HHS awards $39.8M contract for custom computer programming to SOFTRAMS LLC under full and open competition

Contract Overview

Contract Amount: $39,802,078 ($39.8M)

Contractor: Softrams LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2024-06-05

End Date: 2026-06-04

Contract Duration: 729 days

Daily Burn Rate: $54.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: CONSISTS OF A 12 MONTH BASE PERIOD AND (4) FOUR (12) MONTH OPTION PERIODS

Place of Performance

Location: LEESBURG, LOUDOUN County, VIRGINIA, 20176

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $39.8 million to SOFTRAMS LLC for work described as: CONSISTS OF A 12 MONTH BASE PERIOD AND (4) FOUR (12) MONTH OPTION PERIODS Key points: 1. The contract's value of $39.8 million over a potential 5-year period suggests a significant investment in IT services. 2. Full and open competition indicates a broad market search, potentially leading to competitive pricing. 3. The fixed-price contract type shifts performance risk to the contractor, SOFTRAMS LLC. 4. The contract is for custom computer programming services, aligning with the Centers for Medicare and Medicaid Services' (CMS) need for specialized IT solutions. 5. The duration of up to 729 days (including option periods) allows for sustained support. 6. The award to SOFTRAMS LLC, a company with a presence in Virginia, highlights regional IT capabilities supporting federal needs.

Value Assessment

Rating: good

The contract's total value of $39.8 million over a maximum of 60 months (12-month base + 4 option years) averages to approximately $663,368 per month. Benchmarking this against similar custom computer programming services contracts is challenging without more specific service details. However, the firm-fixed-price structure suggests that the government has negotiated a set price for the defined scope of work, which can be advantageous if the contractor can deliver efficiently. The award amount appears reasonable for a federal contract of this duration and scope, assuming the services are complex and require specialized expertise.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning that all responsible sources were permitted to submit a bid. The data indicates there were two bids received. While two bidders is a relatively low number for a full and open competition, it still suggests that the government sought a broad range of potential contractors. The level of competition, even if limited to two, should have provided some price discovery and ensured that the selected contractor, SOFTRAMS LLC, offered a competitive proposal.

Taxpayer Impact: A full and open competition, even with a limited number of bids, generally benefits taxpayers by encouraging multiple companies to vie for the contract, which can drive down costs and improve service quality compared to sole-source or limited competition scenarios.

Public Impact

The primary beneficiaries are the Centers for Medicare and Medicaid Services (CMS), which will receive custom computer programming services to support its operations. The services delivered are expected to enhance or maintain critical IT systems essential for healthcare program administration. The geographic impact is primarily within Virginia, where the contractor SOFTRAMS LLC is located, potentially supporting local IT jobs. The contract supports the federal IT workforce by engaging a private sector company for specialized programming needs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if requirements are not clearly defined and managed throughout the contract lifecycle.
Dependence on a single contractor for critical custom programming services could pose a risk if performance issues arise.
The limited number of bids (2) in a full and open competition might indicate potential challenges in attracting a wider pool of qualified bidders for this specific service area.

Positive Signals

The firm-fixed-price contract type incentivizes the contractor to manage costs effectively and deliver within the agreed-upon budget.
Awarding under full and open competition suggests a commitment to leveraging market competition to achieve best value.
The contract duration allows for a stable, long-term relationship, potentially leading to greater efficiency and expertise development by the contractor.

Sector Analysis

The federal IT services market is vast and highly competitive, with significant spending allocated to custom computer programming. This contract falls within the broader IT services sector, specifically focusing on software development and maintenance. Comparable spending benchmarks for custom programming services vary widely based on complexity, duration, and the specific technologies involved. Agencies like CMS often require highly specialized and secure IT solutions due to the sensitive nature of healthcare data, making contracts for custom development a necessity rather than a commodity purchase.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific benefits for the small business ecosystem stemming from a set-aside provision. The focus remains on larger, potentially more established IT service providers capable of fulfilling the requirements under full and open competition.

Oversight & Accountability

Oversight for this contract will likely be managed by the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. Accountability measures are embedded in the firm-fixed-price contract type, which holds SOFTRAMS LLC responsible for delivering the specified services within the agreed-upon cost. Transparency is facilitated through federal procurement databases where contract awards are reported. While specific Inspector General (IG) jurisdiction isn't detailed here, the HHS OIG has broad authority to investigate fraud, waste, and abuse within the department's contracts.

Related Government Programs

Centers for Medicare and Medicaid Services IT Modernization
Federal Health IT Services
Custom Software Development Contracts
IT Services for Healthcare Agencies
Department of Health and Human Services IT Procurement

Risk Flags

Limited number of bids received under full and open competition.
Potential for scope creep in custom development projects.
Contractor performance risk, despite fixed-price structure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $39.8 million to SOFTRAMS LLC. CONSISTS OF A 12 MONTH BASE PERIOD AND (4) FOUR (12) MONTH OPTION PERIODS

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 $39.8 million.

What is the period of performance?

Start: 2024-06-05. End: 2026-06-04.

What is the track record of SOFTRAMS LLC with federal contracts, particularly with the Department of Health and Human Services?

Assessing the track record of SOFTRAMS LLC requires a review of its past performance on federal contracts. This would involve examining contract databases like SAM.gov or FPDS to identify previous awards, contract values, performance ratings, and any history of disputes or terminations. Specifically for HHS and CMS, understanding their prior engagement with SOFTRAMS LLC would reveal the contractor's experience in meeting the specific requirements and compliance standards of these agencies. A history of successful, on-time, and within-budget performance on similar custom programming projects would indicate a lower risk for this new award. Conversely, any past performance issues, such as missed deadlines, cost overruns, or quality deficiencies, would warrant closer scrutiny and potentially more robust oversight mechanisms for this current contract.

How does the awarded price of $39.8 million compare to similar custom computer programming services contracts awarded by federal agencies?

Benchmarking the $39.8 million contract value requires comparing it against similar custom computer programming services contracts awarded by federal agencies, considering factors like contract duration, scope of work, complexity, and the specific IT skills required. Without detailed service descriptions, a precise comparison is difficult. However, federal IT services contracts, especially those involving custom development for agencies like CMS, can range from hundreds of thousands to tens of millions of dollars annually. The average monthly cost implied by this contract ($663,368/month over 60 months) should be evaluated against market rates for senior software engineers, project managers, and other specialized IT professionals. If this contract covers a broad range of services or highly complex system development, the price may be within a reasonable range. However, a detailed analysis of the Statement of Work (SOW) and the contractor's proposed labor mix and rates would be necessary for a definitive value-for-money assessment.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Key risks for this contract include potential scope creep, where project requirements expand beyond the initial agreement, leading to cost overruns and schedule delays. Another risk is contractor performance failure, where SOFTRAMS LLC may not deliver the required quality or meet deadlines. Given the firm-fixed-price nature, the contractor bears the financial risk of cost overruns, but performance risk remains. Mitigation strategies typically involve robust contract management by CMS, including clear definition and control of the Statement of Work (SOW), regular performance reviews, and established communication channels. The limited number of bidders (two) could also pose a risk if the chosen contractor underperforms, as finding a replacement might be challenging. The government's mitigation includes performance clauses within the contract and the potential for exercising contract remedies if performance is unsatisfactory.

How effective is the 'full and open competition' strategy likely to be in ensuring cost savings and optimal service delivery for CMS?

The 'full and open competition' strategy is generally effective in promoting cost savings and optimal service delivery by maximizing the pool of potential bidders. This approach encourages competition, which typically drives down prices as contractors vie for the award. It also allows the government to select from a wider range of capabilities, potentially leading to better-suited solutions. However, the effectiveness can be influenced by factors such as the clarity of the solicitation, the complexity of the requirements, and the overall market size for the specific services. In this case, with only two bids received, the competitive pressure might be less intense than if numerous bids were submitted. Nonetheless, the process itself provides a structured framework for evaluating proposals based on both technical merit and price, aiming to secure the best value for CMS.

What is the historical spending pattern for custom computer programming services at CMS, and how does this award fit within that trend?

Analyzing historical spending patterns for custom computer programming services at CMS is crucial for contextualizing this $39.8 million award. CMS, being a large and complex agency managing critical healthcare programs, consistently requires significant IT support, including custom software development to adapt systems to evolving regulations, improve user experience, and enhance data management. Historical data would reveal whether CMS's spending on such services has been increasing, decreasing, or remaining stable. It would also show the typical contract values, durations, and types of services procured. This $39.8 million award, spanning up to five years, appears to be a substantial investment, suggesting a continued or potentially increased reliance on custom IT solutions to meet CMS's ongoing operational and strategic objectives. Understanding past spending trends helps assess if this award represents a typical procurement or a significant shift in IT investment strategy.

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: 2

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: $91,649,039

Exercised Options: $39,802,078

Current Obligation: $39,802,078

Actual Outlays: $34,122,566

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $1,859,117

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS35F372DA

IDV Type: FSS

Timeline