IHS awards $39.3M for health IT modernization support to MITRE Corporation

Contract Overview

Contract Amount: $39,321,885 ($39.3M)

Contractor: THE Mitre Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2020-10-23

End Date: 2023-01-23

Contract Duration: 822 days

Daily Burn Rate: $47.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Healthcare

Official Description: IHS HEALTH INFORMATION TECHNOLOGY MODERNIZATION STRATEGIC SUPPORT SERVICES

Place of Performance

Location: MC LEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $39.3 million to THE MITRE CORPORATION for work described as: IHS HEALTH INFORMATION TECHNOLOGY MODERNIZATION STRATEGIC SUPPORT SERVICES Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. The duration of the contract is 822 days, indicating a medium-term engagement. 4. The award amount of $39.3 million falls within a moderate spending range for IT modernization support. 5. The contractor, The MITRE Corporation, is a well-established entity in government contracting. 6. The services are categorized under 'All Other Professional, Scientific, and Technical Services', a broad category.

Value Assessment

Rating: good

The contract value of $39.3 million for health IT modernization support appears reasonable given the scope and duration. Benchmarking against similar contracts for strategic IT support services suggests this falls within typical spending ranges. The Cost Plus Fixed Fee (CPFF) contract type, while offering flexibility, requires diligent oversight to ensure cost efficiency and prevent scope creep. Without specific performance metrics or detailed cost breakdowns, a precise value-for-money assessment is challenging, but the established nature of the contractor and the competitive award process provide some assurance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit bids. This approach generally fosters a competitive environment, encouraging multiple bidders to offer their best pricing and technical solutions. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust competition was intended and likely occurred, which is beneficial for price discovery.

Taxpayer Impact: A competitive bidding process like full and open competition helps ensure that taxpayer dollars are used efficiently by driving down prices and encouraging innovation from multiple vendors.

Public Impact

The Indian Health Service (IHS) benefits from enhanced health information technology capabilities. Services delivered aim to modernize and improve the strategic support for IHS IT systems. The geographic impact is primarily within the areas served by the Indian Health Service, potentially improving healthcare delivery to Native American communities. Workforce implications may include the need for skilled IT professionals to implement and manage the modernized systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can incentivize higher costs if not rigorously managed.
The broad 'All Other Professional, Scientific, and Technical Services' category lacks specificity, making detailed performance evaluation more complex.
Lack of specific performance metrics or detailed cost breakdowns hinders a precise value-for-money assessment.

Positive Signals

Awarded through full and open competition, indicating a competitive process.
The contractor, The MITRE Corporation, has a strong track record in government IT and technical services.
The contract duration of over two years suggests a commitment to sustained IT modernization efforts.

Sector Analysis

The health IT sector is a critical and growing area within federal spending, driven by the need for interoperability, data security, and improved patient care. This contract fits within the broader landscape of federal efforts to modernize IT infrastructure across agencies. Comparable spending benchmarks for strategic IT support services can vary widely, but contracts in the tens of millions are common for significant modernization initiatives. The market includes a mix of large system integrators, specialized IT consultancies, and federally funded research and development centers like MITRE.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. As it was awarded under full and open competition, it is unlikely that small businesses were exclusively targeted. However, The MITRE Corporation, as a large contractor, may engage small businesses as subcontractors to fulfill specific needs, though this is not explicitly detailed in the award information. The impact on the small business ecosystem would depend on whether subcontracting opportunities were made available.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Health and Human Services (HHS) and the Indian Health Service (IHS). As a Cost Plus Fixed Fee contract, rigorous financial oversight and performance monitoring are crucial to ensure costs remain justified and deliverables are met. Transparency is generally facilitated through federal procurement databases like FPDS-NG. The Inspector General of HHS would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

IHS Electronic Health Record Modernization
HHS Health Information Technology Initiatives
Federal IT Modernization Programs
Government Professional and Technical Services Contracts

Risk Flags

Cost Plus Fixed Fee contract type requires careful monitoring to prevent cost overruns.
Broad NAICS code may indicate a wide range of services, requiring clear performance metrics.
Lack of specific competition details (number of bidders) limits analysis of price discovery effectiveness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $39.3 million to THE MITRE CORPORATION. IHS HEALTH INFORMATION TECHNOLOGY MODERNIZATION STRATEGIC SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is THE MITRE CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Indian Health Service).

What is the total obligated amount?

The obligated amount is $39.3 million.

What is the period of performance?

Start: 2020-10-23. End: 2023-01-23.

What is The MITRE Corporation's track record with the Indian Health Service and similar health IT modernization contracts?

The MITRE Corporation has a long-standing history of supporting government agencies, including the Department of Health and Human Services (HHS) and its components like the Indian Health Service (IHS), across a wide range of technical and strategic initiatives. MITRE operates as a federally funded research and development center (FFRDC), which often positions it to tackle complex, mission-critical challenges. While specific details on past IHS contracts are not provided here, MITRE's general expertise in areas such as health IT, cybersecurity, data analytics, and systems engineering suggests a strong capability to deliver on this modernization effort. Their FFRDC status implies a focus on objective analysis and technical guidance rather than solely on product delivery, which can be valuable for strategic support services. Their extensive experience across various government health programs provides a solid foundation for understanding the unique needs and challenges within the IHS.

How does the $39.3 million award compare to other federal health IT modernization contracts?

The $39.3 million award for IHS Health Information Technology Modernization Strategic Support Services falls within a moderate range for federal health IT modernization efforts. Larger, enterprise-wide EHR system implementations or major infrastructure overhauls can easily reach hundreds of millions or even billions of dollars. However, for strategic support, consulting, and specialized technical services aimed at modernization, an award of this magnitude over approximately two years is quite common. For instance, other agencies might award similar amounts for specific phases of IT modernization, cybersecurity enhancements, or data analytics platform development. The key differentiator here is the 'strategic support services' aspect, which often involves planning, analysis, and guidance rather than direct system implementation. Compared to contracts focused solely on software licenses or hardware procurement, this award reflects a focus on expertise and advisory services.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for IT modernization?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for IT modernization revolve around cost control and potential for scope creep. In a CPFF arrangement, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fixed fee incentivizes the contractor to control costs to maximize profit, there's a risk that the 'cost' component could escalate significantly if the project's scope is not tightly defined or if unforeseen technical challenges arise. This can lead to the government paying more than initially anticipated. Furthermore, if the fixed fee is set too low, the contractor might be less motivated to exert maximum effort, or conversely, if the fee is too high, it represents a less efficient use of taxpayer funds. Effective management, clear requirements, and robust oversight are critical to mitigating these risks and ensuring the government receives good value.

How effective is 'full and open competition' in ensuring value for money in IT services contracts?

Full and open competition is generally considered the most effective method for ensuring value for money in IT services contracts. By allowing all responsible sources to compete, it maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive bids that reflect fair market prices and innovative solutions. This broad competition drives down costs as contractors vie for the award. It also provides the government with a wider range of technical approaches and capabilities to choose from, increasing the chances of selecting the best-suited solution. While the administrative effort to manage a full and open competition can be higher, the potential savings and improved outcomes typically outweigh these costs. The transparency inherent in this process also enhances accountability.

What is the typical duration for federal IT modernization support contracts of this value?

Federal IT modernization support contracts with values in the range of $30-50 million typically have durations that vary significantly based on the specific nature of the services. Contracts focused on strategic planning, analysis, and advisory services, like this one described as 'strategic support services,' often range from 1 to 3 years. This allows sufficient time for in-depth assessment, recommendation development, and initial implementation guidance. Contracts involving direct system implementation, integration, or large-scale infrastructure upgrades might have longer durations, potentially spanning 3 to 5 years or more, especially if they are part of a multi-year modernization program. The 822-day duration (approximately 2.25 years) for this IHS contract aligns well with the expected timeframe for comprehensive strategic IT support services, providing adequate time for the contractor to deliver meaningful impact without being excessively long.

What does the NAICS code 541990 imply about the services provided under this contract?

The North American Industry Classification System (NAICS) code 541990, 'All Other Professional, Scientific, and Technical Services,' is a broad category that encompasses a wide array of services not classified elsewhere. For this contract, it implies that the services provided by The MITRE Corporation are specialized and technical in nature, focusing on professional expertise, scientific knowledge, or technical problem-solving. This could include activities such as management consulting, research and development services (except biotechnology), technical testing and analysis, environmental consulting, or IT strategy and planning, among others. The broadness of this code suggests the contract may involve a diverse set of tasks that don't fit neatly into more specific IT or professional service categories, emphasizing the 'strategic support' aspect of the contract.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

Product/Service Code: RESEARCH AND DEVELOPMENT › General Science and Technology R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 7515 COLSHIRE DR, MC LEAN, VA, 22102

Business Categories: Category Business, Corporate Entity Tax Exempt, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $66,258,332

Exercised Options: $39,321,885

Current Obligation: $39,321,885

Actual Outlays: $37,551,520

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $5,986,564

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 75FCMC18D0047

IDV Type: IDC

Timeline