HHS awards $6.3M sole-source contract for LORENZ ECTD software to LORENZ INTERNATIONAL LLC

Contract Overview

Contract Amount: $6,304,048 ($6.3M)

Contractor: Lorenz International LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2023-01-05

End Date: 2027-01-09

Contract Duration: 1,465 days

Daily Burn Rate: $4.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: LORENZ ECTD SOFTWARE

Place of Performance

Location: PHILADELPHIA, PHILADELPHIA County, PENNSYLVANIA, 19102

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $6.3 million to LORENZ INTERNATIONAL LLC for work described as: LORENZ ECTD SOFTWARE Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price efficiencies. 2. The contract duration of nearly four years suggests a long-term need for the software. 3. Firm Fixed Price contract type offers cost certainty but may limit flexibility. 4. The software publisher NAICS code indicates a specialized market. 5. The contract is managed by the Food and Drug Administration. 6. The contract is a Purchase Order, a less complex award type.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specialized LORENZ ECTD software. Without competitive bids, it's difficult to ascertain if the $6.3 million price represents fair market value. The firm fixed-price structure provides cost predictability for the government, but the absence of competition means there's less pressure on the contractor to offer the most cost-effective solution. Further analysis would require understanding the software's capabilities and comparing it to alternative solutions, if any exist.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning only one vendor, LORENZ INTERNATIONAL LLC, was considered. This approach bypasses the standard competitive bidding process. While sole-source awards can be justified in specific circumstances, such as when a unique product or service is required, they limit the government's ability to explore a wider range of options and potentially secure better pricing through competition.

Taxpayer Impact: The lack of competition means taxpayers may not be benefiting from the most competitive pricing available in the market. Without multiple bids, there's a risk that the awarded price is higher than it would be in a competitive scenario.

Public Impact

The Food and Drug Administration (FDA) will benefit from continued access to the LORENZ ECTD software. This software is crucial for managing electronic regulatory submissions, supporting the FDA's mission to protect public health. The contract's impact is primarily within the federal regulatory sector, specifically for the FDA's operations. The contract supports the operational efficiency of regulatory review processes within the FDA.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings for taxpayers.
Lack of competition may reduce incentives for the contractor to innovate or offer superior service.
Firm Fixed Price contract, while offering cost certainty, might not be the most adaptable pricing model for evolving software needs.

Positive Signals

The contract ensures continuity of a critical software system for the FDA.
Firm Fixed Price provides budget predictability for the agency.
The contractor, LORENZ INTERNATIONAL LLC, is likely a specialized provider with expertise in this niche software.

Sector Analysis

The Software Publishers industry (NAICS 513210) is characterized by companies that develop, publish, and distribute software. This contract falls within the specialized segment of regulatory compliance software, specifically for electronic document management in the pharmaceutical and medical device industries. The market for such specialized software is often concentrated, with a few key players dominating. The value of this contract, while significant in absolute terms, represents a small fraction of the overall federal IT spending, but is critical for the FDA's specific operational needs.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the specialized nature of the LORENZ ECTD software and the sole-source award, it is unlikely that subcontracting opportunities for small businesses would be a primary consideration or requirement within this specific award. Further investigation into the contractor's subcontracting plans, if any, would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

As a Purchase Order, oversight is typically managed through the agency's procurement and contract management systems. The Food and Drug Administration is responsible for monitoring contract performance and ensuring compliance with the terms and conditions. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

FDA IT Modernization Initiatives
Regulatory Submission Software
Electronic Health Records Systems
Federal Software Procurement

Risk Flags

Sole-source award raises concerns about competition and potential overpricing.
Lack of transparency in the procurement process.
Potential for vendor lock-in with specialized software.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $6.3 million to LORENZ INTERNATIONAL LLC. LORENZ ECTD SOFTWARE

Who is the contractor on this award?

The obligated recipient is LORENZ INTERNATIONAL 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 $6.3 million.

What is the period of performance?

Start: 2023-01-05. End: 2027-01-09.

What is the track record of LORENZ INTERNATIONAL LLC with federal contracts, particularly with the FDA?

Information on LORENZ INTERNATIONAL LLC's specific track record with federal contracts, especially with the FDA, is not detailed in the provided data. However, the award of this sole-source contract suggests a pre-existing relationship or a recognized necessity for their specialized software. A deeper dive into federal procurement databases like SAM.gov or FPDS would be required to analyze their past performance, contract values, and any reported issues. Without this historical data, it's difficult to assess their reliability and performance consistency in a federal context. The current award implies they are a known entity capable of meeting the FDA's requirements for this specific software.

How does the $6.3 million cost compare to similar regulatory software contracts within the federal government?

Direct comparison of the $6.3 million cost is difficult without knowing the specific functionalities and scope of the LORENZ ECTD software and comparing it to other federal contracts for similar regulatory submission management systems. The sole-source nature of this award prevents a direct benchmark against competitive bids. However, federal agencies often spend millions on specialized software solutions. To assess value, one would need to identify comparable systems used by other regulatory bodies (e.g., EPA, USDA) and analyze their contract values, durations, and the breadth of services provided. The FDA's specific needs for the LORENZ ECTD software, which is critical for its operations, likely influence its pricing.

What are the primary risks associated with a sole-source award for critical software like LORENZ ECTD?

The primary risks associated with a sole-source award for critical software like LORENZ ECTD include potential overpayment due to lack of competition, reduced incentive for the sole provider to offer competitive pricing or innovate, and vendor lock-in. Taxpayers may bear a higher cost than if the contract were competed. Furthermore, if the sole provider experiences financial difficulties or decides to discontinue the product, the agency could face significant disruption and challenges in finding a replacement. The lack of competitive pressure also means the government has less leverage to negotiate favorable terms or service level improvements over the contract's life.

How effective is the LORENZ ECTD software in supporting the FDA's regulatory submission processes?

The effectiveness of the LORENZ ECTD software in supporting the FDA's regulatory submission processes is implied by the renewal and continuation of this contract, especially given its sole-source nature. The FDA relies on this system for managing electronic submissions, which is a critical function for ensuring public health by facilitating the review of drugs, medical devices, and other regulated products. While specific performance metrics are not provided, the agency's continued investment suggests the software meets its operational requirements. Its role in streamlining the submission process likely contributes to the efficiency and timeliness of regulatory reviews.

What are the historical spending patterns for LORENZ ECTD software or similar systems by the FDA?

Historical spending patterns for LORENZ ECTD software by the FDA are not detailed in the provided data. However, the issuance of a new contract suggests a continuation of previous usage. To understand historical spending, one would need to examine past contract awards for this specific software or comparable systems by the FDA over several fiscal years. Analyzing trends in contract value, duration, and the number of competitive versus sole-source awards would reveal patterns in the agency's procurement strategy and investment in regulatory software. This could indicate whether spending has increased, decreased, or remained stable over time.

What is the potential impact of this contract on the broader market for regulatory compliance software?

This sole-source contract for LORENZ ECTD software by the FDA has a limited direct impact on the broader market for regulatory compliance software. Because it was not competed, it does not stimulate competition among multiple vendors or signal a shift in market demand. However, it reinforces the position of LORENZ INTERNATIONAL LLC as a key provider in this niche. The federal government's reliance on specialized, often proprietary, software solutions can sometimes create barriers to entry for smaller or newer companies. The continued use of LORENZ ECTD suggests it remains a benchmark or a necessary tool for specific regulatory functions within the FDA.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1515 MARKET ST STE 1200, PHILADELPHIA, PA, 19102

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $8,020,453

Exercised Options: $6,304,048

Current Obligation: $6,304,048

Actual Outlays: $4,784,031

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline