OPM Awards $39.3M Contract to Deloitte for Postal Service Health Benefits System

Contract Overview

Contract Amount: $39,275,412 ($39.3M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Office of Personnel Management

Start Date: 2023-07-17

End Date: 2025-08-20

Contract Duration: 765 days

Daily Burn Rate: $51.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: POSTAL SERVICE HEALTH BENEFIT SYSTEM-CONTRACTOR WILL WORK WITH OPM TO DEVELOP AND DELIVER A POSTAL SERVICE HEATH BENEFITS SYSTEM USING SCALABLE, FLEXIBLE TECHNOLOGY THAT ENABLES OPM TO POTENTIALLY SERVICE APPROXIMATELY 6.5 MILLION FEDERAL EMPLOYEES,

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Office of Personnel Management obligated $39.3 million to DELOITTE CONSULTING LLP for work described as: POSTAL SERVICE HEALTH BENEFIT SYSTEM-CONTRACTOR WILL WORK WITH OPM TO DEVELOP AND DELIVER A POSTAL SERVICE HEATH BENEFITS SYSTEM USING SCALABLE, FLEXIBLE TECHNOLOGY THAT ENABLES OPM TO POTENTIALLY SERVICE APPROXIMATELY 6.5 MILLION FEDERAL EMPLOYEES, Key points: 1. The contract aims to develop a scalable and flexible health benefits system for approximately 6.5 million federal employees. 2. Deloitte Consulting LLP is the contractor, with the Office of Personnel Management (OPM) as the agency. 3. The contract was awarded under full and open competition. 4. The system will utilize custom computer programming services. 5. The contract duration is 765 days, ending August 20, 2025.

Value Assessment

Rating: good

The contract value of $39.3 million for a 765-day development period appears reasonable for a complex system involving 6.5 million potential users. Benchmarking against similar large-scale federal IT system development projects would provide further context.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, suggesting a robust process for selecting the best offer. This method generally promotes competitive pricing and ensures value for taxpayer money.

Taxpayer Impact: The competitive award process is expected to yield fair pricing, maximizing the value of taxpayer funds invested in this critical health benefits system.

Public Impact

Federal employees will benefit from a modernized and potentially more efficient health benefits system. The development of a scalable technology infrastructure could lead to long-term cost savings for the government. Improved system functionality may enhance user experience and reduce administrative burdens for OPM. The project's success hinges on effective collaboration between Deloitte and OPM. The system's flexibility is key to adapting to future changes in federal employee benefits.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in a large-scale system development.
Dependence on contractor expertise for critical system functionality.
Ensuring data security and privacy for millions of federal employees.

Positive Signals

Awarded through full and open competition.
Focus on scalable and flexible technology.
Clear objective to service a large federal employee population.

Sector Analysis

This contract falls within the IT services sector, specifically custom computer programming. Spending in this area is substantial across government, with significant investments in modernizing legacy systems and developing new digital platforms to improve service delivery.

Small Business Impact

The data indicates this contract was not set aside for small businesses and was awarded to Deloitte Consulting LLP, a large business. There is no explicit mention of small business participation in the provided details.

Oversight & Accountability

OPM is responsible for overseeing the development and delivery of this system. The contract's success will depend on OPM's diligent oversight, performance monitoring, and adherence to federal procurement regulations.

Related Government Programs

Custom Computer Programming Services
Office of Personnel Management Contracting
Office of Personnel Management Programs

Risk Flags

Large contract value requires diligent oversight.
Complexity of developing a system for 6.5 million users.
Potential for integration challenges with existing federal systems.
Reliance on contractor for critical IT infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Office of Personnel Management awarded $39.3 million to DELOITTE CONSULTING LLP. POSTAL SERVICE HEALTH BENEFIT SYSTEM-CONTRACTOR WILL WORK WITH OPM TO DEVELOP AND DELIVER A POSTAL SERVICE HEATH BENEFITS SYSTEM USING SCALABLE, FLEXIBLE TECHNOLOGY THAT ENABLES OPM TO POTENTIALLY SERVICE APPROXIMATELY 6.5 MILLION FEDERAL EMPLOYEES,

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING LLP.

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 $39.3 million.

What is the period of performance?

Start: 2023-07-17. End: 2025-08-20.

What are the key performance indicators (KPIs) OPM will use to measure the success of the Postal Service Health Benefits System development and delivery?

OPM will likely establish KPIs focused on system functionality, performance, user adoption rates, data accuracy, security compliance, and adherence to project timelines and budget. Specific metrics might include system uptime, response times, successful transaction rates, and the number of bugs or issues reported post-launch. Regular progress reviews and milestone achievements will also be critical indicators of success.

What are the primary risks associated with developing a new health benefits system for 6.5 million federal employees, and how are they being mitigated?

Key risks include technical challenges in building a scalable and secure platform, potential delays impacting employee access to benefits, and cost overruns. Mitigation strategies likely involve robust project management, phased development with iterative testing, strong cybersecurity protocols, and clear communication channels between Deloitte and OPM. Contingency planning for unforeseen issues is also crucial.

How will the 'scalable, flexible technology' requirement ensure long-term cost-effectiveness and adaptability for the Postal Service Health Benefits System?

Scalable technology allows the system to handle increasing user loads and data volumes without performance degradation, preventing costly upgrades later. Flexibility enables easier integration of new features, compliance with evolving regulations, and adaptation to changing benefit structures without requiring a complete system overhaul. This reduces long-term maintenance costs and extends the system's useful life.

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 › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 24322623R0004

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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: $39,275,412

Exercised Options: $39,275,412

Current Obligation: $39,275,412

Actual Outlays: $39,275,333

Subaward Activity

Number of Subawards: 14

Total Subaward Amount: $8,464,453

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 24322623D0018

IDV Type: IDC

Timeline