VA awards $39M for ECAMS O&M to Acentra Health, citing sole-source justification

Contract Overview

Contract Amount: $39,056,067 ($39.1M)

Contractor: Acentra Health LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-03-23

End Date: 2026-03-18

Contract Duration: 1,091 days

Daily Burn Rate: $35.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: THE CONTRACTOR SHALL PROVIDE OPERATIONS AND MAINTENANCE OM SUPPORT FOR ECAMS AND IMPLEMENT CHANGE REQUESTS WITHIN THE ECAMS SYSTEM. O&M SUPPORT INCLUDES DEFECT RESOLUTION, TECHNICAL SUPPORT, AND INSTALLING SOFTWARE PATCHES/UPGRADES FROM CNSI.

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $39.1 million to ACENTRA HEALTH LLC for work described as: THE CONTRACTOR SHALL PROVIDE OPERATIONS AND MAINTENANCE OM SUPPORT FOR ECAMS AND IMPLEMENT CHANGE REQUESTS WITHIN THE ECAMS SYSTEM. O&M SUPPORT INCLUDES DEFECT RESOLUTION, TECHNICAL SUPPORT, AND INSTALLING SOFTWARE PATCHES/UPGRADES FROM CNSI. Key points: 1. Contract focuses on essential operations and maintenance for the ECAMS system. 2. Acentra Health LLC is the sole awardee, raising questions about competition. 3. The contract duration is over three years, indicating a long-term need. 4. Performance is located in Maryland, suggesting a specific geographic focus. 5. The contract type is Time and Materials, which can pose cost control challenges. 6. This award represents a significant investment in maintaining critical IT infrastructure.

Value Assessment

Rating: fair

The contract value of $39 million over approximately three years for IT operations and maintenance appears to be within a reasonable range for similar government IT support contracts. However, without more detailed breakdowns of labor categories, hours, and specific services, a precise value-for-money assessment is difficult. The Time and Materials (T&M) contract type, while common for O&M, can lead to higher costs if not managed closely, as it reimburses direct labor costs and indirect expenses plus a fee. Benchmarking against industry standards for IT O&M services would require more granular data on the scope of work and required skill sets.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of Veterans Affairs did not conduct a competitive procurement. The justification for this approach is not detailed in the provided data, but sole-source awards are typically made when only one responsible source can provide the required supplies or services. This lack of competition means that potential cost savings that might arise from a bidding process are unlikely to be realized, and it limits the opportunity for other qualified vendors to demonstrate their capabilities.

Taxpayer Impact: Sole-source awards can potentially lead to higher prices for taxpayers compared to competitively bid contracts, as there is no direct price pressure from multiple bidders. It also reduces transparency in the procurement process.

Public Impact

The primary beneficiary is the Department of Veterans Affairs, which will receive continued support for its essential ECAMS IT system. Services delivered include defect resolution, technical support, and software patch/upgrade installation. The geographic impact is focused on Maryland, where the contractor's operations are based. The contract supports IT professionals involved in system maintenance and development.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and potential cost savings.
Time and Materials contract type may lead to cost overruns if not managed effectively.
Lack of detailed performance metrics in the provided data makes outcome assessment challenging.

Positive Signals

Contract ensures continuity of essential IT operations and maintenance for a critical system.
Acentra Health LLC's role in providing O&M suggests established expertise with the ECAMS system.
The contract duration indicates a stable, long-term need for these services.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a significant segment of the federal IT market. This sector encompasses a wide range of services, including custom software development, IT integration, and IT management. Federal spending in this area is consistently high, driven by the need to maintain and modernize complex IT systems across various agencies. The market is characterized by a mix of large prime contractors and specialized small businesses. This specific award for operations and maintenance of a specialized system like ECAMS is typical within the broader IT services landscape.

Small Business Impact

This contract was not awarded to a small business, nor does it appear to include specific small business set-aside provisions based on the provided data. As a sole-source award, there is no indication of subcontracting opportunities being mandated or actively sought from small businesses. This means the direct economic benefit to the small business ecosystem from this particular contract is likely minimal, unless Acentra Health LLC voluntarily engages small businesses for support.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting officers and program managers. The Inspector General's office within the VA would have jurisdiction to investigate any potential fraud, waste, or abuse. Transparency is limited due to the sole-source nature of the award; however, contract modifications, performance reports, and payment data are typically available through federal procurement databases, subject to redactions for proprietary information.

Related Government Programs

IT Operations and Maintenance Services
Computer Systems Design Services
Department of Veterans Affairs IT Modernization Programs
ECAMS System Support Contracts

Risk Flags

Sole-source award
Time and Materials contract type
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $39.1 million to ACENTRA HEALTH LLC. THE CONTRACTOR SHALL PROVIDE OPERATIONS AND MAINTENANCE OM SUPPORT FOR ECAMS AND IMPLEMENT CHANGE REQUESTS WITHIN THE ECAMS SYSTEM. O&M SUPPORT INCLUDES DEFECT RESOLUTION, TECHNICAL SUPPORT, AND INSTALLING SOFTWARE PATCHES/UPGRADES FROM CNSI.

Who is the contractor on this award?

The obligated recipient is ACENTRA HEALTH LLC.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $39.1 million.

What is the period of performance?

Start: 2023-03-23. End: 2026-03-18.

What is the specific justification for awarding this contract on a sole-source basis to Acentra Health LLC?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source procurements are justified under circumstances such as when only one responsible source is available, or in cases of urgent and compelling need where competition is not feasible. For IT services, this could stem from unique proprietary knowledge of the system, specialized skills not readily available elsewhere, or a need to maintain continuity with a contractor already deeply familiar with a complex, mission-critical system like ECAMS. Without the official justification document (e.g., a Justification and Approval - J&A), the exact reasoning remains unknown, but it implies a determination by the VA that competitive bidding was not practicable or in the government's best interest at the time of award.

How does the Time and Materials (T&M) contract type compare to other contract types for IT O&M services in terms of cost-effectiveness?

Time and Materials (T&M) contracts are often used for IT Operations and Maintenance (O&M) when the scope of work is not clearly defined or is expected to change frequently. They reimburse the contractor for direct labor hours at specified rates and for the cost of materials. While flexible, T&M contracts carry a higher risk of cost overruns for the government compared to fixed-price contracts, as the final cost is not predetermined. For IT O&M, a well-defined scope and robust oversight are crucial to manage T&M costs effectively. Fixed-price contracts, or hybrid approaches like Cost-Plus-Fixed-Fee (CPFF), might offer better cost predictability if the requirements can be clearly articulated and remain stable. However, for unpredictable O&M tasks, T&M can be appropriate if managed diligently.

What are the potential risks associated with a sole-source IT O&M contract of this duration?

The primary risk of a sole-source IT O&M contract, especially one spanning over three years, is the lack of competitive pressure to ensure optimal pricing and service quality. Without competition, the contractor may have less incentive to innovate or reduce costs. There's also a risk of vendor lock-in, making it difficult and costly to switch providers in the future. Furthermore, if the contractor's performance falters or their pricing becomes uncompetitive over time, the government has limited recourse without undertaking another sole-source justification or a lengthy competitive re-procurement. The absence of multiple bidders also means less market intelligence is gathered regarding prevailing rates and capabilities.

What is Acentra Health LLC's track record with the Department of Veterans Affairs or similar IT support contracts?

Acentra Health LLC has a history of contracting with the Department of Veterans Affairs (VA), primarily in areas related to healthcare services and IT support. While specific details on their performance for ECAMS O&M are not provided in this data snippet, their continued awards suggest a level of satisfaction or necessity from the VA's perspective. Analyzing their broader contract history, including past performance evaluations and any reported issues on other VA or federal contracts, would provide a more comprehensive understanding of their reliability and capability in delivering IT O&M services. Their presence in the federal contracting space indicates experience with government procurement processes and requirements.

How does the spending on ECAMS O&M compare to other IT O&M contracts within the VA or across the federal government?

The $39 million award for ECAMS O&M over approximately three years is a substantial but not extraordinary amount for a critical IT system's maintenance within a large agency like the VA. Federal IT O&M spending is in the tens of billions annually. For context, similar O&M contracts for large-scale enterprise systems (e.g., financial systems, HR systems, or other mission-critical applications) within agencies like the DoD or HHS can range from tens to hundreds of millions of dollars over similar periods. The specific value is highly dependent on the complexity, user base, and criticality of the system being supported. Without knowing the specific size and complexity of ECAMS, direct comparison is difficult, but it aligns with typical investments in maintaining vital government IT infrastructure.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 36C10B23Q0025

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 1600 TYSONS BLVD, MC LEAN, VA, 22102

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $50,866,893

Exercised Options: $39,056,067

Current Obligation: $39,056,067

Actual Outlays: $28,162,299

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline