HHS awards $37.1M for digital modernization, with Peraton Inc. leading IT services

Contract Overview

Contract Amount: $37,113,488 ($37.1M)

Contractor: Peraton Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2021-03-02

End Date: 2024-09-29

Contract Duration: 1,307 days

Daily Burn Rate: $28.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: OADC DIGITAL MODERNIZATION

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $37.1 million to PERATON INC. for work described as: OADC DIGITAL MODERNIZATION Key points: 1. Value for money appears fair given the contract's duration and scope. 2. Competition was robust, suggesting potential for competitive pricing. 3. Risk indicators are moderate, with performance context needing closer monitoring. 4. The contract is positioned within the IT services sector, focusing on modernization. 5. Spending aligns with broader government trends in digital transformation.

Value Assessment

Rating: fair

The contract's total value of $37.1 million over approximately 3.5 years suggests a moderate annual spend. Benchmarking against similar IT modernization contracts is challenging without more granular data on specific services delivered. However, the time and materials pricing structure can sometimes lead to cost overruns if not managed tightly. The number of bids received (2) is on the lower side for full and open competition, which might impact the final negotiated price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. However, only two bids were received, which is less than ideal for maximizing price discovery and ensuring the most competitive outcome. While competition existed, the limited number of bidders could suggest potential barriers to entry or a concentrated market for these specific services.

Taxpayer Impact: The presence of competition is beneficial for taxpayers, as it theoretically drives down costs. However, with only two bidders, the savings may not be as significant as they could be with a larger pool of interested parties.

Public Impact

The Centers for Disease Control and Prevention (CDC) benefits from enhanced digital capabilities. Services delivered include computer systems design, crucial for modernizing health data infrastructure. The primary geographic impact is within Virginia, where the contractor is located. Workforce implications include potential for skilled IT professionals to support the modernization effort.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Positive Signals

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on computer systems design services. The federal IT market is vast, with significant spending allocated annually towards modernization and digital transformation initiatives across various agencies. This contract represents a portion of the Department of Health and Human Services' investment in upgrading its technological infrastructure to support its mission, particularly within the CDC. Comparable spending benchmarks would depend on the specific nature of the modernization, but overall IT services spending by the federal government runs into the hundreds of billions annually.

Small Business Impact

The data indicates this contract was not set aside for small businesses, and there is no explicit mention of small business subcontracting requirements. This suggests that the primary award went to a large business, Peraton Inc. The impact on the small business ecosystem is likely minimal unless Peraton actively engages small businesses as subcontractors, which is not detailed in the provided information. Further investigation into subcontracting plans would be needed to assess the full impact.

Oversight & Accountability

Oversight for this contract would primarily reside with the Centers for Disease Control and Prevention (CDC) contracting officers and program managers. Accountability measures are typically embedded within the contract's performance work statement, including deliverables, milestones, and service level agreements. Transparency is facilitated through contract databases like FPDS. The Inspector General for the Department of Health and Human Services would have jurisdiction for audits and investigations if any concerns regarding waste, fraud, or abuse arise.

Related Government Programs

Risk Flags

Tags

it-services, health-it, digital-modernization, hhs, cdc, virginia, full-and-open-competition, time-and-materials, large-business, computer-systems-design

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $37.1 million to PERATON INC.. OADC DIGITAL MODERNIZATION

Who is the contractor on this award?

The obligated recipient is PERATON INC..

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 $37.1 million.

What is the period of performance?

Start: 2021-03-02. End: 2024-09-29.

What is Peraton Inc.'s track record with the federal government, particularly in IT modernization contracts?

Peraton Inc. is a significant federal contractor with a substantial portfolio of IT and technology services contracts across various agencies, including defense, intelligence, and civilian sectors. They have a history of performing large-scale IT modernization, cybersecurity, and mission support services. While specific performance details for this particular HHS contract are not provided, Peraton's overall federal footprint suggests they possess the capacity and experience for such endeavors. However, like any large contractor, their performance can vary across different contracts, and a deeper dive into past performance reviews and any past issues or awards related to similar contracts would provide a more comprehensive picture of their reliability and effectiveness in this domain.

How does the $37.1 million contract value compare to similar digital modernization efforts at HHS or other health agencies?

The $37.1 million contract value for digital modernization over approximately 3.5 years represents a moderate investment. To benchmark effectively, one would need to compare it against contracts for similar scope and complexity within HHS or other health-focused agencies like CMS or NIH. Factors such as the specific systems being modernized (e.g., data warehouses, public health surveillance systems, internal IT infrastructure), the level of customization required, and the duration of the contract are crucial. Without these specifics, a direct comparison is difficult. However, large-scale IT modernization projects within federal health agencies can range from tens of millions to hundreds of millions of dollars, making this contract appear to be within a typical range for a significant, but not agency-wide, modernization effort.

What are the primary risks associated with a Time and Materials (T&M) contract for IT modernization, and how are they mitigated here?

Time and Materials (T&M) contracts carry inherent risks, primarily the potential for cost overruns if not managed diligently, as the government pays for labor hours and materials used. This can lead to unpredictable final costs. For IT modernization, risks include scope creep, inefficient labor, and inflated material costs. Mitigation strategies typically involve robust oversight from the government, including detailed monitoring of labor hours, verification of materials, and strict adherence to the contract's ceiling price. The CDC's program managers and contracting officers would be responsible for ensuring efficient execution and controlling costs. Clear task definitions and regular progress reviews are essential to manage these risks effectively.

What does the limited number of bidders (2) for this full and open competition suggest about the market for these services?

The fact that only two bids were received for a full and open competition suggests several possibilities about the market for these specific computer systems design services for digital modernization. It could indicate a highly concentrated market where only a few companies possess the specialized expertise, security clearances, or past performance required. Alternatively, it might imply that the contract's requirements, duration, or estimated value were not attractive enough to draw a larger pool of bidders, or perhaps the solicitation process itself presented barriers. This limited competition could potentially lead to less aggressive pricing than if there were more bidders vying for the contract, impacting the overall value for taxpayers.

How does this contract align with the CDC's broader goals for data modernization and public health informatics?

This contract directly supports the CDC's critical mission by providing essential computer systems design services for digital modernization. In the realm of public health, modernizing data systems is paramount for effective disease surveillance, outbreak response, research, and public health informatics. Enhanced digital capabilities allow for faster data processing, better data integration from various sources, improved analytics, and more efficient communication of critical health information. By investing in modernization, the CDC aims to strengthen its ability to leverage data for evidence-based decision-making, ultimately improving public health outcomes and preparedness for future health challenges.

Industry Classification

NAICS: Professional, Scientific, and Technical ServicesComputer Systems Design and Related ServicesComputer Systems Design Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONSIT AND TELECOM - IT MANAGEMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 75D301-21-Q-72730

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 12975 WORLDGATE DR STE 7322, HERNDON, VA, 20170

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $37,113,488

Exercised Options: $37,113,488

Current Obligation: $37,113,488

Actual Outlays: $36,691,576

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $1,181,606

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 47QTCK18D0011

IDV Type: GWAC

Timeline

Start Date: 2021-03-02

Current End Date: 2024-09-29

Potential End Date: 2024-09-29 00:00:00

Last Modified: 2024-09-17

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