HHS awards $53M contract for ACO-OS modernization to SOFTRAMS LLC, focusing on scalable architecture

Contract Overview

Contract Amount: $52,999,439 ($53.0M)

Contractor: Softrams LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2024-02-28

End Date: 2027-02-27

Contract Duration: 1,095 days

Daily Burn Rate: $48.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THE INNOVATIVE DESIGN, DEVELOPMENT AND OPERATIONS CONTRACT (IDDOC) WILL CONTINUE TO DEVELOP, MAINTAIN, AND MODERNIZE THE ACCOUNTABLE CARE ORGANIZATION - OPERATIONAL SYSTEM (ACO-OS) AND 4 INNOVATION (4I), AND PROVIDE A MODERN SCALABLE ARCHITECTURE, PL

Place of Performance

Location: LEESBURG, LOUDOUN County, VIRGINIA, 20176

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $53.0 million to SOFTRAMS LLC for work described as: THE INNOVATIVE DESIGN, DEVELOPMENT AND OPERATIONS CONTRACT (IDDOC) WILL CONTINUE TO DEVELOP, MAINTAIN, AND MODERNIZE THE ACCOUNTABLE CARE ORGANIZATION - OPERATIONAL SYSTEM (ACO-OS) AND 4 INNOVATION (4I), AND PROVIDE A MODERN SCALABLE ARCHITECTURE, PL Key points: 1. Contract aims to modernize critical healthcare IT infrastructure for accountable care organizations. 2. Focus on developing and maintaining the ACO-OS and 4I systems. 3. Emphasizes a modern, scalable architecture for future healthcare needs. 4. Long-term contract duration suggests a need for sustained development and support. 5. Firm Fixed Price contract type provides cost certainty for the government. 6. The contract is a Delivery Order under a larger IDDOC, indicating a phased approach to development.

Value Assessment

Rating: good

The contract value of $53 million over three years for custom computer programming services appears reasonable given the scope of modernizing and maintaining complex healthcare IT systems. Benchmarking against similar large-scale IT modernization contracts within federal health agencies suggests this pricing is within expected ranges. The firm fixed-price structure helps control costs, but ongoing monitoring of scope creep will be crucial for ensuring value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of three bidders suggests a competitive landscape for this type of specialized IT service. A competitive process generally leads to better pricing and service offerings for the government.

Taxpayer Impact: Full and open competition ensures that taxpayer dollars are used efficiently by driving down costs and encouraging innovation among bidders.

Public Impact

Beneficiaries include healthcare providers participating in accountable care organizations, who will utilize the modernized systems. Services delivered include the development, maintenance, and modernization of the ACO-OS and 4I platforms. Geographic impact is nationwide, affecting healthcare delivery and administration across the US. Workforce implications include potential job creation within SOFTRAMS LLC and its subcontractors for IT development and support roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the architecture becomes highly proprietary.
Risk of cost overruns if modernization requirements are not clearly defined and managed.
Dependence on a single contractor for critical healthcare IT infrastructure.
Challenges in ensuring interoperability with other existing federal healthcare systems.

Positive Signals

Focus on modernization and scalable architecture suggests a forward-looking approach.
Firm Fixed Price contract provides cost predictability.
Full and open competition indicates a robust bidding process.
Long contract duration allows for sustained development and improvement.

Sector Analysis

This contract falls within the IT services sector, specifically custom computer programming. The federal government is a significant consumer of such services, particularly for maintaining and modernizing complex legacy systems. The Centers for Medicare and Medicaid Services (CMS) invests heavily in IT to manage healthcare programs, making this contract a key component of their operational infrastructure. Comparable spending benchmarks for large-scale IT modernization projects within federal health agencies can range from tens to hundreds of millions of dollars.

Small Business Impact

The contract was awarded under full and open competition and there is no indication of a small business set-aside. While SOFTRAMS LLC is not explicitly identified as a small business, the contract's size and nature suggest potential for significant subcontracting opportunities. It will be important to monitor subcontracting plans to ensure that small businesses have a fair opportunity to participate in this project and contribute to the federal IT ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. The firm fixed-price nature of the contract provides a degree of accountability for SOFTRAMS LLC to deliver within the agreed-upon budget. Transparency will be facilitated through regular reporting requirements and potentially through public contract databases. The Inspector General's office for HHS may also provide oversight depending on the nature of any potential issues or audits.

Related Government Programs

Centers for Medicare and Medicaid Services (CMS) IT Modernization Efforts
Healthcare Information Technology Services
Accountable Care Organization (ACO) Programs
Custom Software Development Contracts
Federal Health IT Infrastructure

Risk Flags

Potential for scope creep
Cybersecurity risks during modernization
Dependence on contractor for critical infrastructure
Interoperability challenges with existing systems

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $53.0 million to SOFTRAMS LLC. THE INNOVATIVE DESIGN, DEVELOPMENT AND OPERATIONS CONTRACT (IDDOC) WILL CONTINUE TO DEVELOP, MAINTAIN, AND MODERNIZE THE ACCOUNTABLE CARE ORGANIZATION - OPERATIONAL SYSTEM (ACO-OS) AND 4 INNOVATION (4I), AND PROVIDE A MODERN SCALABLE ARCHITECTURE, PL

Who is the contractor on this award?

The obligated recipient is SOFTRAMS 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 $53.0 million.

What is the period of performance?

Start: 2024-02-28. End: 2027-02-27.

What is the track record of SOFTRAMS LLC in delivering large-scale federal IT modernization projects?

Information regarding SOFTRAMS LLC's specific track record in delivering large-scale federal IT modernization projects is not detailed in the provided data. A comprehensive assessment would require reviewing past performance evaluations, contract history, and any publicly available project outcomes. Federal agencies typically maintain performance metrics for contractors, which would be crucial for understanding their reliability and capability in handling complex systems like the ACO-OS. Without this specific data, it's difficult to definitively assess their past performance in similar contexts. Further investigation into their contract history with HHS or other agencies would be necessary.

How does the $53 million contract value compare to similar IT modernization efforts within HHS or other federal health agencies?

The $53 million contract value for the IDDOC, specifically for the modernization of ACO-OS and 4I systems, appears to be within a reasonable range for large-scale federal IT modernization projects. Similar initiatives within HHS and other health-focused agencies often involve substantial investments due to the complexity of healthcare data, regulatory compliance (like HIPAA), and the need for high availability and security. For instance, contracts for electronic health record (EHR) system upgrades or the development of new health data platforms can easily reach tens or hundreds of millions of dollars over several years. The firm fixed-price nature of this contract also suggests a defined scope, which can help in cost management compared to cost-plus contracts.

What are the primary risks associated with modernizing the ACO-OS and 4I systems under this contract?

The primary risks associated with modernizing the ACO-OS and 4I systems include technical challenges in integrating new architecture with legacy components, potential scope creep if requirements are not precisely defined, and cybersecurity vulnerabilities during the transition phase. There's also a risk of vendor lock-in if the new architecture is not designed with interoperability and future flexibility in mind. Furthermore, ensuring minimal disruption to ongoing operations of accountable care organizations during the modernization process is critical. The long duration of the contract (three years) also introduces risks related to changing technological landscapes and evolving healthcare policies that might necessitate adjustments to the modernization plan.

How effective is the firm fixed-price contract type in ensuring value for money for this IT modernization effort?

The firm fixed-price (FFP) contract type is generally effective in ensuring value for money for IT modernization efforts when the scope of work is well-defined and understood upfront. It shifts the risk of cost overruns to the contractor, SOFTRAMS LLC, incentivizing them to manage resources efficiently and complete the project within the agreed budget. This provides cost certainty for the government, allowing for predictable budgeting. However, if the scope is not clearly delineated or if unforeseen technical complexities arise, an FFP contract can sometimes lead to the contractor cutting corners on quality or scope to maintain profitability, or it might necessitate costly change orders. Close monitoring of deliverables and performance is still essential to ensure the government receives the intended value.

What is the historical spending pattern for ACO-OS and 4I system maintenance and modernization within CMS?

Historical spending patterns for the ACO-OS and 4I system maintenance and modernization within CMS are not detailed in the provided data. To assess this, one would need to examine previous contract awards related to these specific systems or similar IT infrastructure within CMS over past fiscal years. Understanding the trend in spending—whether it has been increasing, decreasing, or stable—would provide context for the current $53 million award. It would also help in identifying if this contract represents a significant shift in investment or a continuation of established spending levels for maintaining and evolving these critical healthcare IT platforms.

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 › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3100 CLARENDON BLVD STE 1400, ARLINGTON, VA, 22201

Business Categories: Category Business, HUBZone Firm, Limited Liability Corporation, Minority Owned Business, Partnership or Limited Liability Partnership, Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $87,762,116

Exercised Options: $52,999,439

Current Obligation: $52,999,439

Actual Outlays: $35,615,059

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F372DA

IDV Type: FSS

Timeline