HHS awards $24.2M to Luther Consulting for custom programming, with contract ending 2026

Contract Overview

Contract Amount: $24,208,020 ($24.2M)

Contractor: Luther Consulting LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2022-09-29

End Date: 2026-09-28

Contract Duration: 1,460 days

Daily Burn Rate: $16.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: NHM&E DATA SYSTEM

Place of Performance

Location: CARMEL, HAMILTON County, INDIANA, 46032

State: Indiana Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $24.2 million to LUTHER CONSULTING LLC for work described as: NHM&E DATA SYSTEM Key points: 1. Value for money appears fair given the firm fixed-price structure, though detailed cost breakdowns are not publicly available. 2. Competition dynamics indicate a sole-source award, potentially limiting price discovery and innovation. 3. Risk indicators are moderate, with a long duration and a single contractor, but the firm fixed-price contract mitigates some cost overrun risks. 4. Performance context is limited due to the early stage of the contract and lack of public performance metrics. 5. Sector positioning places this contract within the IT services sector, specifically custom computer programming. 6. The contract's value is significant within its specific service niche but represents a small fraction of overall federal IT spending.

Value Assessment

Rating: fair

The contract's value of $24.2 million over four years for custom computer programming services is difficult to benchmark without more detailed cost information. As a sole-source award, direct comparisons to competitively bid contracts are limited. The firm fixed-price (FFP) structure suggests that the contractor bears the risk of cost overruns, which is generally favorable for the government. However, the absence of detailed cost breakdowns or performance metrics makes a definitive value assessment challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities or when circumstances do not permit a competitive process. The lack of competition means that potential cost savings and innovative solutions that might arise from a bidding process were not realized.

Taxpayer Impact: For taxpayers, a sole-source award means there was no opportunity to benefit from competitive pricing, potentially leading to a higher cost than if multiple vendors had vied for the contract.

Public Impact

The primary beneficiary of this contract is the Centers for Disease Control and Prevention (CDC), a division of HHS, which will receive custom computer programming services. These services are expected to support the agency's mission-critical IT infrastructure and data management needs. The geographic impact is primarily within Indiana, where Luther Consulting LLC is based, though the services likely support national public health initiatives. Workforce implications may include employment opportunities for skilled IT professionals within Luther Consulting LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential innovation.
Long contract duration (4 years) increases exposure to potential performance issues or changing technological needs.
Lack of publicly available performance metrics makes it difficult to assess contractor effectiveness.
Firm fixed-price contract, while mitigating cost overruns, could incentivize cutting corners on quality if not properly monitored.

Positive Signals

Firm fixed-price contract shifts cost overrun risk to the contractor.
Contract is with an established entity (Luther Consulting LLC), suggesting some level of prior performance or capability.
Awarded by a major federal agency (HHS/CDC) implies adherence to federal procurement standards.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, specifically custom computer programming. The federal IT services market is vast, with significant annual spending across various agencies. Custom programming is essential for agencies needing tailored software solutions that off-the-shelf products cannot provide. Benchmarks for similar custom programming contracts vary widely based on complexity, duration, and contractor expertise, but a $24.2 million award over four years for specialized services is substantial.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. Luther Consulting LLC is not explicitly identified as a small business in the provided data. Therefore, this award does not appear to directly benefit the small business ecosystem through set-asides or mandated subcontracting.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Centers for Disease Control and Prevention (CDC). Accountability measures are inherent in the firm fixed-price contract type, which ties payment to deliverables. Transparency is limited due to the sole-source nature and the lack of publicly detailed performance metrics. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

HHS IT Modernization Initiatives
CDC Data Management Systems
Federal Custom Software Development Contracts
Health Information Technology Services

Risk Flags

Sole-source award limits competition.
Long contract duration increases risk of obsolescence or changing needs.
Lack of public performance metrics hinders accountability assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $24.2 million to LUTHER CONSULTING LLC. NHM&E DATA SYSTEM

Who is the contractor on this award?

The obligated recipient is LUTHER CONSULTING LLC.

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 $24.2 million.

What is the period of performance?

Start: 2022-09-29. End: 2026-09-28.

What is Luther Consulting LLC's track record with federal contracts, particularly with HHS or CDC?

Information regarding Luther Consulting LLC's specific track record with federal contracts, especially with the Department of Health and Human Services (HHS) or the Centers for Disease Control and Prevention (CDC), is not detailed in the provided data. A comprehensive review would require accessing federal procurement databases like SAM.gov or FPDS to analyze past performance, contract types, values, and any reported issues. Without this historical data, it's challenging to assess their reliability and past success in delivering similar services to government agencies. The current award is a definitive contract, suggesting a level of trust or a specific need that led to this direct award.

How does the $24.2 million contract value compare to similar custom computer programming services procured by the federal government?

Benchmarking the $24.2 million contract value for custom computer programming services is challenging without specific details on the scope of work, complexity, and duration. Federal IT contracts vary significantly. However, for a four-year definitive contract, this value suggests a substantial project. Similar large-scale custom development efforts for agencies like the Department of Defense or other large civilian agencies can range from tens to hundreds of millions of dollars. The firm fixed-price nature implies that the total cost is established upfront, which can be advantageous if the scope is well-defined. Comparisons would ideally be made against contracts with similar service descriptions (e.g., NAICS code 541511) and contract lengths, but the sole-source nature limits direct competitive comparisons.

What are the primary risks associated with a sole-source, firm-fixed-price contract of this duration?

A primary risk of a sole-source contract is the lack of competitive pressure, which can lead to inflated pricing and potentially less innovation compared to a competed contract. For taxpayers, this means a missed opportunity for cost savings. The firm-fixed-price (FFP) structure mitigates the risk of cost overruns for the government, as the contractor is obligated to complete the work for the agreed-upon price. However, if the scope is not perfectly defined, the contractor might face challenges, or conversely, the government might not receive the full value if the scope was underestimated. The long duration (1460 days, approximately 4 years) increases the risk of technological obsolescence, changes in agency requirements, or contractor performance issues over time. Robust oversight and clear performance metrics are crucial to manage these risks.

What specific services will Luther Consulting LLC provide under this contract, and how will their success be measured?

The provided data indicates that Luther Consulting LLC will provide 'Custom Computer Programming Services' (NAICS code 541511) for the Department of Health and Human Services, specifically the Centers for Disease Control and Prevention (CDC). The exact nature of these services—whether they involve developing new software, maintaining existing systems, integrating different platforms, or data analytics—is not specified. Success measurement typically relies on contract deliverables, performance standards, and milestones outlined in the contract's statement of work. As this is a firm-fixed-price contract, meeting these defined requirements within the agreed timeline and budget is the primary measure of success. However, without access to the detailed contract statement of work and performance metrics, a precise assessment of how success will be measured is not possible.

How does this $24.2 million contract fit into the broader spending patterns of the CDC for IT services?

The $24.2 million contract represents a significant, but not necessarily dominant, portion of the CDC's IT spending. The CDC, like many large federal health agencies, relies heavily on IT infrastructure and services to manage vast amounts of public health data, support research, and facilitate communication. Annual IT spending for agencies of this size can easily reach hundreds of millions or even billions of dollars. This specific contract for custom programming services addresses a particular need within the CDC's IT portfolio. Understanding its place requires comparing it to the CDC's total IT budget and other IT contracts awarded for similar or different services (e.g., cloud services, cybersecurity, hardware procurement) over the same period.

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 - IT MANAGEMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 75D301-22-R-72265

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 10435 COMMERCE DR, CARMEL, IN, 46032

Business Categories: Category Business, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $30,335,940

Exercised Options: $24,208,020

Current Obligation: $24,208,020

Actual Outlays: $20,143,100

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline