardee is OptumServe Technology Services, Inc., a large corporation. There is no explicit indication of small business participation in this specific delivery order, suggesting potential missed opportunities for subcontracting.

Oversight & Accountability

The Centers for Medicare and Medicaid Services (CMS) is responsible for oversight. The CPAF structure implies performance monitoring, but further details on specific oversight mechanisms and accountability measures would be beneficial.

Related Government Programs

Computer Systems Design Services
Department of Health and Human Services Contracting
Centers for Medicare and Medicaid Services Programs

Risk Flags

Potential for cost creep in CPAF structure.
Lack of explicit small business participation.
Dependence on a single vendor for critical data infrastructure.
Limited transparency on specific performance metrics and outcomes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $103.6 million to OPTUMSERVE TECHNOLOGY SERVICES, INC.. IGF::OT::IGF DATA SERVICES HUB (DSH) LOGICAL FOLLOW-ON

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 $103.6 million.

What is the period of performance?

Start: 2016-09-12. End: 2019-03-31.

What specific performance improvements or cost savings are expected from this Data Services Hub contract?

The contract aims to enhance the functionality and efficiency of the Data Services Hub, which supports critical Medicare and Medicaid operations. Expected outcomes likely include improved data processing, better accessibility for authorized users, and potentially more streamlined reporting. Specific cost savings are not detailed but are often an implicit goal of such IT modernization efforts, achieved through increased efficiency and reduced manual processes.

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

The primary risks with CPAF contracts include potential for cost overruns if performance targets are not clearly defined or if the government's oversight is insufficient. There's also a risk that the award fee structure might incentivize meeting minimum requirements rather than exceeding them significantly. Effective management and clear, measurable performance metrics are crucial to mitigate these risks and ensure value for taxpayer money.

How does this contract contribute to the overall effectiveness of the Centers for Medicare and Medicaid Services (CMS)?

This contract is crucial for the operational effectiveness of CMS by providing the underlying IT infrastructure for its Data Services Hub. This hub likely supports essential functions such as claims processing, data analysis for policy development, fraud detection, and program management. A well-functioning data hub ensures that CMS can effectively administer its programs, monitor healthcare trends, and make informed decisions to improve healthcare delivery and affordability.

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 AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Unitedhealth Group Incorporated

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

Business Categories: 8(a) Program Participant, Category Business, Minority Owned Business, Not Designated a Small Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, Indian (Subcontinent) American Owned Business

Financial Breakdown

Contract Ceiling: $103,563,406

Exercised Options: $103,563,406

Current Obligation: $103,563,406

Actual Outlays: $-491,929

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HHSM500200700024I

IDV Type: IDC

Timeline