Deloitte Consulting LLP awarded $69.2M for IT support to Defense Health Agency, impacting EHR systems

Contract Overview

Contract Amount: $69,243,476 ($69.2M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Defense

Start Date: 2016-04-01

End Date: 2021-06-30

Contract Duration: 1,916 days

Daily Burn Rate: $36.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CL::IGF THIS AWARD PROVIDES SERVICES INCLUDING SYSTEMS AND SOFTWARE ENGINEERING, INFORMATION ASSURANCE, ARCHITECTURE, CONFIGURATION MANAGEMENT SUPPORT, REQUIREMENTS DEFINITION AND DERIVATION, SUBJECT MATTER EXPERT (SME) ADVISING, ACQUISITION LIFECYCLE EFFORTS, SYSTEMS INTEGRATION SUPPORT, DEPLOYMENT ACTIVITIES AND OTHER BUSINESS, TECHNICAL AND ADMINISTRATIVE ACTIVITIES SUPPORTING THE CARE AND BENEFITS INTEGRATED SYSTEMS (CBIS) AND ELECTRONIC HEALTH RECORD (EHR) CORE PROGRAM MANAGEMENT OFFICES' PRODUCT-LINES.

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22041

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $69.2 million to DELOITTE CONSULTING LLP for work described as: IGF::CL::IGF THIS AWARD PROVIDES SERVICES INCLUDING SYSTEMS AND SOFTWARE ENGINEERING, INFORMATION ASSURANCE, ARCHITECTURE, CONFIGURATION MANAGEMENT SUPPORT, REQUIREMENTS DEFINITION AND DERIVATION, SUBJECT MATTER EXPERT (SME) ADVISING, ACQUISITION LIFECYCLE EFFORTS, SYSTEMS INTEGR… Key points: 1. Contract focuses on critical IT services for healthcare systems, including EHR and benefits management. 2. Awarded via full and open competition, suggesting a competitive bidding process. 3. Performance period spans over 5 years, indicating a long-term need for these services. 4. Fixed-price contract type may offer cost predictability but could limit flexibility. 5. Services are essential for the modernization and maintenance of veteran healthcare IT infrastructure. 6. Contractor has a significant role in supporting core program management offices for healthcare IT.

Value Assessment

Rating: good

The contract value of $69.2 million over approximately 5 years for IT support services appears reasonable given the scope. Benchmarking against similar IT services contracts for large-scale government systems, particularly in healthcare, suggests this is within a typical range. The fixed-price nature of the contract provides cost certainty for the government, though it requires careful scope definition to avoid change orders. Without specific per-unit cost data, a direct value-for-money assessment is limited, but the duration and critical nature of the systems supported suggest a strategic investment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of multiple bidders (3 indicated) suggests a healthy level of competition, which typically drives better pricing and service offerings. The specific details of the bidding process, such as the number of proposals received and the evaluation criteria, are not provided, but the 'full and open' designation is a positive indicator for price discovery.

Taxpayer Impact: A competitive bidding process generally leads to more favorable pricing for taxpayers by encouraging vendors to offer their best terms. It also ensures that the government selects the most capable and cost-effective solution available in the market.

Public Impact

Veterans and military personnel benefit from improved access to and functionality of electronic health records and care management systems. The Defense Health Agency receives essential IT support for critical healthcare programs, ensuring operational continuity. The contract supports the modernization and maintenance of integrated systems, enhancing the efficiency of healthcare delivery. Workforce implications include the potential for skilled IT professionals to be engaged in supporting vital government healthcare initiatives.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in complex IT projects if not managed tightly.
Reliance on a single contractor for critical IT infrastructure could pose a risk if performance falters.
Ensuring continuous alignment with evolving healthcare IT standards and cybersecurity requirements.

Positive Signals

Awarded through full and open competition, indicating a robust selection process.
Fixed-price contract type provides budget predictability.
Long-term engagement suggests a strategic partnership for critical systems.
Focus on core healthcare IT systems directly impacts service delivery for beneficiaries.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a significant segment of the IT industry focused on providing expertise in system integration, IT consulting, and custom software development. The market for such services supporting federal agencies, particularly in defense and healthcare, is substantial. This contract is a key component of the Defense Health Agency's strategy to manage and enhance its complex IT infrastructure, including its electronic health record systems. Comparable spending benchmarks in this area often involve multi-million dollar awards for system design, integration, and ongoing support for large-scale government IT programs.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded to a major consulting firm, it is unlikely that significant portions would be subcontracted to small businesses unless specifically mandated or strategically pursued by the prime contractor. This suggests limited direct impact on the small business IT ecosystem through this specific award, though the prime contractor's overall subcontracting strategy could still involve small firms.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Health Agency's contracting officers and program managers. The fixed-price nature of the contract implies performance-based oversight to ensure deliverables meet requirements. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Defense Health Agency IT Modernization Programs
Electronic Health Record (EHR) Systems Support
Integrated Healthcare Information Systems
Acquisition Lifecycle Support Services
Systems Engineering and Integration Contracts

Risk Flags

Potential for cybersecurity breaches impacting sensitive health information.
Risk of system downtime affecting critical healthcare services for beneficiaries.
Dependency on contractor performance for essential IT functions.
Challenges in integrating new technologies with legacy systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $69.2 million to DELOITTE CONSULTING LLP. IGF::CL::IGF THIS AWARD PROVIDES SERVICES INCLUDING SYSTEMS AND SOFTWARE ENGINEERING, INFORMATION ASSURANCE, ARCHITECTURE, CONFIGURATION MANAGEMENT SUPPORT, REQUIREMENTS DEFINITION AND DERIVATION, SUBJECT MATTER EXPERT (SME) ADVISING, ACQUISITION LIFECYCLE EFFORTS, SYSTEMS INTEGRATION SUPPORT, DEPLOYMENT ACTIVITIES AND OTHER BUSINESS, TECHNICAL AND ADMINISTRATIVE ACTIVITIES SUPPORTING THE CARE AND BENEFITS INTEGRATED SYSTEMS (CBIS) AND ELECTRONIC HEALTH RECORD (EHR) CORE PROGRAM MANAGEMENT OFFI

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING LLP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Health Agency).

What is the total obligated amount?

The obligated amount is $69.2 million.

What is the period of performance?

Start: 2016-04-01. End: 2021-06-30.

What is Deloitte Consulting LLP's track record with the Defense Health Agency and similar federal healthcare IT contracts?

Deloitte Consulting LLP has a substantial history of performing IT services for various federal agencies, including the Department of Defense and the Department of Veterans Affairs. Their work often involves large-scale system implementations, modernization efforts, and IT consulting. For the Defense Health Agency (DHA), Deloitte has been involved in various capacities, supporting critical health IT infrastructure. Their experience with Electronic Health Record (EHR) systems, such as the Military Health System's (MHS) Genesis, and other integrated health information systems is extensive. This specific contract, valued at approximately $69.2 million, focuses on supporting the Care and Benefits Integrated Systems (CBIS) and EHR Core Program Management Offices. Their track record suggests a capacity to handle complex, high-value IT projects within the federal healthcare domain, though performance specifics and past issues, if any, would require deeper investigation into individual contract performance reports and oversight findings.

How does the $69.2 million award compare to other IT support contracts for similar healthcare systems within the federal government?

The $69.2 million award for IT support services to Deloitte Consulting LLP for the Defense Health Agency's CBIS and EHR systems is a significant but not extraordinary figure within the context of large federal healthcare IT contracts. Contracts for EHR system development, implementation, and sustainment often run into hundreds of millions, or even billions, of dollars over their lifecycle. For instance, major EHR system procurements and overhauls by agencies like the Department of Veterans Affairs (e.g., the Oracle Cerner contract) represent substantially larger investments. However, this $69.2 million award, spanning approximately five years, represents a substantial commitment for ongoing systems and software engineering, information assurance, and related support services. It aligns with the typical scale of contracts for specialized IT support for complex, mission-critical systems within large federal health organizations, reflecting the ongoing need for maintenance, upgrades, and operational support.

What are the primary risks associated with this contract, and how are they mitigated?

Primary risks associated with this IT support contract include potential for scope creep, vendor lock-in, cybersecurity vulnerabilities, and performance issues impacting critical healthcare systems. Scope creep is a common risk in IT projects; mitigation involves rigorous contract management, clear definition of requirements, and a robust change control process. Vendor lock-in can be mitigated by ensuring clear data ownership, interoperability standards, and planning for future transitions. Cybersecurity risks are inherent in healthcare IT; mitigation relies on strict adherence to government security protocols (e.g., NIST standards, HIPAA), regular audits, and proactive threat detection. Performance issues are addressed through the fixed-price contract terms, service level agreements (SLAs), and ongoing monitoring by the Defense Health Agency. The use of a fixed-price contract itself can be a mitigation strategy for cost overruns, provided the scope is well-defined.

How effective is the Defense Health Agency in managing its IT contracts to ensure program effectiveness?

The Defense Health Agency (DHA) employs various mechanisms to manage its IT contracts and ensure program effectiveness. These include the appointment of Contracting Officers' Representatives (CORs) and Technical Point of Contacts (TPOCs) to oversee contractor performance, conduct regular progress reviews, and ensure alignment with technical requirements. The agency utilizes performance metrics and deliverables outlined in the contract to track progress and quality. For critical systems like EHRs, the DHA invests in program management offices (PMOs) staffed with subject matter experts to provide oversight. However, like many large federal agencies, the DHA faces challenges in managing complex, evolving IT landscapes, including integrating disparate systems and adapting to rapid technological changes. Effectiveness can vary depending on the specific program, the clarity of requirements, and the resources allocated for contract oversight. Inspector General reports and GAO audits occasionally highlight areas for improvement in contract management and system effectiveness across the DoD.

What are the historical spending patterns for IT support services at the Defense Health Agency, and how does this award fit?

Historical spending patterns for IT support services at the Defense Health Agency (DHA) show a consistent and significant investment in maintaining and modernizing its complex healthcare IT infrastructure. The DHA manages a vast network of systems, including electronic health records, patient administration, and benefits management platforms, all of which require substantial ongoing IT support. Spending in this category typically includes contracts for system development, integration, cybersecurity, infrastructure management, and specialized software engineering. This $69.2 million award to Deloitte Consulting LLP for supporting the CBIS and EHR Core PMOs fits within these historical patterns as a key component of the DHA's strategy to ensure the operational readiness and enhancement of its core healthcare IT programs. It represents a portion of the overall IT budget dedicated to sustainment and improvement, rather than a completely new or outlier expenditure, reflecting the continuous need for expert IT services in this domain.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HT001115R0001

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Deloitte Touche Tohmatsu Limited

Address: 1919 N LYNN ST, ARLINGTON, VA, 22209

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

Financial Breakdown

Contract Ceiling: $69,243,494

Exercised Options: $69,243,494

Current Obligation: $69,243,476

Actual Outlays: $64,282

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $22,778,653

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS35F0617Y

IDV Type: FSS

Timeline