HHS Awards $902M Cloud Contract to General Dynamics for CMS IT Services
Contract Overview
Contract Amount: $902,031,452 ($902.0M)
Contractor: General Dynamics Information Technology, Inc.
Awarding Agency: Department of Health and Human Services
Start Date: 2020-09-01
End Date: 2025-06-30
Contract Duration: 1,763 days
Daily Burn Rate: $511.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 7
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: CLOUD PRODUCTS&TOOLS (CPT)
Place of Performance
Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22042
State: Virginia Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $902.0 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: CLOUD PRODUCTS&TOOLS (CPT) Key points: 1. Significant contract value of $902 million over five years. 2. General Dynamics Information Technology, Inc. is the sole awardee. 3. Potential risk associated with a single vendor for critical IT services. 4. IT sector spending, specifically custom computer programming services.
Value Assessment
Rating: fair
The contract's pricing is based on a firm-fixed-price structure, which provides cost certainty. However, without specific per-unit cost data or benchmarks for similar custom programming services, a detailed value assessment is challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. This method aims to achieve fair market prices, but the impact on price discovery for custom programming services can vary.
Taxpayer Impact: Taxpayers benefit from a competitive process designed to secure fair pricing for essential IT services supporting Medicare and Medicaid.
Public Impact
Ensures continued operation and enhancement of critical IT infrastructure for CMS. Supports the delivery of healthcare services to millions of Americans. Potential for innovation and improved efficiency in healthcare IT systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of specific performance metrics in provided data.
- Potential for vendor lock-in despite initial competition.
- Reliance on a single vendor for a large, critical contract.
Positive Signals
- Awarded through full and open competition.
- Firm-fixed-price contract provides cost predictability.
- Long-term contract ensures stability for essential services.
Sector Analysis
This contract falls within the IT sector, specifically custom computer programming services. Spending in this area is substantial across government agencies, supporting a wide range of digital operations and modernization efforts.
Small Business Impact
The provided data does not indicate any specific set-asides for small businesses in this contract award. Further investigation would be needed to determine the extent of small business participation.
Oversight & Accountability
The contract's duration and significant value warrant robust oversight from CMS and HHS to ensure performance, cost control, and adherence to contract terms.
Related Government Programs
- Custom Computer Programming Services
- Department of Health and Human Services Contracting
- Centers for Medicare and Medicaid Services Programs
Risk Flags
- Single awardee for a large, critical contract.
- Long contract duration (nearly 5 years).
- Potential for cost overruns if scope creeps.
- Dependence on one vendor for essential IT functions.
Tags
custom-computer-programming-services, department-of-health-and-human-services, va, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $902.0 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. CLOUD PRODUCTS&TOOLS (CPT)
Who is the contractor on this award?
The obligated recipient is GENERAL DYNAMICS INFORMATION TECHNOLOGY, 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 $902.0 million.
What is the period of performance?
Start: 2020-09-01. End: 2025-06-30.
What specific performance metrics are in place to ensure the value delivered by General Dynamics meets or exceeds expectations?
The provided data lacks specific performance metrics. Effective oversight would require clearly defined Key Performance Indicators (KPIs) tied to service delivery, system uptime, security compliance, and project milestones. Regular performance reviews and reporting are crucial to validate the contract's value and ensure accountability for the $902 million investment.
What are the potential risks if General Dynamics fails to meet its contractual obligations for these critical IT services?
Failure to meet obligations could lead to significant disruptions in CMS operations, impacting healthcare services and beneficiary access. Risks include data breaches, system outages, and delays in critical IT updates. Contingency plans and clear remedies within the contract are essential to mitigate these potential risks and ensure continuity of operations.
How does this contract contribute to the overall effectiveness of the Centers for Medicare and Medicaid Services' mission?
This contract is vital for maintaining and enhancing the technological backbone of CMS, directly supporting its mission to administer Medicare, Medicaid, and the Health Insurance Marketplace. Effective IT services ensure efficient claims processing, data management, and program integrity, ultimately contributing to the delivery of quality healthcare services to millions of Americans.
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
Offers Received: 7
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: General Dynamics Corp
Address: 3150 FAIRVIEW PARK DR STE 100, FALLS CHURCH, VA, 22042
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $902,031,452
Exercised Options: $902,031,452
Current Obligation: $902,031,452
Actual Outlays: $777,170,857
Subaward Activity
Number of Subawards: 346
Total Subaward Amount: $657,492,157
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: GS35F393CA
IDV Type: FSS
Timeline
Start Date: 2020-09-01
Current End Date: 2025-06-30
Potential End Date: 2025-06-30 00:00:00
Last Modified: 2025-06-05
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