CMS awards $37.3M for ServiceNow development and operations to I TECH AG LLC
Contract Overview
Contract Amount: $37,354,538 ($37.4M)
Contractor: I Tech AG LLC
Awarding Agency: Department of Health and Human Services
Start Date: 2023-09-05
End Date: 2026-09-05
Contract Duration: 1,096 days
Daily Burn Rate: $34.1K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: THE PURPOSE OF THIS TASK ORDER IS FOR THE CENTERS FOR MEDICARE & MEDICAID SERVICES TO OBTAIN SERVICENOW DEVELOPMENT, OPERATIONS, AND CONTINUOUS IMPROVEMENT SERVICES FOR THE HEALTH CARE QUALITY INFORMATION SYSTEMS (HCQIS) OPERATED BY THE INFORMATI
Place of Performance
Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22201
State: Virginia Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $37.4 million to I TECH AG LLC for work described as: THE PURPOSE OF THIS TASK ORDER IS FOR THE CENTERS FOR MEDICARE & MEDICAID SERVICES TO OBTAIN SERVICENOW DEVELOPMENT, OPERATIONS, AND CONTINUOUS IMPROVEMENT SERVICES FOR THE HEALTH CARE QUALITY INFORMATION SYSTEMS (HCQIS) OPERATED BY THE INFORMATI Key points: 1. Contract focuses on critical healthcare quality information systems. 2. Long-term engagement with a defined end date. 3. Firm Fixed Price contract type suggests predictable costs. 4. ServiceNow expertise is a key requirement. 5. Operations and continuous improvement are core to the task order. 6. Potential for significant impact on healthcare quality reporting.
Value Assessment
Rating: good
The contract value of $37.3 million over approximately three years for ServiceNow development, operations, and continuous improvement for the HCQIS appears reasonable. Benchmarking against similar large-scale IT service contracts for government agencies, this value aligns with the scope of work involving complex system management and enhancement. The firm fixed-price structure provides cost certainty for the government, mitigating risks associated with scope creep or unforeseen technical challenges. While specific performance metrics are not detailed here, the focus on continuous improvement suggests a commitment to optimizing value over the contract's life.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This task order was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but the 'full and open' designation suggests a competitive process was followed. This approach is generally expected to yield competitive pricing and a wider pool of qualified contractors. The use of a BPA Call implies a pre-competed agreement was in place, with this task order being a specific call against that.
Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to better pricing and higher quality services. It ensures that the government is not limited to a single provider, thereby increasing the likelihood of securing the best value for public funds.
Public Impact
Beneficiaries include healthcare providers, policymakers, and ultimately, patients who benefit from improved healthcare quality. Services delivered will enhance the functionality and reliability of the Health Care Quality Information Systems (HCQIS). Geographic impact is national, supporting CMS's oversight of healthcare quality across the United States. Workforce implications include IT professionals specializing in ServiceNow development, operations, and system administration.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in if ServiceNow becomes deeply integrated without clear exit strategies.
- Reliance on a single technology platform (ServiceNow) could pose risks if the platform's future development or support changes.
- Ensuring continuous improvement translates to tangible quality gains requires robust performance monitoring.
Positive Signals
- Focus on continuous improvement suggests a proactive approach to system enhancement.
- Firm Fixed Price contract provides cost predictability.
- Award under full and open competition indicates a competitive selection process.
Sector Analysis
This contract falls within the IT services sector, specifically focusing on custom software development, operations, and management for a government health agency. The market for enterprise IT solutions like ServiceNow is substantial, with significant government spending allocated to modernizing legacy systems and improving data management. CMS's use of ServiceNow for HCQIS is indicative of a broader trend among federal agencies to adopt integrated platforms for managing complex operations and information. Comparable spending benchmarks would involve other large-scale IT service contracts for system development and maintenance within federal health and civilian agencies.
Small Business Impact
The provided data does not indicate any specific small business set-aside provisions for this task order, nor does it mention subcontracting goals. Given the nature and scale of the work, it is possible that larger prime contractors may engage small businesses for specialized services, but this is not explicitly stated. Further analysis would be needed to determine if subcontracting opportunities exist and how they might impact the small business ecosystem.
Oversight & Accountability
Oversight for this task order would primarily reside with the Centers for Medicare & Medicaid Services (CMS) contracting officers and program managers. The firm fixed-price nature of the contract provides a degree of accountability through cost control. Transparency is facilitated by the contract being awarded under full and open competition. While specific Inspector General (IG) jurisdiction is not detailed, the HHS OIG typically has oversight over CMS programs and contracts to ensure efficiency and prevent fraud, waste, and abuse.
Related Government Programs
- Health Care Quality Information Systems (HCQIS)
- Centers for Medicare & Medicaid Services (CMS) IT Modernization Efforts
- Federal Health IT Services
- ServiceNow Government Contracts
Risk Flags
- Long-term contract duration may increase risk if requirements change significantly.
- Reliance on a specific platform (ServiceNow) could pose future integration or transition challenges.
- Performance metrics and success criteria need to be clearly defined and monitored.
Tags
it-services, health-it, centers-for-medicare-medicaid-services, department-of-health-and-human-services, firm-fixed-price, full-and-open-competition, bpa-call, service-now, operations-and-maintenance, software-development, virginia, healthcare-quality
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $37.4 million to I TECH AG LLC. THE PURPOSE OF THIS TASK ORDER IS FOR THE CENTERS FOR MEDICARE & MEDICAID SERVICES TO OBTAIN SERVICENOW DEVELOPMENT, OPERATIONS, AND CONTINUOUS IMPROVEMENT SERVICES FOR THE HEALTH CARE QUALITY INFORMATION SYSTEMS (HCQIS) OPERATED BY THE INFORMATI
Who is the contractor on this award?
The obligated recipient is I TECH AG 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 $37.4 million.
What is the period of performance?
Start: 2023-09-05. End: 2026-09-05.
What is the track record of I TECH AG LLC in performing similar large-scale IT development and operations contracts for federal agencies, particularly within the healthcare sector?
Assessing the track record of I TECH AG LLC is crucial for understanding their capability to deliver on this significant task order. While the provided data confirms they are the awardee, it does not detail their past performance history. A thorough review would involve examining past federal contract awards, performance evaluations (such as Contractor Performance Assessment Reporting System - CPARS), and any documented successes or challenges in managing complex IT systems, particularly those related to healthcare quality information. Understanding their experience with ServiceNow and similar platforms, as well as their ability to meet deadlines and budget constraints on previous projects, would provide valuable insight into their suitability for this role. Without this specific performance data, the assessment of their capability remains preliminary.
How does the awarded value of $37.3 million compare to the estimated market rates for similar ServiceNow development, operations, and continuous improvement services for a federal agency of CMS's size
The awarded value of $37.3 million over approximately three years for comprehensive ServiceNow services for CMS's HCQIS needs to be benchmarked against market rates. This involves comparing the estimated labor hours, skill sets required (developers, administrators, project managers), and the complexity of the systems being managed against industry pricing standards for enterprise IT services. Factors such as the specific modules of ServiceNow being utilized, the level of customization, and the required uptime and security protocols will influence the cost. While the firm fixed-price nature provides cost certainty, understanding the underlying cost structure and comparing it to industry benchmarks for similar government contracts or large enterprise deployments is essential to confirm value for money. Without access to detailed cost breakdowns or specific market surveys for this type of specialized federal IT service, a definitive comparison is challenging, but the value appears within a reasonable range for a multi-year, complex federal IT engagement.
What are the primary risks associated with this contract, and what mitigation strategies are likely in place given the firm fixed-price structure?
Key risks for this contract include potential scope creep if requirements are not clearly defined and managed, technical challenges in integrating or enhancing the ServiceNow platform, and potential performance issues if the contractor's resources are not adequately skilled or staffed. Given the firm fixed-price (FFP) structure, the primary risk is shifted to the contractor, who is obligated to deliver the specified services within the agreed-upon budget. This incentivizes the contractor to manage costs and technical challenges efficiently. Mitigation strategies implicitly built into the FFP structure include rigorous project management by the contractor and close oversight by CMS to ensure adherence to the statement of work. Clear communication channels, well-defined milestones, and performance metrics will be critical for managing risks and ensuring successful delivery.
How effective is the Health Care Quality Information Systems (HCQIS) currently, and what improvements are expected from this contract?
The Health Care Quality Information Systems (HCQIS) is a critical infrastructure for CMS, collecting and analyzing data to measure and improve the quality of healthcare services provided to Medicare and Medicaid beneficiaries. Its effectiveness is measured by its ability to provide timely, accurate, and actionable data for quality improvement initiatives, public reporting, and policy development. This contract, focusing on ServiceNow development, operations, and continuous improvement, is expected to enhance HCQIS by modernizing its platform, improving its functionality, ensuring its reliability, and potentially expanding its analytical capabilities. The goal is to make the system more efficient, user-friendly, and capable of supporting CMS's evolving quality measurement and reporting needs, ultimately contributing to better patient care outcomes.
What has been the historical spending pattern for HCQIS IT services, and how does this $37.3 million award fit within that trend?
Analyzing historical spending for HCQIS IT services is essential to contextualize this $37.3 million award. Typically, large federal IT systems require ongoing investment for development, maintenance, operations, and upgrades. Without specific historical data for HCQIS, it's difficult to provide a precise comparison. However, federal IT spending often involves multi-year contracts for system modernization and support. If HCQIS has undergone significant platform changes or expansions, spending might fluctuate. A $37.3 million award over three years averages roughly $12.4 million annually, which is a substantial but not necessarily unusual figure for managing a critical national healthcare information system. Understanding if this represents an increase, decrease, or steady level of investment compared to previous periods would indicate trends in CMS's commitment to the HCQIS platform's evolution and maintenance.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Facilities Management Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1220 N FILLMORE ST, ARLINGTON, VA, 22201
Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Not Tax Exempt, Hispanic American Owned Business, Limited Liability Corporation, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $64,250,555
Exercised Options: $37,354,538
Current Obligation: $37,354,538
Actual Outlays: $29,831,246
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: 75FCMC22A0028
IDV Type: BPA
Timeline
Start Date: 2023-09-05
Current End Date: 2026-09-05
Potential End Date: 2028-09-05 00:00:00
Last Modified: 2025-09-19
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