CMS Cloud Navigator Services contract awarded to Cognosante MVH LLC for over $45.6M

Contract Overview

Contract Amount: $45,662,518 ($45.7M)

Contractor: Cognosante MVH LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2019-05-01

End Date: 2022-06-16

Contract Duration: 1,142 days

Daily Burn Rate: $40.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: CMS CLOUD NAVIGATOR SERVICES (NAVIGATOR)

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22042

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $45.7 million to COGNOSANTE MVH LLC for work described as: CMS CLOUD NAVIGATOR SERVICES (NAVIGATOR) Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is Time and Materials, which can pose cost control challenges if not managed effectively. 3. The duration of the contract was 1142 days, indicating a significant, long-term engagement. 4. The contract was a delivery order, suggesting it was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle. 5. The base contract value was approximately $3.99M, with the awarded amount significantly exceeding this initial value. 6. The contract was awarded to a single vendor, Cognosante MVH LLC.

Value Assessment

Rating: fair

The contract's final value of over $45.6 million significantly exceeded its base value of approximately $3.99 million. While the contract was awarded through full and open competition, the substantial increase in value over time warrants scrutiny. Without detailed task order information, it's difficult to benchmark the per-unit costs against similar cloud navigation services. The Time and Materials pricing model, while flexible, can lead to cost overruns if not closely monitored and managed by the agency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 7 bidders suggests a healthy level of competition for this requirement. A competitive process generally helps in achieving fair market prices and encourages vendors to offer their best value propositions.

Taxpayer Impact: A full and open competition is beneficial for taxpayers as it drives down prices through market forces and ensures that the government receives competitive bids, potentially leading to cost savings.

Public Impact

The Centers for Medicare and Medicaid Services (CMS) benefits from enhanced cloud navigation services, crucial for managing vast healthcare data. Services delivered likely include cloud strategy, migration, optimization, and management, supporting CMS's digital transformation efforts. The geographic impact is national, as CMS operates nationwide, affecting healthcare providers and beneficiaries across the United States. Workforce implications may include the need for specialized IT and cloud expertise within CMS or reliance on contractor personnel for these skills.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Significant increase from base contract value to final award value suggests potential scope creep or underestimation of initial needs.
Time and Materials contract type can lead to cost escalation if not meticulously managed and monitored.
Lack of specific per-unit cost data makes it challenging to assess true value for money.
The contract was awarded to a single entity, limiting immediate opportunities for other vendors in this specific award.
The contract duration of over three years requires ongoing performance monitoring to ensure continued value.

Positive Signals

Awarded through full and open competition, indicating a robust and fair bidding process.
Multiple bidders (7) participated, suggesting market interest and a competitive environment.
The contract supports critical functions for CMS, a vital agency in the US healthcare system.
The vendor, Cognosante MVH LLC, is likely experienced in providing such services to government entities.

Sector Analysis

The IT services sector, particularly cloud computing and custom computer programming, is a rapidly growing area within federal procurement. This contract falls under the custom computer programming services NAICS code (541511). Federal agencies are increasingly migrating services to the cloud to improve efficiency, scalability, and security. Spending in this sector is substantial, with agencies like HHS and its sub-agencies such as CMS investing heavily in modernizing their IT infrastructure. Comparable spending benchmarks would typically involve analyzing other large-scale cloud migration and management contracts within HHS or other civilian agencies.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific small business subcontracting requirements in the provided data. The award to a single, likely large, prime contractor may limit direct opportunities for small businesses on this specific contract, although the prime contractor could engage small businesses for subcontracting roles. Further analysis of subcontracting plans would be needed to determine the full impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. The contract's performance would be monitored against established milestones and deliverables. Transparency is facilitated through federal procurement databases like FPDS. Inspector General oversight from the Department of Health and Human Services (HHS) could be involved if any issues of fraud, waste, or abuse arise. Accountability measures are typically built into the contract through performance metrics and payment schedules.

Related Government Programs

HHS Cloud Strategy
CMS IT Modernization Initiatives
Federal Cloud Computing Strategy
Custom Computer Programming Services Contracts
Health Information Technology Services

Risk Flags

Significant contract value increase from base to award.
Time and Materials pricing model.
Long contract duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $45.7 million to COGNOSANTE MVH LLC. CMS CLOUD NAVIGATOR SERVICES (NAVIGATOR)

Who is the contractor on this award?

The obligated recipient is COGNOSANTE MVH LLC.

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 $45.7 million.

What is the period of performance?

Start: 2019-05-01. End: 2022-06-16.

What was the specific nature of the cloud navigation services provided under this contract?

The contract data indicates 'CMS CLOUD NAVIGATOR SERVICES (NAVIGATOR)' provided by Cognosante MVH LLC. While the specific details are not fully elaborated in the summary data, 'cloud navigation services' typically encompass a range of activities essential for managing and optimizing an organization's cloud presence. This could include strategic planning for cloud adoption, assessing existing infrastructure, designing cloud architectures, managing cloud migrations (e.g., from on-premises data centers to cloud platforms like AWS, Azure, or Google Cloud), ensuring cloud security and compliance, optimizing cloud resource utilization for cost and performance, and providing ongoing operational support for cloud environments. Given CMS's role in managing vast amounts of sensitive healthcare data, these services are critical for ensuring the reliability, security, and efficiency of their IT operations.

How does the final award value of over $45.6M compare to the initial base contract value of $3.99M?

The final award value of $45,662,518.31 represents a significant increase, approximately 11.4 times larger, than the initial base contract value of $3,998,500. This substantial growth suggests that the scope of work likely expanded considerably beyond the initial requirements, or that the initial estimate was significantly understated. Contracts awarded under a Time and Materials (T&M) pricing structure, like this one, are particularly susceptible to value growth if not tightly managed. Such increases warrant a review of the contract's modification history to understand the drivers behind the expansion – whether it was due to unforeseen requirements, scope creep, or effective utilization of contract options. For taxpayers, a large increase necessitates assurance that the additional funds were necessary and that the services provided continued to represent good value for money.

What are the potential risks associated with a Time and Materials (T&M) contract of this magnitude?

Time and Materials (T&M) contracts, while offering flexibility, carry inherent risks, especially for a contract valued over $45 million. The primary risk is cost escalation, as the government pays for the time and materials consumed by the contractor, rather than a fixed price for a defined outcome. This can lead to the contract exceeding budget if work is inefficiently performed or if the scope is not clearly defined and controlled. Without strong oversight, contractors may have less incentive to control costs or expedite work. For this CMS contract, the significant increase from its base value highlights this risk. Effective risk mitigation requires rigorous monitoring of labor hours, material costs, and task completion, along with clear definitions of 'completion' for T&M tasks to prevent open-ended expenditures.

What does the number of bidders (7) indicate about the competition for this contract?

Having seven bidders for this contract suggests a healthy level of competition. This number indicates that the requirement was attractive enough to draw significant interest from multiple companies within the relevant market space. A larger pool of bidders generally increases the likelihood that the government will receive competitive pricing and a wider range of technical solutions. It also implies that the barriers to entry for bidding were not prohibitively high, allowing several firms to invest the resources necessary to prepare a proposal. For taxpayers, this level of competition is positive as it typically leads to better value and potentially lower costs compared to a situation with only one or two bidders.

How does this contract fit within the broader context of federal IT spending and cloud adoption?

This contract aligns with a major trend in federal IT spending: the migration of government services to cloud-based infrastructure. Agencies like CMS are under pressure to modernize legacy systems, improve data accessibility, enhance cybersecurity, and achieve cost efficiencies, all of which cloud computing facilitates. Federal IT budgets are substantial, and a significant portion is now allocated to cloud services, infrastructure, and related support. Contracts like the CMS Cloud Navigator Services are essential for enabling this transition. They represent the specialized expertise required to navigate the complexities of cloud environments, ensuring that agencies can leverage cloud benefits securely and effectively. This spending reflects a strategic shift away from traditional on-premises data centers towards more agile and scalable cloud solutions.

What is the significance of this contract being a 'Delivery Order'?

The designation of this award as a 'Delivery Order' (aw) implies that it was placed against a pre-existing Indefinite-Delivery/Indefinite-Quantity (IDIQ) contract vehicle. IDIQ contracts are commonly used by federal agencies to streamline the procurement process for services or supplies that are expected to be needed over a period but where the exact quantity or timing isn't known upfront. A delivery order specifies the exact quantity, price, and delivery schedule for a particular requirement under the broader IDIQ. This approach allows the agency to procure services efficiently as needs arise, while the underlying IDIQ likely underwent its own competitive process. The fact that this was a delivery order suggests it was one of potentially many task orders issued under a larger master contract.

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 › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: A191005

Offers Received: 7

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Cognosante Holdings, LLC

Address: 3110 FAIRVIEW PARK DR STE 800, FALLS CHURCH, VA, 22042

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $45,662,518

Exercised Options: $45,662,518

Current Obligation: $45,662,518

Actual Outlays: $11,933,900

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 47QTCA19D00AJ

IDV Type: FSS

Timeline