HHS awarded $19.7M for analytics services, with a significant portion allocated to a single delivery order

Contract Overview

Contract Amount: $19,696,909 ($19.7M)

Contractor: Truven Health Analytics LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2011-09-30

End Date: 2016-09-29

Contract Duration: 1,826 days

Daily Burn Rate: $10.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 329

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: FY 2011 CFRI C96R361 280-11-0370 CSAT-SAPT BGSA

Place of Performance

Location: ANN ARBOR, WASHTENAW County, MICHIGAN, 48108

State: Michigan Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $19.7 million to TRUVEN HEALTH ANALYTICS LLC for work described as: FY 2011 CFRI C96R361 280-11-0370 CSAT-SAPT BGSA Key points: 1. The contract's value, while substantial, needs to be assessed against the scope of services provided. 2. Competition dynamics for this contract are crucial to understanding price discovery and potential value for money. 3. Performance risk indicators should be monitored given the multi-year duration and cost-plus award fee structure. 4. The contract's performance context is tied to the Substance Abuse and Mental Health Services Administration's (SAMHSA) operational needs. 5. This contract falls within the 'Other Computer Related Services' category, indicating a focus on data analysis and IT support. 6. The significant portion of the contract value represented by a single delivery order warrants scrutiny of its specific objectives and outcomes.

Value Assessment

Rating: fair

The total award amount of $19.7 million over approximately five years suggests a moderate annual spend. Benchmarking this against similar analytics contracts within the federal government, particularly those supporting health and human services agencies, is necessary to determine if the pricing is competitive. The cost-plus award fee structure implies that contractor performance directly influences the final payment, which can incentivize good outcomes but also requires robust oversight to prevent cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The number of bidders (329) is exceptionally high, suggesting a robust and competitive marketplace for these services. This level of competition generally leads to better price discovery and potentially more favorable terms for the government, as contractors vie to win the award.

Taxpayer Impact: A high number of bidders in a full and open competition is a positive signal for taxpayers, as it increases the likelihood that the government secured services at a competitive price and avoided paying a premium due to limited options.

Public Impact

Beneficiaries include the Substance Abuse and Mental Health Services Administration (SAMHSA) and potentially the public through improved data-driven decision-making in mental health and substance abuse programs. Services delivered likely involve data analysis, reporting, and potentially the development of analytical tools to support SAMHSA's mission. The geographic impact is national, as SAMHSA's programs serve individuals across the United States. Workforce implications may include the need for skilled data analysts and IT professionals within the contractor organization and potentially within SAMHSA to manage and utilize the services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus award fee contracts can sometimes lead to higher costs if not managed tightly.
The long duration of the contract (over 1800 days) increases the risk of scope creep or evolving requirements not being adequately addressed.
The sheer volume of bidders (329) might indicate a highly commoditized service, raising questions about the uniqueness of the awarded solution.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process.
A large number of bidders (329) indicates a healthy market and strong interest in serving the government.
The contract aims to provide critical analytics support to a key health agency (SAMHSA).

Sector Analysis

This contract falls under the 'Other Computer Related Services' (NAICS 541519) sector, which encompasses a broad range of IT services beyond custom software development or data processing. The federal market for IT and data analytics services is substantial, with agencies increasingly relying on sophisticated analytical tools to manage programs, identify trends, and improve efficiency. Comparable spending benchmarks would involve looking at other contracts for data analytics, health informatics, and IT consulting services awarded to companies of similar size and scope within the health and human services domain.

Small Business Impact

The data indicates that small business participation was not a primary focus, as the contract was not set aside for small businesses (ss: false, sb: false). While the large number of bidders suggests a competitive environment, it does not inherently guarantee opportunities for small businesses within the prime contract. Subcontracting opportunities for small businesses would depend on the prime contractor's strategy and the specific requirements of the delivery orders issued under this contract.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Health and Human Services, specifically the Substance Abuse and Mental Health Services Administration (SAMHSA). As a cost-plus award fee contract, performance monitoring and evaluation are critical to ensure the contractor meets objectives and earns their award fee. Transparency would be facilitated through contract award databases, and accountability mechanisms would involve contract performance reviews and potential audits by the HHS Office of Inspector General if concerns arise.

Related Government Programs

Federal Health IT Services
Data Analytics and Business Intelligence Services
Health Information Management
SAMHSA Program Support Contracts
IT Consulting Services

Risk Flags

Cost-Plus Award Fee structure requires diligent oversight.
Long contract duration may increase risk of requirement misalignment.
Potential for contractor performance variability impacting award fee.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $19.7 million to TRUVEN HEALTH ANALYTICS LLC. FY 2011 CFRI C96R361 280-11-0370 CSAT-SAPT BGSA

Who is the contractor on this award?

The obligated recipient is TRUVEN HEALTH ANALYTICS LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Substance Abuse and Mental Health Services Administration).

What is the total obligated amount?

The obligated amount is $19.7 million.

What is the period of performance?

Start: 2011-09-30. End: 2016-09-29.

What specific analytics capabilities did TRUVEN HEALTH ANALYTICS LLC provide under this contract?

The provided data indicates the contract falls under NAICS code 541519 (Other Computer Related Services) and was awarded to TRUVEN HEALTH ANALYTICS LLC by the Department of Health and Human Services (HHS) for services to the Substance Abuse and Mental Health Services Administration (SAMHSA). While the specific analytics capabilities are not detailed in the summary data, this NAICS code suggests services related to data analysis, processing, and potentially the development or implementation of analytical tools. Given SAMHSA's mission, these services likely supported program evaluation, trend analysis in substance abuse and mental health, resource allocation optimization, or reporting on public health outcomes. The contract type, Cost Plus Award Fee (CPAF), implies that the contractor's performance against defined objectives would determine a portion of their compensation, suggesting a focus on achieving specific analytical outcomes and quality standards.

How does the $19.7 million award compare to typical spending for similar analytics services at HHS?

The $19.7 million awarded to TRUVEN HEALTH ANALYTICS LLC over approximately five years (from 2011 to 2016) represents an average annual spend of roughly $3.94 million. To benchmark this, one would need to compare it against other HHS contracts for data analytics, health informatics, and IT consulting services awarded during a similar period. Factors such as the specific agency within HHS, the complexity of the analytical requirements, and the duration of the contract are crucial for a fair comparison. Without access to detailed spending data across HHS for comparable services, it's difficult to definitively state if this amount is high or low. However, given the increasing reliance on data analytics in healthcare and public health, this level of investment for a dedicated analytics support contract to an agency like SAMHSA is plausible.

What are the key performance indicators (KPIs) associated with this Cost Plus Award Fee (CPAF) contract?

The provided summary data does not specify the Key Performance Indicators (KPIs) for this Cost Plus Award Fee (CPAF) contract. However, for a CPAF contract, KPIs are typically defined in the contract's Performance Work Statement (PWS) and are designed to measure the contractor's success in meeting critical program objectives. For a contract supporting SAMHSA's analytics needs, potential KPIs could include metrics related to data accuracy, timeliness of reports, development of new analytical models, user satisfaction with analytical tools or outputs, and the impact of the analytics on program decision-making. The 'award fee' portion of the contract is directly tied to the contractor's performance against these KPIs, with predetermined criteria for achieving different levels of award fee.

What is the significance of 329 bidders for a 'full and open competition' contract?

The number of bidders, 329, for this 'full and open competition' contract is exceptionally high and indicates a very robust and competitive marketplace for the services being procured. In a full and open competition, any responsible source can submit an offer. Such a large number of interested parties suggests that the government's requirements were well-defined and accessible to a wide range of potential vendors, or that the contract represented a significant business opportunity. From a taxpayer perspective, a high number of bidders generally leads to more competitive pricing, as vendors must differentiate themselves on both technical merit and cost to win the award. It also increases the likelihood that the government selected the best value solution available.

What is the historical spending trend for analytics services at SAMHSA?

The provided data pertains to a single contract awarded in FY 2011. To understand the historical spending trend for analytics services at SAMHSA, one would need to analyze contract data over multiple fiscal years. This would involve identifying all contracts awarded by SAMHSA for data analytics, IT services, and related support, and then aggregating the spending amounts. Trends could reveal whether SAMHSA's investment in analytics has increased, decreased, or remained stable over time, and whether the types of services procured have evolved. Factors such as changes in agency priorities, technological advancements, and budget allocations would influence these trends.

Industry Classification

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

Product/Service Code: SPECIAL STUDIES/ANALYSIS, NOT R&D › SPECIAL STUDIES - NOT R and D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 283072900

Offers Received: 329

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Truven Health Analytics Inc. (UEI: 110265902)

Address: 777 E EISENHOWER PKWY, ANN ARBOR, MI, 48108

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $23,244,009

Exercised Options: $19,696,909

Current Obligation: $19,696,909

Subaward Activity

Number of Subawards: 25

Total Subaward Amount: $3,404,833

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSS283200700029I

IDV Type: IDC

Timeline