HHS awards $3.7M contract for FDA's FARM DME modernization, citing limited competition

Contract Overview

Contract Amount: $3,694,083 ($3.7M)

Contractor: Strategamy LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2023-09-18

End Date: 2025-09-28

Contract Duration: 741 days

Daily Burn Rate: $5.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: IT

Official Description: FOOD APPLICATIONS REGULATORY MANAGEMENT (FARM) DEVELOPMENT MODERNIZATION AND ENHANCEMENT (DME)

Place of Performance

Location: COLLEGE PARK, PRINCE GEORGES County, MARYLAND, 20740

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $3.7 million to STRATEGAMY LLC for work described as: FOOD APPLICATIONS REGULATORY MANAGEMENT (FARM) DEVELOPMENT MODERNIZATION AND ENHANCEMENT (DME) Key points: 1. Contract focuses on modernizing critical food safety regulatory systems. 2. Sole-source award raises questions about potential cost efficiencies. 3. Limited competition may impact price discovery and value for money. 4. Contract duration of over two years suggests significant development effort. 5. Geographic focus on Maryland aligns with FDA's operational centers. 6. Modernization aims to enhance the efficiency and effectiveness of food safety oversight.

Value Assessment

Rating: fair

The contract value of $3.7 million for IT modernization services appears moderate for a federal project of this scope. Benchmarking against similar IT development contracts is challenging without more detailed service descriptions. However, the 'NOT AVAILABLE FOR COMPETITION' status suggests that a competitive process was not undertaken, which can sometimes lead to less favorable pricing compared to fully competed efforts. The contract type, 'LABOR HOURS', indicates payment based on effort, requiring careful monitoring to ensure efficiency and prevent cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not publicly competed. The justification for this approach is not provided in the available data. Sole-source awards can be appropriate when only one vendor possesses the necessary specialized skills or when urgency dictates. However, they limit the opportunity for multiple vendors to bid, potentially reducing competitive pressure on pricing and innovation.

Taxpayer Impact: Taxpayers may not benefit from the most competitive pricing due to the lack of a bidding process. This could result in higher costs than if the contract had been open to multiple qualified vendors.

Public Impact

The Food and Drug Administration (FDA) will benefit from modernized regulatory management systems. Consumers will indirectly benefit from enhanced food safety oversight and data management. The project is geographically centered in Maryland, supporting federal IT infrastructure. The contract supports IT professionals and developers involved in system modernization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs.
Sole-source award requires strong justification for value.
Performance monitoring is crucial for labor-hour contracts.

Positive Signals

Addresses critical need for regulatory system modernization.
Focus on food safety aligns with public health priorities.
Contract awarded to a single entity for focused development.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on software development and modernization. The market for federal IT services is vast, with numerous companies offering capabilities in custom software development, cloud migration, and system integration. The FDA's need for regulatory management system enhancement is a common requirement across government agencies aiming to improve data processing, compliance, and operational efficiency. Comparable spending benchmarks for similar IT modernization projects within federal health agencies can vary widely based on complexity and scope.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. The prime contractor, STRATAGEMY LLC, is likely a mid-to-large-sized business given the contract value and nature of the work. The absence of a small business set-aside means opportunities for small business participation are not mandated through this specific award.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Health and Human Services (HHS) and the Food and Drug Administration (FDA) contracting and program offices. Accountability measures will be tied to the contract's performance work statement and milestones. Transparency is facilitated through federal contract databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract's execution.

Related Government Programs

FDA IT Modernization Initiatives
Food Safety Modernization Act (FSMA) Implementation
Federal Health IT Systems Development
Regulatory Compliance Software

Risk Flags

Sole-source award lacks competitive pricing pressure.
Potential for cost overruns in labor-hour contracts.
Limited transparency on justification for sole-source procurement.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $3.7 million to STRATEGAMY LLC. FOOD APPLICATIONS REGULATORY MANAGEMENT (FARM) DEVELOPMENT MODERNIZATION AND ENHANCEMENT (DME)

Who is the contractor on this award?

The obligated recipient is STRATEGAMY LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Food and Drug Administration).

What is the total obligated amount?

The obligated amount is $3.7 million.

What is the period of performance?

Start: 2023-09-18. End: 2025-09-28.

What specific functionalities will the FARM DME modernization enhance for the FDA?

The FARM DME (Food Applications Regulatory Management - Development Modernization and Enhancement) project aims to upgrade the FDA's systems for managing food-related applications and regulations. While specific functionalities are not detailed in the provided data, modernization typically involves improving data capture, processing, analysis, and reporting capabilities. This could include streamlining the submission and review of food product applications, enhancing risk assessment tools for food safety, improving traceability of food products, and facilitating better communication and data sharing among regulatory bodies and stakeholders. The goal is to create a more efficient, robust, and responsive system for overseeing food safety and compliance.

How does the $3.7 million contract value compare to similar FDA IT modernization projects?

Direct comparison of the $3.7 million contract value to similar FDA IT modernization projects is difficult without more granular data on the scope, complexity, and duration of those other projects. Federal IT modernization efforts can range significantly in cost, from hundreds of thousands to tens or hundreds of millions of dollars. However, for a project described as 'development modernization and enhancement' of a regulatory management system, $3.7 million over approximately two years suggests a focused effort, possibly targeting specific modules or functionalities rather than a complete system overhaul. The sole-source nature of this award also complicates direct value-for-money comparisons with competitively bid projects.

What are the primary risks associated with a sole-source IT modernization contract of this nature?

The primary risks associated with a sole-source IT modernization contract include potential lack of competitive pricing, reduced innovation, and vendor lock-in. Without competition, the government may not achieve the best possible price for the services rendered. The absence of multiple bidders can also limit the exposure to diverse technological approaches and innovative solutions that might have been proposed in a competitive environment. Furthermore, relying on a single vendor for a critical system modernization can create dependency, making future transitions or contract renegotiations more complex and potentially costly. Robust oversight and clear performance metrics are essential to mitigate these risks.

What is the expected impact of this modernization on the FDA's ability to enforce food safety regulations?

The modernization of the FARM DME system is expected to significantly enhance the FDA's ability to enforce food safety regulations. By upgrading outdated systems, the FDA can improve its capacity for data analysis, risk identification, and response to food safety issues. Modernized systems often allow for more efficient processing of applications, better tracking of regulated products, and more effective communication channels with industry and consumers. This can lead to quicker identification of potential hazards, more targeted inspections, and a more proactive approach to preventing foodborne illnesses, ultimately strengthening public health protection.

What is STRATAGEMY LLC's track record with federal IT contracts, particularly within HHS or FDA?

Information regarding STRATAGEMY LLC's specific track record with federal IT contracts, particularly within HHS or the FDA, is not detailed in the provided data snippet. To assess their capabilities and past performance, one would typically need to consult federal procurement databases (like FPDS or SAM.gov) for a history of awarded contracts, their values, performance ratings, and any past performance issues. Understanding their experience with similar regulatory modernization projects, their financial stability, and their technical expertise would be crucial for evaluating the risk associated with this sole-source award.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 4071 CANDLE LIGHT DR, DAYTON, MD, 21036

Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $3,694,083

Exercised Options: $3,694,083

Current Obligation: $3,694,083

Actual Outlays: $3,694,083

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline