HHS awards $63.8M for IT services to Deloitte Consulting LLP, with a 2020 completion date

Contract Overview

Contract Amount: $63,873,405 ($63.9M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Health and Human Services

Start Date: 2017-07-21

End Date: 2023-01-31

Contract Duration: 2,020 days

Daily Burn Rate: $31.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF DELOITTE CONSULTING LLP:1167543 [17-001309]

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $63.9 million to DELOITTE CONSULTING LLP for work described as: IGF::OT::IGF DELOITTE CONSULTING LLP:1167543 [17-001309] Key points: 1. Value for money appears fair given the duration and scope of services. 2. Full and open competition suggests a potentially competitive pricing environment. 3. Risk indicators are moderate, with a long contract duration and fixed-price structure. 4. Performance context shows a long-term engagement for IT services. 5. Sector positioning is within IT services for a major health agency.

Value Assessment

Rating: fair

The contract value of $63.8 million over approximately 5.5 years averages to about $11.6 million annually. This is a substantial award, but without specific deliverables or performance metrics, a direct value-for-money assessment is challenging. Benchmarking against similar large-scale IT service contracts for federal health agencies would be necessary for a more precise evaluation. The firm fixed-price contract type suggests that the contractor bears the risk of cost overruns, which can be a positive indicator for the government if managed effectively.

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 bidders suggests a degree of competition, though the exact number of proposals received and the evaluation process are not detailed here. A higher number of bidders typically leads to more competitive pricing and a wider range of technical solutions.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation, leading to better value for public funds.

Public Impact

The primary beneficiary is the Department of Health and Human Services, specifically the National Institutes of Health, receiving essential IT support. Services delivered include computer systems design, crucial for the operational efficiency of a large federal agency. The geographic impact is centered in Maryland, where the NIH facilities are located. Workforce implications include the employment of IT professionals by Deloitte Consulting LLP to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 5 years) can sometimes lead to scope creep or outdated technology if not actively managed.
Firm fixed-price contracts can incentivize contractors to cut corners if oversight is insufficient, potentially impacting quality.
Reliance on a single large contractor for critical IT services may pose a risk if the contractor's performance falters.

Positive Signals

Awarded under full and open competition, suggesting a robust selection process.
Firm fixed-price contract aligns incentives for cost control.
Long-term engagement indicates a sustained need and potentially successful past performance.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a critical component of the broader Information Technology (IT) industry. The IT services market for the federal government is substantial, with agencies like HHS relying heavily on external contractors for specialized expertise and support. Comparable spending benchmarks for IT services at large federal health organizations often run into tens or hundreds of millions of dollars annually, depending on the scope and complexity of the requirements.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded through full and open competition, it is unlikely to have significant direct subcontracting opportunities specifically for small businesses unless mandated by the prime contractor. The primary focus appears to be on large-scale IT solutions rather than fostering small business participation through set-asides.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the National Institutes of Health. The firm fixed-price nature of the contract implies that the government's primary oversight concern would be ensuring the contractor meets the defined scope, schedule, and performance standards. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance metrics and oversight activities are not detailed in this summary.

Related Government Programs

IT Services Contracts
Computer Systems Design Services
Department of Health and Human Services Contracts
National Institutes of Health Contracts
Large IT Support Contracts

Risk Flags

Long contract duration
Limited number of bidders (2)

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $63.9 million to DELOITTE CONSULTING LLP. IGF::OT::IGF DELOITTE CONSULTING LLP:1167543 [17-001309]

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING LLP.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $63.9 million.

What is the period of performance?

Start: 2017-07-21. End: 2023-01-31.

What is the specific nature of the 'Computer Systems Design Services' provided under this contract?

The contract specifies 'Computer Systems Design Services' (NAICS code 541512). This broad category typically encompasses a range of activities related to the design, development, integration, and maintenance of computer systems. For the National Institutes of Health (NIH), this could include services such as designing and implementing new IT infrastructure, developing custom software solutions, integrating various hardware and software components, managing network architecture, providing cybersecurity design, and offering technical consulting for IT system improvements. The exact scope would be detailed in the contract's Statement of Work (SOW), outlining specific deliverables, technical requirements, and performance standards that Deloitte Consulting LLP is obligated to meet.

How does the awarded amount of $63.8 million compare to similar IT service contracts at the NIH or HHS?

The awarded amount of $63.8 million over approximately 5.5 years (July 2017 to January 2023) represents an average annual value of roughly $11.6 million. This figure is substantial but falls within the typical range for large-scale IT support contracts awarded to major federal health agencies like the NIH. Agencies of this size often require extensive IT infrastructure, research computing support, data management systems, and cybersecurity services, leading to multi-million dollar annual expenditures. Without access to specific contract details and performance metrics, a precise comparison is difficult, but the amount is consistent with the scale of IT needs for an organization like the NIH.

What are the primary risks associated with a firm fixed-price contract of this magnitude and duration?

A primary risk with a firm fixed-price (FFP) contract of this size ($63.8M) and duration (over 5 years) is the potential for the contractor to reduce quality or scope to maintain profitability if cost pressures arise, especially if government oversight is not rigorous. Conversely, if the government's requirements change significantly, the FFP structure can make modifications costly and complex. Another risk is that the fixed price might not accurately reflect evolving market costs or technological advancements over the contract's lifespan, potentially leading to either the government overpaying or the contractor being unable to deliver optimal solutions without costly change orders. Effective contract management, clear performance metrics, and regular communication are crucial to mitigate these risks.

What does the fact that this contract was awarded under 'full and open competition' imply for its effectiveness and cost?

Awarding the contract under 'full and open competition' implies that the NIH sought proposals from all eligible and responsible sources, maximizing the pool of potential bidders. This process is designed to foster a competitive environment, which generally leads to better pricing, higher quality services, and innovative solutions as contractors vie for the award. The fact that only two bidders participated, as indicated by 'no': 2, suggests that while competition was allowed, the number of actual competitors was limited. This could still yield competitive results, but a larger number of bidders would typically provide stronger assurance of optimal price discovery and value for the government.

What is Deloitte Consulting LLP's track record with federal IT contracts, particularly with HHS?

Deloitte Consulting LLP is a major federal contractor with a significant history of performing IT and professional services across various government agencies, including the Department of Health and Human Services (HHS). They are known for handling large, complex IT modernization, cybersecurity, and system integration projects. While this specific contract highlights a substantial award from the National Institutes of Health (NIH), Deloitte's broader federal portfolio includes numerous contracts of similar or larger scale. Their track record generally indicates experience with large-scale IT solutions, though specific performance details, past issues, or commendations on individual contracts would require deeper analysis of contract performance reports and agency evaluations.

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: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1725 DUKE ST, ALEXANDRIA, VA, 22314

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $113,776,924

Exercised Options: $63,873,405

Current Obligation: $63,873,405

Actual Outlays: $17,715,556

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $18,223,637

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSN316201200018W

IDV Type: GWAC

Timeline