OPM Spends $21M on Hewitt Associates for Retirement Systems Tech Solution
Contract Overview
Contract Amount: $21,002,796 ($21.0M)
Contractor: Hewitt Associates, Inc.
Awarding Agency: Office of Personnel Management
Start Date: 2006-08-17
End Date: 2009-07-07
Contract Duration: 1,055 days
Daily Burn Rate: $19.9K/day
Competition Type: FOLLOW ON TO COMPETED ACTION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: RETIREMENT SYSTEMS MODERNIZATION DEFINED BENEFITS TECHNOLOGY SOLUTION
Place of Performance
Location: LINCOLNSHIRE, LAKE County, ILLINOIS, 60069
State: Illinois Government Spending
Plain-Language Summary
Office of Personnel Management obligated $21.0 million to HEWITT ASSOCIATES, INC. for work described as: RETIREMENT SYSTEMS MODERNIZATION DEFINED BENEFITS TECHNOLOGY SOLUTION Key points: 1. The contract awarded to Hewitt Associates, Inc. for $21M focuses on modernizing defined benefit retirement systems technology. 2. This is a follow-on to a competed action, suggesting prior competition but not necessarily for this specific task. 3. The primary risk lies in the potential for cost overruns or performance issues in a complex IT modernization project. 4. The sector is IT, specifically focusing on computing infrastructure and data processing services.
Value Assessment
Rating: fair
The award amount of $21M for a 3-year IT modernization project appears within a reasonable range for such complex undertakings. Benchmarking against similar large-scale IT system upgrades would be necessary for a definitive assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: unknown
The contract is a follow-on to a competed action, but the specific competition method for this follow-on is not detailed. This could imply a limited competition or a new competition depending on the nature of the follow-on.
Taxpayer Impact: Taxpayer impact is tied to the value derived from the modernized system and the efficiency gains achieved, balanced against the $21M expenditure.
Public Impact
Modernization of retirement systems could lead to improved efficiency and service for federal retirees. The technology solution may impact the data security and integrity of sensitive retirement information. Successful implementation could reduce long-term operational costs for the Office of Personnel Management.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for scope creep in IT modernization projects.
- Dependence on a single vendor for critical system upgrades.
- Risk of data migration issues and system integration challenges.
Positive Signals
- Follow-on to a competed action suggests a foundation of prior vetting.
- Firm Fixed Price contract type can help control costs if well-defined.
- Modernizing legacy systems addresses potential obsolescence and security risks.
Sector Analysis
The IT sector, particularly in government, often involves large, complex projects for system modernization. Benchmarks for similar projects vary widely based on scope, but $21M for a 3-year modernization is substantial.
Small Business Impact
There is no indication in the provided data whether small businesses were involved in this contract. Large IT modernization projects often involve prime contractors who may subcontract, but direct awards to small businesses are not evident here.
Oversight & Accountability
Oversight would typically be managed by the Office of Personnel Management's contracting officers and program managers. Accountability for performance and cost would be contractually defined, with potential for reviews and audits.
Related Government Programs
- Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
- Office of Personnel Management Contracting
- Office of Personnel Management Programs
Risk Flags
- Potential for vendor lock-in.
- Complexity of integrating new technology with legacy systems.
- Risk of schedule delays impacting modernization goals.
- Ensuring adequate technical expertise within the government for oversight.
Tags
computing-infrastructure-providers-data-, office-of-personnel-management, il, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Office of Personnel Management awarded $21.0 million to HEWITT ASSOCIATES, INC.. RETIREMENT SYSTEMS MODERNIZATION DEFINED BENEFITS TECHNOLOGY SOLUTION
Who is the contractor on this award?
The obligated recipient is HEWITT ASSOCIATES, INC..
Which agency awarded this contract?
Awarding agency: Office of Personnel Management (Office of Personnel Management).
What is the total obligated amount?
The obligated amount is $21.0 million.
What is the period of performance?
Start: 2006-08-17. End: 2009-07-07.
What specific metrics will be used to measure the success and value of the retirement systems modernization technology solution?
Success metrics should focus on quantifiable improvements such as reduced processing times for retirement claims, enhanced data accuracy, improved user satisfaction for both employees and administrators, and demonstrable cost savings in system maintenance and operations. These metrics should be clearly defined in the contract's performance work statement and regularly monitored.
What are the contingency plans if Hewitt Associates, Inc. fails to deliver the technology solution as per the contract requirements?
Contingency plans should include clear contractual clauses for remedies, such as liquidated damages for delays or performance failures. The government should also have options for step-in rights, termination for default, and the ability to transition the work to another contractor. A robust risk management plan should identify potential failure points and outline mitigation strategies.
How will the new technology solution ensure enhanced cybersecurity and data protection for sensitive federal retirement data?
The solution must adhere to all federal cybersecurity mandates, including FISMA, NIST guidelines, and agency-specific security requirements. This involves implementing robust access controls, encryption, regular security audits, vulnerability assessments, and incident response plans. The contractor must demonstrate compliance through certifications and ongoing monitoring to safeguard sensitive retirement data.
Industry Classification
NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: FOLLOW ON TO COMPETED ACTION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: AON Corporation (UEI: 038503546)
Address: MAIL LOC: 100 HALF DAY ROAD, LINCOLNSHIRE, IL, 10
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $289,726,326
Exercised Options: $21,002,796
Current Obligation: $21,002,796
Contract Characteristics
Multi-Year Contract: Yes
Timeline
Start Date: 2006-08-17
Current End Date: 2009-07-07
Potential End Date: 2009-07-07 00:00:00
Last Modified: 2009-08-13
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