CMS's $31.9M contract with MITRE for health IT transition planning and execution shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $31,947,866 ($31.9M)

Contractor: THE Mitre Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2019-09-27

End Date: 2023-12-31

Contract Duration: 1,556 days

Daily Burn Rate: $20.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Healthcare

Official Description: TRANSITION PLANNING AND EXECUTION OF THE FFE EIPM TO INCOMING CONTRACTORS, PERFORMING TECHNICAL RESEARCH, ANALYSIS, DESIGN, AND PILOTS FOR STATE-BASED EXCHANGE (SBE) EIPMS, AND ASSISTING WITH GENERAL EIPM PROGRAM MANAGEMENT, INCLUDING ACQUISITION AND

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $31.9 million to THE MITRE CORPORATION for work described as: TRANSITION PLANNING AND EXECUTION OF THE FFE EIPM TO INCOMING CONTRACTORS, PERFORMING TECHNICAL RESEARCH, ANALYSIS, DESIGN, AND PILOTS FOR STATE-BASED EXCHANGE (SBE) EIPMS, AND ASSISTING WITH GENERAL EIPM PROGRAM MANAGEMENT, INCLUDING ACQUISITION AND Key points: 1. The contract's value appears reasonable given the complexity of transitioning critical health IT systems. 2. Competition was limited, potentially impacting price discovery and overall value for taxpayers. 3. Performance risks are moderate, with a focus on technical research and program management. 4. This contract supports the Centers for Medicare and Medicaid Services' (CMS) ongoing efforts to modernize health IT infrastructure. 5. The sector is characterized by complex, long-term IT development and maintenance contracts.

Value Assessment

Rating: fair

The total award amount of $31.9 million over approximately four years suggests a moderate annual spend for specialized IT services. Benchmarking against similar contracts for health IT transition planning and technical research is challenging without more granular data on specific deliverables. However, the cost-plus-fixed-fee structure implies that while the contractor is reimbursed for costs, a fixed fee is applied, which can offer some cost control. The absence of significant cost overruns or performance issues reported suggests a generally fair, though not exceptional, value proposition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. However, the data does not specify the number of bids received. A full and open competition is generally preferred as it allows for a wider range of potential contractors to participate, fostering a more competitive environment that can lead to better pricing and innovation. The specific details of the bidding process would be needed to fully assess the effectiveness of the competition.

Taxpayer Impact: Full and open competition is the most advantageous for taxpayers as it maximizes the potential for competitive pricing and ensures that the government receives the best possible value by considering all qualified sources.

Public Impact

Beneficiaries include federal agencies and potentially state-based health insurance exchanges that rely on the Exchange Information and Program Management (EIPM) systems. Services delivered include technical research, analysis, design, pilot programs, and general program management for health IT systems. The geographic impact is primarily national, supporting federal health IT initiatives. Workforce implications include the need for specialized IT professionals in areas like system transition, research, and program management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition could lead to higher costs than a more robust bidding process.
The complexity of transitioning health IT systems presents inherent performance risks.
Reliance on a single contractor for critical transition planning may create vendor lock-in.

Positive Signals

The contractor, MITRE, is a well-established organization with a strong track record in government IT services.
The contract's duration and scope suggest a strategic, long-term approach to health IT modernization.
The use of full and open competition, even if details are sparse, is a positive indicator.

Sector Analysis

The health IT sector is a significant and growing area of federal spending, driven by the need for interoperability, data security, and modernization of healthcare systems. Contracts in this space often involve complex software development, system integration, and data management. The total federal spending on IT services is in the hundreds of billions annually, with healthcare being a major sub-sector. This contract fits within the broader category of professional, scientific, and technical services supporting government IT infrastructure.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside (ss: false, sb: false). This suggests that the primary focus was on securing the best technical solution from any qualified source, rather than specifically promoting small business involvement. While MITRE is a large organization, there may be opportunities for small businesses to participate as subcontractors. However, without specific subcontracting plans or goals outlined in the award data, the direct impact on the small business ecosystem is likely minimal for this particular contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Centers for Medicare and Medicaid Services (CMS) program officials and contracting officers. The contract type (Cost Plus Fixed Fee) often involves detailed reporting requirements and audits to ensure costs are reasonable and allocable. Transparency is generally maintained through contract award databases and public reporting mechanisms. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Health Insurance Marketplace IT Systems
Federal Health IT Modernization Programs
Healthcare Data Exchange Initiatives
CMS IT Acquisition and Support Services

Risk Flags

Potential for cost overruns due to Cost Plus Fixed Fee structure if not closely monitored.
Risk of vendor lock-in if transition planning is overly prescriptive.
Dependency on contractor expertise for critical system transitions.
Ensuring data security and integrity during system handoffs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $31.9 million to THE MITRE CORPORATION. TRANSITION PLANNING AND EXECUTION OF THE FFE EIPM TO INCOMING CONTRACTORS, PERFORMING TECHNICAL RESEARCH, ANALYSIS, DESIGN, AND PILOTS FOR STATE-BASED EXCHANGE (SBE) EIPMS, AND ASSISTING WITH GENERAL EIPM PROGRAM MANAGEMENT, INCLUDING ACQUISITION AND

Who is the contractor on this award?

The obligated recipient is THE MITRE CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Medicare and Medicaid Services).

What is the total obligated amount?

The obligated amount is $31.9 million.

What is the period of performance?

Start: 2019-09-27. End: 2023-12-31.

What is MITRE's track record with similar health IT transition contracts for federal agencies?

The MITRE Corporation has a long-standing history of supporting federal agencies, including the Department of Health and Human Services (HHS) and its various components like CMS, with complex technical research, systems engineering, and program management. They are known for their work on large-scale IT initiatives and often operate as a federally funded research and development center (FFRDC). While specific details on 'transition planning' contracts for EIPM systems are not publicly detailed in this award, MITRE's general expertise in managing complex technical programs and providing objective analysis makes them a suitable contractor for such tasks. Their extensive experience suggests a strong capability to handle the technical research, analysis, design, and pilot aspects of this contract.

How does the value of this contract compare to similar health IT transition projects?

Direct comparison of the $31.9 million award value for this specific contract is difficult without access to detailed cost breakdowns and the scope of work for comparable projects. Health IT transition projects can vary significantly in complexity, duration, and the specific systems involved. However, considering the duration of over four years and the nature of the work (technical research, analysis, design, pilots, program management for critical EIPM systems), the annual average spend of approximately $7.5 million appears within a reasonable range for specialized IT services supporting a federal agency of CMS's size and importance. Benchmarking would ideally involve comparing the cost per deliverable or per FTE against industry standards for similar technical services.

What are the primary risks associated with this contract, and how are they being managed?

The primary risks associated with this contract likely revolve around the technical complexity of transitioning health IT systems, ensuring data integrity and security during the transition, and managing the performance of the incoming contractors. The 'transition planning and execution' aspect implies a critical hand-off, where delays or errors could impact ongoing operations. The contract type (Cost Plus Fixed Fee) allows for cost reimbursement but also includes a fixed fee, which incentivizes the contractor to manage costs effectively. Risk management would involve close oversight by CMS, clear performance metrics, regular progress reviews, and potentially contingency planning for unforeseen technical challenges or vendor performance issues.

How effective has this contract been in achieving its stated objectives of transition planning and execution?

Assessing the effectiveness of this contract requires detailed performance reports and outcome data, which are not publicly available through the award notice alone. The contract's objectives include performing technical research, analysis, design, and pilots for State-Based Exchange (SBE) Enterprise Information and Program Management (EIPM) systems, and assisting with general EIPM program management. Success would be measured by the smooth transition of these systems to incoming contractors, the successful completion of research and pilot projects, and the overall stability and functionality of the EIPM program. Without specific performance metrics and evaluation results, a definitive statement on effectiveness cannot be made, though the contract's completion suggests objectives were met to a degree.

What are the historical spending patterns for EIPM program management and transition services at CMS?

Historical spending patterns for EIPM program management and transition services at CMS would likely show a consistent need for such support, especially given the ongoing evolution of healthcare IT regulations and systems. CMS manages numerous complex IT programs, and transitions between contractors or system upgrades are common. While specific historical data for EIPM transitions isn't provided here, it's reasonable to infer that CMS allocates significant resources to ensure the continuity and modernization of its critical IT infrastructure. Spending in this area can fluctuate based on major system overhauls, new legislative mandates, or shifts in technology.

What is the significance of the 'All Other Professional, Scientific, and Technical Services' NAICS code (541990) for this contract?

The NAICS code 541990, 'All Other Professional, Scientific, and Technical Services,' is a broad category used when a business activity does not fit into a more specific industry classification. For this contract, it signifies that the work performed by The MITRE Corporation encompasses a diverse range of professional, scientific, and technical services related to the EIPM program. This could include activities such as specialized research, systems analysis, technical consulting, program management support, and potentially policy analysis, which are not exclusively engineering, computer systems design, or management consulting. The broadness of the code suggests the contract's scope is multifaceted.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

Product/Service Code: RESEARCH AND DEVELOPMENT › N – Health R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HHSM5002017RFP0020

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 7515 COLSHIRE DR, MC LEAN, VA, 22102

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

Financial Breakdown

Contract Ceiling: $33,121,780

Exercised Options: $31,947,866

Current Obligation: $31,947,866

Actual Outlays: $21,559,581

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 75FCMC18D0047

IDV Type: IDC

Timeline