HHS awards $206.6M task order for IT services to A Square Group LLC, re-competed under CIO-SP3 SB

Contract Overview

Contract Amount: $206,653,164 ($206.7M)

Contractor: A Square Group LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2022-02-15

End Date: 2026-11-14

Contract Duration: 1,733 days

Daily Burn Rate: $119.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 5

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: NITAAC CIO-SP3 SMALL BUSINESS TASK ORDER OF RE-COMPETED WMS REQUIREMENT

Place of Performance

Location: CATONSVILLE, BALTIMORE County, MARYLAND, 21228

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $206.7 million to A SQUARE GROUP LLC for work described as: NITAAC CIO-SP3 SMALL BUSINESS TASK ORDER OF RE-COMPETED WMS REQUIREMENT Key points: 1. Value for money assessed through competitive bidding under a large IDIQ. 2. Competition dynamics indicate a robust market for IT services within HHS. 3. Risk indicators include the use of Time and Materials pricing, which can escalate costs if not managed closely. 4. Performance context is a re-competed requirement, suggesting prior satisfactory performance. 5. Sector positioning within IT services, specifically computer systems design.

Value Assessment

Rating: good

The total award amount of $206.6 million over approximately 4.7 years suggests a significant investment in IT services. Benchmarking against similar large-scale IT task orders within federal agencies, particularly under the CIO-SP3 vehicle, is crucial for a precise value assessment. The Time and Materials (T&M) pricing structure, while common for evolving IT needs, carries inherent cost escalation risks if not meticulously monitored and controlled by the agency. Without specific performance metrics or detailed cost breakdowns, a definitive value-for-money judgment is challenging, but the competitive nature of the award provides a positive signal.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This task order was awarded under the CIO-SP3 Small Business IDIQ contract, which itself was competed full and open. The specific award mechanism, 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicates that while the overall vehicle was broadly competed, specific exclusions might have applied to this particular task order, though the primary competition was broad. The presence of 5 bidders suggests a healthy level of competition for this specific requirement, which generally aids in price discovery and achieving fair market value.

Taxpayer Impact: The competitive award process for this task order, involving multiple bidders, is beneficial for taxpayers as it drives down prices and encourages efficiency from the winning contractor.

Public Impact

Beneficiaries include the Centers for Medicare and Medicaid Services (CMS) and potentially other HHS operating divisions requiring IT modernization and support. Services delivered encompass computer systems design, likely including software development, system integration, and IT infrastructure management. Geographic impact is primarily centered in Maryland (ST: MD, SN: MARYLAND), where the contractor is located and likely where services will be performed or managed. Workforce implications may involve the creation or sustainment of IT jobs within A Square Group LLC and its potential subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) pricing can lead to cost overruns if not strictly managed.
The complexity of IT systems managed by CMS presents inherent operational risks.
Reliance on a single task order for a significant portion of IT services could pose a risk if contractor performance falters.

Positive Signals

Awarded under a large, established IDIQ (CIO-SP3 SB) suggests a degree of pre-qualification and streamlined acquisition.
The re-competed nature of the requirement implies a history of satisfactory performance, reducing initial performance risk.
Multiple bidders (5) indicate a competitive market and potential for strong contractor performance.

Sector Analysis

This contract falls within the broader Information Technology (IT) services sector, specifically focusing on Computer Systems Design Services (NA: 541512). This is a critical and large segment of federal IT spending, encompassing a wide range of activities from custom software development to system integration and IT consulting. The federal government is a major consumer of these services, with significant spending allocated annually across various agencies to maintain and modernize legacy systems, develop new digital capabilities, and ensure cybersecurity. Comparable spending benchmarks would involve analyzing other large IT task orders awarded under IDIQs like CIO-SP3 or other government-wide acquisition contracts (GWACs).

Small Business Impact

Although the contract vehicle is CIO-SP3 Small Business, the data indicates this specific task order was not set aside for small businesses (SB: false). The contractor, A Square Group LLC, is identified as a small business (ST: MD, SN: MARYLAND), suggesting it qualified for the vehicle's small business focus. The implications for the broader small business ecosystem are mixed; while a small business won this significant award, it was not through a specific small business set-aside at the task order level. Subcontracting opportunities may exist, but the extent to which they will benefit other small businesses is not detailed in this data.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Health and Human Services (HHS) and its Centers for Medicare and Medicaid Services (CMS) contracting and program officials. The contract type (Time and Materials) necessitates close monitoring of labor hours and costs to prevent overruns. Transparency is facilitated by the public nature of federal contract awards, though detailed performance reports are typically internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected within the contract's execution.

Related Government Programs

CIO-SP3 Small Business IDIQ
HHS IT Modernization Efforts
CMS Health IT Services
Computer Systems Design Services
Federal IT Services Acquisition

Risk Flags

Potential for cost overruns due to Time and Materials pricing.
Contractor performance risk, although mitigated by re-competition.
Dependency on a single contractor for critical IT services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $206.7 million to A SQUARE GROUP LLC. NITAAC CIO-SP3 SMALL BUSINESS TASK ORDER OF RE-COMPETED WMS REQUIREMENT

Who is the contractor on this award?

The obligated recipient is A SQUARE GROUP 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 $206.7 million.

What is the period of performance?

Start: 2022-02-15. End: 2026-11-14.

What is the historical spending trend for this specific requirement or similar services at CMS?

Analyzing historical spending for this requirement or comparable computer systems design services at CMS is crucial for understanding cost trends and identifying potential anomalies. Without specific historical data for this exact task order, we can infer trends from the CIO-SP3 vehicle's overall performance and CMS's broader IT budget. CMS has consistently invested heavily in IT to support its mission-critical programs like Medicare and Medicaid. Spending on IT services, particularly system design and integration, has generally increased over the past decade due to the need for modernization, enhanced data analytics, and improved citizen services. Examining prior task orders under CIO-SP3 or similar contracts awarded to A Square Group LLC or its competitors could reveal patterns in pricing, scope, and duration, providing context for the current $206.6 million award.

How does the pricing structure (Time and Materials) compare to fixed-price options for similar IT services, and what are the associated risks?

Time and Materials (T&M) pricing is often used for IT services when the scope of work is not clearly defined or is expected to evolve, allowing for flexibility. However, it carries a higher risk of cost escalation for the government compared to fixed-price contracts, as the contractor is reimbursed for actual labor hours and material costs, plus a fee. For well-defined IT projects, fixed-price contracts generally offer better cost certainty and incentivize contractor efficiency. The risk with T&M lies in the government's ability to effectively manage and oversee the contractor's time and resources. Without robust oversight, T&M contracts can significantly exceed initial estimates. Benchmarking T&M rates against industry standards and ensuring strict adherence to ceilings and reporting requirements are critical mitigation strategies for CMS in this case.

What is A Square Group LLC's track record with federal contracts, particularly within HHS or for similar IT services?

A Square Group LLC's track record with federal contracts, especially within HHS and for computer systems design services, is a key indicator of their capability and reliability. As a small business, their success in winning a $206.6 million task order under the competitive CIO-SP3 SB vehicle suggests a history of successful past performance. Further investigation would involve reviewing their contract history for previous awards, performance evaluations (e.g., CPARS reports), and any documented issues or successes. Their ability to secure and execute this significant re-competed requirement implies they have met or exceeded performance expectations on prior engagements, demonstrating competence in delivering complex IT solutions within the federal environment.

What specific IT modernization or support functions will this task order fund for CMS?

This task order is designated for Computer Systems Design Services (NA: 541512) and is a re-competed requirement for CMS. While the specific functions are not detailed, such services typically encompass a broad range of IT activities critical to CMS operations. This could include the development, enhancement, and maintenance of core IT systems that support programs like Medicare and Medicaid, data analytics platforms, cybersecurity infrastructure, cloud migration efforts, or user interface improvements for healthcare providers and beneficiaries. The 'WMS Requirement' mentioned in the description likely refers to a specific system or set of systems managed by CMS that requires ongoing design, development, and support services to ensure its functionality, security, and modernization.

How does the competition level (5 bidders) for this task order compare to typical competition for similar IT services under the CIO-SP3 SB vehicle?

The fact that this task order attracted 5 bidders under the CIO-SP3 Small Business vehicle is a positive indicator of market interest and competition for this specific requirement. The CIO-SP3 vehicle, being a large government-wide acquisition contract (GWAC), generally fosters significant competition. However, the exact number of bidders can vary widely depending on the specific task order's scope, technical complexity, and perceived value. A competition level of 5 bidders is generally considered healthy for a task order of this magnitude, suggesting that multiple qualified small businesses were interested and capable of performing the work. This level of competition typically provides a good basis for price negotiation and ensures that CMS is likely receiving a competitive offer.

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 › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: RFP-CMS-220223

Offers Received: 5

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 6237 EXECUTIVE BLVD, ROCKVILLE, MD, 20852

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

Financial Breakdown

Contract Ceiling: $219,801,856

Exercised Options: $214,679,016

Current Obligation: $206,653,164

Actual Outlays: $160,763,106

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Parent Contract

Parent Award PIID: 75N98120D00007

IDV Type: GWAC

Timeline