HHS awards $43.7M to Deloitte for VAMS software, a sole-source contract with significant duration

Contract Overview

Contract Amount: $43,717,411 ($43.7M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Health and Human Services

Start Date: 2020-12-14

End Date: 2023-06-10

Contract Duration: 908 days

Daily Burn Rate: $48.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: VAMS

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $43.7 million to DELOITTE CONSULTING LLP for work described as: VAMS Key points: 1. The contract's value of $43.7 million over its 908-day duration suggests a substantial investment in software development or maintenance. 2. As a sole-source award, the absence of competitive bidding raises questions about potential price overruns and the best value achieved. 3. The 'Time and Materials' contract type can lead to cost uncertainty if not closely managed, potentially increasing the final expenditure. 4. Deloitte's role as the sole contractor indicates a deep integration or specialized knowledge required for the VAMS system. 5. The contract's performance period spans over two years, suggesting a long-term need for the services provided. 6. The lack of small business subcontracting requirements (sb: false) may limit opportunities for smaller firms in this engagement.

Value Assessment

Rating: questionable

Benchmarking the value of this $43.7 million contract is challenging without comparable sole-source awards for similar software systems. The 'Time and Materials' pricing structure, while common, offers less price certainty than fixed-price contracts. Without competitive bids, it's difficult to definitively assess if the pricing reflects fair market value or if taxpayers received the best possible deal. The significant duration of the contract (908 days) also means the total cost could escalate if not meticulously managed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one vendor possesses the necessary qualifications, technology, or is the incumbent with critical system knowledge. The lack of competition means there was no opportunity for multiple bidders to offer proposals, which could have driven down prices and spurred innovation. This approach bypasses the standard procurement process designed to ensure the government receives the most advantageous offer.

Taxpayer Impact: Sole-source awards limit price discovery and can potentially lead to higher costs for taxpayers compared to competitively bid contracts. The absence of competition means taxpayers may not benefit from the cost savings that can arise from a robust bidding process.

Public Impact

The primary beneficiaries are likely the Centers for Disease Control and Prevention (CDC) and potentially other Department of Health and Human Services (HHS) agencies relying on the VAMS software. The services delivered are related to software development, maintenance, or support, crucial for managing health-related data or programs. The geographic impact is primarily national, supporting federal health initiatives, though specific user locations are not detailed. Workforce implications include the employment of IT professionals and subject matter experts by Deloitte to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential value for money.
Time and Materials contract type introduces cost uncertainty and potential for overruns.
Lack of transparency in the justification for sole-source procurement.
Extended contract duration may indicate potential for scope creep or evolving requirements.
No explicit small business subcontracting goals noted.

Positive Signals

Award to a known entity (Deloitte) may ensure continuity of service.
Contract addresses a specific need within HHS/CDC for the VAMS system.
Definitive contract type provides a clear framework for the engagement.
Performance period is defined, allowing for planning and resource allocation.

Sector Analysis

The Information Technology sector, specifically software publishers and IT services, is a significant area of federal spending. Contracts like this, supporting critical government functions, are common. The market for specialized health IT solutions is robust, with large consulting firms often securing these types of awards due to their established presence and expertise. Comparable spending benchmarks for large-scale software development and maintenance contracts within federal health agencies can range from tens to hundreds of millions of dollars.

Small Business Impact

This contract does not appear to have specific small business set-aside provisions (ss: false, sb: false). As a sole-source award to a large prime contractor, Deloitte Consulting LLP, the opportunities for small businesses would likely be limited to subcontracting roles, if any are planned by the prime. Without explicit subcontracting goals or requirements, the direct impact on the small business ecosystem for this specific contract is likely minimal, though Deloitte may engage small businesses based on their own procurement strategies.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Health and Human Services (HHS) and the Centers for Disease Control and Prevention (CDC). As a definitive contract, it is subject to standard federal procurement regulations and oversight. Transparency regarding the justification for the sole-source award and ongoing performance monitoring would be key accountability measures. The HHS Office of Inspector General (OIG) would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

HHS IT Modernization Initiatives
CDC Health Data Management Systems
Federal Health Information Technology Contracts
Software Development and Maintenance Services
Sole-Source IT Procurements

Risk Flags

Sole-source award lacks competitive justification.
Time and Materials pricing increases cost uncertainty.
Extended contract duration poses risks of scope creep and obsolescence.
Lack of explicit small business subcontracting requirements.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $43.7 million to DELOITTE CONSULTING LLP. VAMS

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING LLP.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Disease Control and Prevention).

What is the total obligated amount?

The obligated amount is $43.7 million.

What is the period of performance?

Start: 2020-12-14. End: 2023-06-10.

What is the specific functionality and purpose of the VAMS software system?

The provided data does not specify the exact functionality of the VAMS (Vaccine Adverse Event Monitoring System) software. However, given the awarding agency (CDC) and the context of health IT, it is highly probable that VAMS is a system designed for collecting, processing, analyzing, and reporting data related to vaccine adverse events. Such systems are critical for public health surveillance, pharmacovigilance, and ensuring the safety and efficacy of vaccines. The substantial contract value suggests a complex system with significant data handling, user interface, and reporting capabilities, potentially supporting a large user base across federal health agencies.

What was the justification for awarding this contract on a sole-source basis?

The data indicates this contract was awarded as 'NOT COMPETED' (sole-source). Federal procurement regulations allow for sole-source awards under specific circumstances, such as when only one responsible source is available or possesses unique capabilities, or in cases of urgent need where competition is not feasible. For a contract valued at $43.7 million with a duration of 908 days, the justification would typically need to be robust and publicly documented, often involving a Justification and Approval (J&A) document. Common reasons include the contractor possessing unique intellectual property, being the sole provider of essential maintenance for an existing system, or having critical, specialized expertise developed over time that cannot be readily replicated by other firms within the required timeframe.

How does the 'Time and Materials' contract type impact cost control and value for money?

The 'Time and Materials' (T&M) contract type, used here, obligates the government to pay the contractor for direct labor hours at specified hourly rates and for the actual cost of materials. While flexible and useful when the scope of work is not clearly defined or is expected to change, T&M contracts carry inherent risks for cost control. Unlike fixed-price contracts, there is no ceiling on the total cost, making it susceptible to cost overruns if not managed diligently. Value for money can be compromised if labor hours are inefficiently used or if rates are not competitive. Effective oversight, detailed tracking of hours and costs, and clear task orders are crucial to mitigate these risks and ensure the government receives fair value.

What is Deloitte Consulting LLP's track record with similar federal health IT contracts?

Deloitte Consulting LLP is a major federal contractor with a significant presence across various government agencies, including the Department of Health and Human Services (HHS). They have a well-documented history of performing large-scale IT services, including software development, system integration, and data management, particularly within the healthcare sector. While this specific data point doesn't detail their past performance on VAMS or identical systems, Deloitte's extensive experience in federal health IT suggests they possess the organizational capacity and technical expertise to manage complex projects. Their track record typically involves managing multi-million dollar contracts, navigating federal regulations, and delivering solutions for public health initiatives.

Are there any comparable federal spending benchmarks for similar software systems or services?

Directly comparable benchmarks for the VAMS software are difficult to establish without knowing its precise technical specifications and scope. However, federal spending on health IT systems, particularly those involving data management, surveillance, and electronic health records (EHRs), is substantial. For instance, contracts for developing or maintaining large-scale IT infrastructure or specialized software solutions within agencies like HHS, CMS, or NIH often range from tens to hundreds of millions of dollars over several years. The $43.7 million awarded to Deloitte over approximately two years ($~18M/year) falls within the mid-to-high range for specialized federal IT services, especially considering the sole-source nature and potential complexity of a public health surveillance system.

What are the potential risks associated with the long duration (908 days) of this contract?

The 908-day duration (approximately 2.5 years) of this contract presents several potential risks. Firstly, it increases the likelihood of scope creep, where requirements may evolve significantly over the performance period, potentially leading to cost increases if not managed through contract modifications. Secondly, a longer duration in a 'Time and Materials' contract amplifies the risk of cost overruns, as inefficiencies or extended labor can accumulate over a longer period. Thirdly, technology and user needs can change rapidly; a long-term contract might result in the system becoming outdated or less aligned with current requirements by its end date if not actively managed and updated. Finally, it ties up significant funding for an extended period, potentially limiting flexibility for future investments or alternative solutions.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 75D301-21-R-71742

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

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: $43,717,411

Exercised Options: $43,717,411

Current Obligation: $43,717,411

Actual Outlays: $36,409,530

Subaward Activity

Number of Subawards: 24

Total Subaward Amount: $3,806,438

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline