VA awards $2.5M EHRM Design contract to SPEES LLC, a definitive contract with a firm fixed price

Contract Overview

Contract Amount: $2,520,877 ($2.5M)

Contractor: Spees LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-09-01

End Date: 2026-09-30

Contract Duration: 1,125 days

Daily Burn Rate: $2.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EHRM DESIGN

Place of Performance

Location: BALTIMORE, BALTIMORE CITY County, MARYLAND, 21201

State: Maryland Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $2.5 million to SPEES LLC for work described as: EHRM DESIGN Key points: 1. Contract awarded to SPEES LLC for Engineering Services related to EHRM Design. 2. The contract is a definitive contract with a firm fixed price structure. 3. Awarded by the Department of Veterans Affairs, with the VA also serving as the specific agency. 4. The contract duration is 1125 days, spanning from September 1, 2023, to September 30, 2026. 5. The North American Industry Classification System (NAICS) code is 541330, indicating Engineering Services. 6. The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'.

Value Assessment

Rating: fair

The contract value of $2.5 million for EHRM Design services appears to be within a reasonable range for specialized engineering services. However, without specific benchmarks for EHRM design projects or detailed scope of work, a precise value-for-money assessment is challenging. Comparing this to similar, smaller-scale design contracts or projects with comparable complexity would provide better context. The firm fixed-price nature suggests that cost overruns are primarily the contractor's responsibility, which is a positive indicator for cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'. This indicates that while the competition was intended to be open, certain sources were excluded, potentially limiting the pool of bidders. The specific reasons for exclusion are not detailed, but this procurement method can sometimes lead to less competitive pricing compared to unrestricted full and open competition. Further details on the number of bidders and the justification for source exclusion would be needed for a comprehensive analysis.

Taxpayer Impact: The limited competition may mean that taxpayers did not benefit from the lowest possible price that could have been achieved through broader market engagement. The exclusion of certain sources warrants scrutiny to ensure fair and efficient use of taxpayer funds.

Public Impact

The primary beneficiary of this contract is the Department of Veterans Affairs, which will receive design services for its Electronic Health Record Modernization (EHRM) program. The services delivered will focus on the engineering and design aspects of the EHRM system, crucial for its successful implementation and functionality. The geographic impact is likely nationwide, as the EHRM system is intended for use across all VA facilities. Workforce implications may include the need for specialized engineering and design talent, potentially sourced by SPEES LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition due to exclusion of sources could impact price competitiveness.
The complexity of EHRM systems presents inherent risks in design and implementation.
Dependence on a single contractor for critical design phases requires robust oversight.

Positive Signals

Firm fixed-price contract structure shifts cost risk to the contractor.
The contract is awarded to a single entity, potentially streamlining communication and project management.
The duration of the contract allows for focused development and refinement of EHRM design.

Sector Analysis

The healthcare IT sector, particularly within the federal government, is characterized by large, complex, and often long-term modernization efforts. The EHRM program is a significant undertaking for the VA, aiming to replace its legacy system with a modern, integrated platform. Spending in this sector is substantial, driven by the need for interoperability, enhanced patient care, and data security. This contract fits within the broader strategy of upgrading critical healthcare infrastructure.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is also no explicit mention of subcontracting goals for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, unless SPEES LLC voluntarily engages small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract will primarily fall under the Department of Veterans Affairs' contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract, requiring SPEES LLC to deliver specified design services within the agreed-upon price. Transparency would be enhanced by public reporting on project milestones and any challenges encountered. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Electronic Health Record Modernization (EHRM)
Department of Veterans Affairs IT Modernization Programs
Federal Health IT Contracts
Engineering Services for Government Systems

Risk Flags

Limited competition procurement method.
Potential for scope creep in complex IT design projects.
Reliance on contractor for critical design phase.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $2.5 million to SPEES LLC. EHRM DESIGN

Who is the contractor on this award?

The obligated recipient is SPEES 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 $2.5 million.

What is the period of performance?

Start: 2023-09-01. End: 2026-09-30.

What is the track record of SPEES LLC in delivering similar EHRM design services to federal agencies?

Information regarding SPEES LLC's specific track record in delivering Electronic Health Record Modernization (EHRM) design services to federal agencies is not readily available in the provided data. A comprehensive assessment would require reviewing past performance evaluations, contract history, and client testimonials. Federal procurement databases and contractor performance systems (like the Contractor Performance Assessment Reporting System - CPARS) would be the primary sources for this information. Without this data, it's difficult to gauge their experience and success rate with projects of similar scale and complexity. It is crucial for the VA to have thoroughly vetted SPEES LLC's capabilities and past performance before awarding this significant contract.

How does the $2.5 million contract value compare to industry benchmarks for EHRM design services?

Benchmarking the $2.5 million contract value for EHRM design services against industry standards is challenging without detailed project scope and deliverables. EHRM projects are highly complex and vary significantly in cost based on the size of the organization, the specific modules being designed, integration requirements, and the level of customization. For a definitive contract of this nature, the value is likely determined by negotiated rates and estimated effort. A more accurate comparison would involve analyzing the number of labor hours, the types of expertise required (e.g., systems architects, UX designers, clinical informaticists), and the duration of the design phase. The VA's internal cost estimates and historical data on similar design contracts would provide the most relevant benchmarks.

What are the primary risks associated with this EHRM design contract for the VA?

The primary risks associated with this EHRM design contract for the VA include scope creep, where the project's requirements expand beyond the initial agreement, potentially leading to cost overruns or delays despite the firm fixed-price structure. Technical risks involve the inherent complexity of designing a large-scale health record system, ensuring interoperability with existing VA systems, and addressing cybersecurity vulnerabilities. Contractor performance risk is also present; SPEES LLC may face challenges in meeting deadlines, quality standards, or retaining key personnel. Furthermore, the 'limited' competition aspect raises concerns about potential price inefficiencies and the risk of not selecting the most capable vendor if the exclusion criteria were not robustly justified.

What is the expected effectiveness of the EHRM design services to be delivered by SPEES LLC?

The expected effectiveness of the EHRM design services hinges on SPEES LLC's ability to translate the VA's complex requirements into a functional, user-friendly, and secure design blueprint. Success will be measured by the clarity and completeness of the design documentation, its adherence to federal health IT standards (like FHIR), and its ability to facilitate a smooth transition to the subsequent development and implementation phases. An effective design should anticipate potential user challenges, ensure seamless data flow, and support the VA's mission of providing high-quality care to veterans. The firm fixed-price nature incentivizes SPEES LLC to deliver efficiently, but the ultimate effectiveness will be judged during the system's implementation and operational use.

How does this $2.5 million contract fit into the VA's overall EHRM modernization spending patterns?

This $2.5 million contract for EHRM design represents a specific, early-stage component within the VA's much larger Electronic Health Record Modernization (EHRM) program. The overall EHRM initiative has been a multi-billion dollar endeavor, encompassing software procurement, hardware upgrades, extensive training, and ongoing maintenance. This particular award focuses on the foundational design phase, which is critical but constitutes a relatively small fraction of the total program cost. Analyzing this contract in isolation provides limited insight into the VA's total EHRM spending; a broader analysis would require examining the full lifecycle costs, including subsequent development, implementation, and sustainment contracts awarded over many years.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - CONSTRUCTION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: ARCHITECT-ENGINEER FAR 6.102

Solicitation ID: 36C77623R0010

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Spees-Hernandez JV LLC

Address: 23830 PACIFIC HWY S STE 203, KENT, WA, 98032

Business Categories: Category Business, Limited Liability Corporation, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Sole Proprietorship, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $2,918,841

Exercised Options: $2,520,877

Current Obligation: $2,520,877

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline