NIH awards $2.7M contract to TWOTECH INC for development support, raising questions about competition

Contract Overview

Contract Amount: $2,719,078 ($2.7M)

Contractor: Twotech Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2023-03-01

End Date: 2026-05-24

Contract Duration: 1,180 days

Daily Burn Rate: $2.3K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: DEVELOPMENT SUPPORT FOR THE OFFICE OF EXTRAMURAL FINANCE AND INFORMATION ANALYSIS

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $2.7 million to TWOTECH INC for work described as: DEVELOPMENT SUPPORT FOR THE OFFICE OF EXTRAMURAL FINANCE AND INFORMATION ANALYSIS Key points: 1. Contract awarded on a non-competitive basis, limiting price discovery and potentially increasing costs. 2. The contract's duration of nearly four years suggests a need for sustained development support. 3. Fixed-price contract type aims to control costs, but the lack of competition is a concern. 4. The services fall under custom computer programming, a common area for federal IT spending. 5. The award to TWOTECH INC warrants scrutiny regarding past performance and value for money. 6. Geographic concentration in Maryland may indicate a focus on local talent or existing relationships.

Value Assessment

Rating: questionable

The contract value of $2.7 million over approximately 3.5 years is moderate for custom computer programming services. However, without competitive bidding, it is difficult to benchmark the pricing effectively against market rates or similar government contracts. The lack of competition raises concerns about whether the government secured the best possible value. Further analysis would be needed to compare TWOTECH INC's proposed rates to industry standards for similar skill sets and services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'NOT AVAILABLE FOR COMPETITION' basis, indicating a sole-source procurement. This means that only one vendor, TWOTECH INC, was solicited for this requirement. The lack of a competitive process prevents other qualified vendors from bidding, which can limit price discovery and potentially lead to higher costs for the government. It also suggests that the agency may have had specific reasons for not opening the competition, such as unique capabilities or a pre-existing relationship.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings that typically arise from a competitive bidding process. This can result in the government paying more than necessary for the services rendered.

Public Impact

The Office of Extramural Finance and Information Analysis within NIH will benefit from enhanced development support. Services delivered include custom computer programming, crucial for maintaining and improving information systems. The contract's geographic impact is centered in Maryland, where the contractor is located. Workforce implications may include the direct employment of IT professionals by TWOTECH INC to fulfill the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition for a significant contract value raises concerns about potential overpayment.
The sole-source nature of the award requires justification to ensure it was truly necessary.
Limited transparency into the selection process due to non-competitive award.

Positive Signals

The contract is a firm-fixed-price type, which helps in cost control if managed effectively.
The contract duration suggests a stable, ongoing need for these services, indicating potential for reliable support.
The award is to a single entity, potentially allowing for focused expertise and streamlined communication.

Sector Analysis

This contract falls within the IT services sector, specifically custom computer programming. The federal government is a major consumer of these services, with significant annual spending on software development, system integration, and IT support. Comparable spending benchmarks for custom programming services vary widely based on complexity, duration, and contractor expertise. The market is characterized by a mix of large system integrators and specialized small businesses.

Small Business Impact

The data indicates that this contract was not awarded as a small business set-aside (ss=false) and there is no explicit mention of subcontracting goals (sb=false). Therefore, this award does not appear to directly benefit small businesses through set-aside provisions. The lack of subcontracting requirements means that opportunities for small businesses to participate in this contract are not guaranteed and would depend on TWOTECH INC's own procurement decisions.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting agency, the National Institutes of Health (NIH), and the Department of Health and Human Services (HHS). Specific oversight mechanisms would include contract administration, performance monitoring, and financial audits. Transparency is limited due to the sole-source nature of the award. The Inspector General for HHS would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

NIH IT Modernization Efforts
Custom Software Development Services
Federal IT Services Procurement
Extramural Research Support Systems

Risk Flags

Sole-source award without clear justification
Potential for overpricing due to lack of competition
Limited transparency in procurement process

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $2.7 million to TWOTECH INC. DEVELOPMENT SUPPORT FOR THE OFFICE OF EXTRAMURAL FINANCE AND INFORMATION ANALYSIS

Who is the contractor on this award?

The obligated recipient is TWOTECH INC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $2.7 million.

What is the period of performance?

Start: 2023-03-01. End: 2026-05-24.

What is TWOTECH INC's track record with federal contracts, particularly with NIH or HHS?

A review of federal procurement data would be necessary to fully assess TWOTECH INC's track record. Information such as past contract awards, performance evaluations (if available), and any history of disputes or contract terminations would provide insight into their reliability and performance. Without specific data on their past performance, it is difficult to gauge their suitability beyond the agency's decision to award this contract on a sole-source basis. Agencies often rely on past performance as a key factor in sole-source justifications, suggesting TWOTECH INC may have a relevant history with the agency.

How does the $2.7 million contract value compare to similar custom computer programming services procured by NIH or HHS?

Benchmarking this $2.7 million contract against similar custom computer programming services requires access to a broader dataset of federal contracts. Factors such as the specific programming languages, complexity of the systems, required expertise, and contract duration significantly influence pricing. Given this contract is sole-source, a direct comparison is challenging. However, for contracts of similar duration (approx. 3.5 years) and scope, average values can range from hundreds of thousands to several million dollars. The firm-fixed-price nature suggests an attempt to cap costs, but the lack of competition makes a definitive value assessment difficult without more granular data on the services provided.

What are the specific risks associated with awarding a contract of this value on a sole-source basis?

The primary risk associated with sole-source awards of this magnitude is the potential for inflated pricing due to the absence of competition. Without competing bids, the government may not achieve the most favorable price. Another risk is reduced innovation, as there is less incentive for the contractor to propose novel or cost-saving solutions when they are the only option. Furthermore, it can create a perception of favoritism or a lack of due diligence in seeking the best value for taxpayer dollars. Ensuring a robust justification for the sole-source award is critical to mitigating these risks.

What is the expected effectiveness of the development support provided by TWOTECH INC for the Office of Extramural Finance and Information Analysis?

The effectiveness of the development support hinges on TWOTECH INC's technical capabilities, project management, and alignment with the NIH's specific needs for the Office of Extramural Finance and Information Analysis. The contract's focus on custom computer programming suggests it aims to enhance or maintain critical IT infrastructure. Success will be measured by the timely delivery of quality software, improved system performance, and the achievement of the office's operational goals. The firm-fixed-price structure incentivizes efficient delivery, but the sole-source nature means the agency must have high confidence in TWOTECH INC's ability to deliver as specified.

What has been the historical spending pattern for custom computer programming services by the National Institutes of Health?

The National Institutes of Health (NIH), as a major component of HHS, consistently spends significant amounts on IT services, including custom computer programming. Historical data would likely show a substantial and potentially growing investment in this area to support its vast research and administrative functions. Spending patterns are influenced by factors like modernization initiatives, evolving research needs, and the increasing reliance on digital platforms. Analyzing NIH's historical spending on NAICS code 541511 (Custom Computer Programming Services) would reveal trends in contract values, types of services procured, and the mix of large versus small business awards.

Are there any specific performance metrics or deliverables outlined in the contract that can be used to assess TWOTECH INC's performance?

The provided data does not detail specific performance metrics or deliverables. However, for a firm-fixed-price contract, especially one involving custom computer programming, such metrics are typically defined in the contract's Statement of Work (SOW) or Performance Work Statement (PWS). These would likely include milestones for software development phases, quality assurance standards, testing requirements, and final delivery criteria. Effective contract administration by NIH would involve tracking TWOTECH INC's progress against these defined metrics to ensure successful project completion and value for money.

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: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 10000 FALLS RD STE 206, POTOMAC, MD, 20854

Business Categories: 8(a) Program Participant, Asian Pacific American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Economically Disadvantaged Women Owned Small Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $3,951,813

Exercised Options: $2,719,078

Current Obligation: $2,719,078

Actual Outlays: $2,368,296

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline