HHS awards $38.6M for adaptive capabilities testing, with 6 bidders competing

Contract Overview

Contract Amount: $38,582,747 ($38.6M)

Contractor: Emagine IT Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2020-09-17

End Date: 2025-10-31

Contract Duration: 1,870 days

Daily Burn Rate: $20.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ADAPTIVE CAPABILITIES TESTING

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $38.6 million to EMAGINE IT INC for work described as: ADAPTIVE CAPABILITIES TESTING Key points: 1. Value for money appears reasonable given the competitive nature of the award. 2. Strong competition dynamics suggest potential for price discovery and cost efficiency. 3. Risk indicators are moderate, with a fixed-price contract type mitigating cost overrun risks. 4. Performance context is within computer systems design services, a common area for federal IT. 5. Sector positioning is within the Health IT sub-sector, supporting critical healthcare infrastructure.

Value Assessment

Rating: good

The contract's value of $38.6 million over approximately five years appears competitive, especially considering the $2.06 million average annual value. The firm-fixed-price contract type suggests that the government has locked in costs, which is a positive sign for value. Benchmarking against similar IT services contracts within the federal government would provide a more precise value assessment, but the presence of six bidders indicates a healthy market response.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with six bidders vying for the opportunity. This level of competition is generally favorable, as it allows a broad range of capable vendors to participate and encourages competitive pricing. The presence of multiple bidders suggests that the market is robust for these types of services and that the government had a good selection of qualified contractors.

Taxpayer Impact: The robust competition for this contract is beneficial for taxpayers, as it likely drove down the final price and ensured the government received competitive offers for the adaptive capabilities testing services.

Public Impact

The Centers for Medicare and Medicaid Services (CMS) benefits from enhanced testing capabilities. Services delivered include adaptive capabilities testing, crucial for system reliability and performance. The geographic impact is primarily within Maryland, where the contractor is located. Workforce implications include employment opportunities within the IT services sector for Emagine IT Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if testing requirements are not clearly defined.
Dependence on contractor performance for timely and accurate testing results.
Ensuring continued alignment with evolving healthcare IT standards and regulations.

Positive Signals

Firm-fixed-price contract limits cost overrun risks for the government.
Strong competition suggests a capable and responsive contractor pool.
Long-term contract duration allows for sustained support and knowledge development.

Sector Analysis

The federal IT services market is a significant segment of government spending. Computer Systems Design Services, categorized under NAICS code 541512, represent a substantial portion of this market. This contract fits within the broader Health IT sector, which is critical for the functioning of agencies like CMS. Comparable spending benchmarks for similar IT testing and development contracts within HHS and other agencies would provide further context on the scale of this award.

Small Business Impact

This contract was not specifically set aside for small businesses, nor does it appear to have significant subcontracting requirements indicated in the provided data. The award to Emagine IT Inc., a company that may or may not be classified as a small business, means that the direct impact on the small business ecosystem is not immediately apparent from this data alone. Further analysis would be needed to determine if small business participation is mandated or likely through subcontracting.

Oversight & Accountability

Oversight for this contract would typically fall under the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. Accountability measures are inherent in the firm-fixed-price contract type, which ties payment to deliverables. Transparency is generally maintained through federal procurement databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Healthcare IT Modernization Programs
Federal Civilian IT Services
Computer Systems Design Services
Centers for Medicare and Medicaid Services IT Contracts
Adaptive Testing Services

Risk Flags

Potential for vendor lock-in if not managed carefully.
Reliance on contractor expertise could pose a knowledge transfer risk.
Ensuring alignment with evolving cybersecurity requirements.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $38.6 million to EMAGINE IT INC. ADAPTIVE CAPABILITIES TESTING

Who is the contractor on this award?

The obligated recipient is EMAGINE IT INC.

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 $38.6 million.

What is the period of performance?

Start: 2020-09-17. End: 2025-10-31.

What is the track record of Emagine IT Inc. in performing similar federal contracts?

A review of Emagine IT Inc.'s federal contract history would be necessary to assess their track record. This would involve examining past performance evaluations, contract awards in similar service areas (e.g., IT testing, systems design), and their history of meeting deadlines and budget requirements. Information from sources like the Federal Procurement Data System (FPDS) and past performance databases would be crucial. A history of successful contract completion and positive performance reviews would indicate a lower risk associated with this award. Conversely, a pattern of performance issues or contract disputes could raise concerns about their ability to deliver effectively on this current contract.

How does the awarded price compare to market rates for similar adaptive capabilities testing services?

To compare the awarded price to market rates, one would need to benchmark it against similar contracts awarded by other federal agencies or even commercial entities for comparable adaptive capabilities testing services. This involves analyzing the average hourly rates or total contract values for services with similar scope, complexity, and duration. Factors such as the specific technologies involved, the level of expertise required, and the geographic location of service delivery can influence market rates. If the awarded price is significantly lower than market benchmarks, it could indicate exceptional value or potentially unrealistic pricing. Conversely, a price substantially above market rates might suggest overpayment or a lack of competitive pressure.

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

Primary risks for this contract could include technical challenges in performing adaptive capabilities testing, potential for scope creep if requirements are not well-defined, and contractor performance issues. Mitigation strategies are evident in the contract structure: the firm-fixed-price (FFP) type helps control costs, shifting financial risk to the contractor. The full and open competition with six bidders suggests a robust market, increasing the likelihood of selecting a capable vendor. Clear statement of work (SOW) and performance metrics are crucial for managing scope and ensuring quality. Regular performance reviews and communication channels between the government and the contractor are also key mitigation tactics.

How effective has CMS been in managing IT contracts of this nature in the past?

Assessing CMS's effectiveness in managing similar IT contracts requires analyzing their historical contract performance data, including contract modifications, cost overruns, schedule delays, and contractor performance ratings. Examining the agency's procurement policies, oversight mechanisms, and the experience of their contracting officers and program managers would provide further insight. A track record of successful IT project delivery and efficient contract management suggests a higher likelihood of success for this contract. Conversely, a history of challenges in managing complex IT procurements might indicate potential risks that need careful monitoring.

What has been the historical spending trend for adaptive capabilities testing or similar services at CMS?

Analyzing historical spending trends for adaptive capabilities testing or similar services at CMS would involve reviewing procurement data over several fiscal years. This would reveal whether spending in this area has been consistent, increasing, or decreasing, and identify the primary contractors and contract types utilized. Understanding these trends can help contextualize the current award amount, identify potential patterns of reliance on specific vendors, and inform future budget planning. Significant year-over-year fluctuations might warrant investigation into the underlying causes, such as changes in program requirements or technology adoption.

What is the potential impact of this contract on the broader federal IT services market?

This contract, valued at $38.6 million, contributes to the overall federal IT services market, particularly within the Health IT sector. Awards of this size can influence market dynamics by signaling demand for specific capabilities like adaptive testing. The competitive nature of the award suggests that multiple firms are capable of meeting these needs, fostering a healthy competitive environment. It also provides revenue and work for the awarded contractor, Emagine IT Inc., potentially enabling them to expand their capabilities or workforce. Such contracts can also set benchmarks for pricing and performance expectations for similar future procurements.

Industry Classification

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

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3040 WILLIAMS DRIVE, SUITE 400, FAIRFAX, VA, 22031

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Small Business, Special Designations, Subchapter S Corporation, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $38,608,568

Exercised Options: $38,582,747

Current Obligation: $38,582,747

Actual Outlays: $33,472,238

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HHSM500201600027I

IDV Type: IDC

Timeline