HHS awarded $70.1M for critical IT systems engineering support, with 2 bidders competing

Contract Overview

Contract Amount: $70,146,286 ($70.1M)

Contractor: ICF Z-Tech, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2013-06-20

End Date: 2019-01-18

Contract Duration: 2,038 days

Daily Burn Rate: $34.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IGF::CT::IGF FOR CRITICAL FUNCTIONS - PURPOSE OF AWARD: TO AWARD CONTRACT FOR THE ERA SYSTEMS ENGINEERING SUPPORT SERVICES REQUIREMENT.

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $70.1 million to ICF Z-TECH, INC. for work described as: IGF::CT::IGF FOR CRITICAL FUNCTIONS - PURPOSE OF AWARD: TO AWARD CONTRACT FOR THE ERA SYSTEMS ENGINEERING SUPPORT SERVICES REQUIREMENT. Key points: 1. The contract focused on essential IT functions, indicating a need for specialized technical expertise. 2. With two bidders, competition was present but could potentially limit price discovery. 3. The contract duration of over 5 years suggests a long-term need for these services. 4. The use of a Cost Plus Fixed Fee (CPFF) contract type can incentivize cost control but requires careful oversight. 5. The National Institutes of Health (NIH) is a major health research agency, implying the services supported critical research infrastructure. 6. The award value of $70.1M over its period of performance indicates significant investment in IT support.

Value Assessment

Rating: fair

Benchmarking this contract's value is challenging without specific service details and comparable contracts. The CPFF structure requires diligent monitoring to ensure costs remain reasonable and aligned with the fixed fee. The total award of $70.1M over approximately 5.5 years suggests an average annual spend of around $12.7M, which is substantial for IT engineering support. Further analysis would require comparing the specific deliverables and labor rates to similar NIH or other federal IT support contracts.

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. With two bidders, the competition level was moderate. While competition is generally beneficial for price, a higher number of bidders often leads to more aggressive pricing and better value for the government. The presence of two bidders suggests that the requirement was specific enough to attract a limited pool of qualified contractors.

Taxpayer Impact: The full and open competition, despite having only two bidders, aimed to secure competitive pricing. Taxpayers benefit from the government's effort to solicit offers from multiple sources, even if the pool of qualified bidders was constrained.

Public Impact

The primary beneficiaries are the National Institutes of Health (NIH) and its research endeavors, which rely on robust IT systems. The services delivered likely encompassed critical IT infrastructure support, systems engineering, and potentially software development or maintenance. The geographic impact is primarily within Maryland, where the NIH is headquartered, and potentially extends to other NIH facilities. The contract supported a workforce of IT professionals and engineers, contributing to the federal IT sector's employment landscape.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed rigorously, as the contractor is reimbursed for all allowable costs plus a fixed fee.
Limited competition (2 bidders) may have resulted in a higher price than if more vendors had participated.
The contract duration of over 5 years (2038 days) could indicate a lack of flexibility to adapt to changing technological needs or market prices.

Positive Signals

Awarded under full and open competition, ensuring a broad solicitation of potential offerors.
The contract supports critical functions for the NIH, a vital agency for health research.
The fixed fee component of the CPFF contract provides a degree of cost certainty for the government once the fee is established.

Sector Analysis

This contract falls within the IT services sector, specifically custom computer programming and systems engineering. The federal IT services market is vast, with agencies like HHS being significant spenders. Comparable spending benchmarks would involve analyzing other large IT support contracts awarded by NIH or other health-focused federal agencies, looking at contract types, durations, and specific service areas to gauge value.

Small Business Impact

The data indicates that small business participation was not a specific set-aside (ss: false, sb: false). This suggests the contract was not specifically targeted towards small businesses, and the prime contractor, ICF Z-TECH, INC., is likely a larger entity. There is no explicit information on subcontracting plans for small businesses within this data snippet, which could be a missed opportunity for small business engagement.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within NIH. The CPFF structure necessitates close monitoring of costs and performance to ensure the fixed fee remains appropriate and that the contractor is delivering on the required systems engineering support. Transparency would be enhanced through contract award databases and potentially through agency reporting on IT investments. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

NIH IT Modernization Efforts
Federal Health IT Services
Custom Computer Programming Services
Systems Engineering Support Contracts
Health Research IT Infrastructure

Risk Flags

Potential for cost overruns due to CPFF contract type.
Limited competition may have impacted price competitiveness.
Contract duration could lead to technological obsolescence if not managed.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $70.1 million to ICF Z-TECH, INC.. IGF::CT::IGF FOR CRITICAL FUNCTIONS - PURPOSE OF AWARD: TO AWARD CONTRACT FOR THE ERA SYSTEMS ENGINEERING SUPPORT SERVICES REQUIREMENT.

Who is the contractor on this award?

The obligated recipient is ICF Z-TECH, INC..

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 $70.1 million.

What is the period of performance?

Start: 2013-06-20. End: 2019-01-18.

What specific systems engineering support was provided under this contract?

The provided data indicates the contract was for 'IGF FOR CRITICAL FUNCTIONS - PURPOSE OF AWARD: TO AWARD CONTRACT FOR THE ERA SYSTEMS ENGINEERING SUPPORT SERVICES REQUIREMENT.' While 'ERA' is not explicitly defined, it likely refers to a specific system or program within the NIH. Systems engineering support typically involves the design, integration, management, and maintenance of complex systems throughout their life cycles. For the NIH, this could include supporting research data management systems, clinical trial platforms, laboratory information systems, or administrative IT infrastructure. The 'critical functions' aspect suggests the services were essential for the agency's core operations and research mission, potentially involving high availability, security, and performance requirements.

How does the $70.1M award value compare to similar NIH IT support contracts?

Comparing the $70.1M award value requires context on the contract's duration and scope. This contract spanned approximately 5.5 years (June 2013 to January 2019), averaging around $12.7M annually. To benchmark effectively, one would need to identify similar NIH contracts for IT systems engineering or custom computer programming services awarded within the same timeframe, with comparable durations and service levels. Factors like the specific technologies supported, the level of security clearance required, and the complexity of the systems would influence pricing. Without access to a detailed database of comparable NIH contracts, a precise value comparison is difficult, but the annual spend suggests a significant investment in critical IT support.

What were the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract?

The primary risk with a CPFF contract is the potential for cost overruns. While the contractor is reimbursed for all allowable costs, the fixed fee is predetermined. If costs escalate significantly beyond initial projections, the government might end up paying more than anticipated, even though the fee remains constant. This necessitates robust oversight to ensure costs are reasonable, allocable, and allowable. Another risk is that the contractor might have less incentive to control costs aggressively compared to a fixed-price contract, as their profit (the fee) is guaranteed regardless of cost efficiency beyond a certain point. Effective management requires diligent tracking of expenditures and performance against the contract's objectives.

What is the significance of the NAICS code 541511 (Custom Computer Programming Services)?

The NAICS code 541511 signifies that the primary service procured under this contract was custom computer programming. This includes activities like designing, developing, and implementing software solutions tailored to the specific needs of the NIH. It can encompass a wide range of services, from creating new applications to modifying existing ones, and often involves system analysis and design. For a research-intensive agency like the NIH, custom programming is crucial for developing specialized tools for data analysis, research management, bioinformatics, and other scientific endeavors that off-the-shelf software cannot adequately address. This code suggests a focus on software development rather than general IT support or hardware procurement.

How did the 'full and open competition' with only two bidders impact the government's negotiating position?

While 'full and open competition' is the preferred method, having only two bidders limits the competitive pressure. Ideally, more bidders would drive down prices through increased rivalry. With only two, the government's negotiating position is stronger than in a sole-source situation but weaker than if there were, for example, five or more qualified bidders. The government could leverage the competition between the two to negotiate favorable terms, but the bidders might have had more leverage than in a highly crowded field. The outcome would depend on the specific capabilities of the two bidders and the government's ability to clearly articulate its requirements and evaluation criteria.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: ICF International, Inc.

Address: 530 GAITHER ROAD, ROCKVILLE, MD, 20850

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

Financial Breakdown

Contract Ceiling: $103,295,287

Exercised Options: $70,146,286

Current Obligation: $70,146,286

Subaward Activity

Number of Subawards: 158

Total Subaward Amount: $33,485,181

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline