HHS awards $108.5M IT services contract to Deloitte, emphasizing computer systems design

Contract Overview

Contract Amount: $108,514,293 ($108.5M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Health and Human Services

Start Date: 2021-12-16

End Date: 2027-01-23

Contract Duration: 1,864 days

Daily Burn Rate: $58.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IT SERVICES

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $108.5 million to DELOITTE CONSULTING LLP for work described as: IT SERVICES Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract's duration of 1864 days indicates a long-term need for IT services. 3. Firm Fixed Price contract type aims to control costs and provide budget certainty. 4. The award to a large, established firm like Deloitte suggests a focus on experience and capability. 5. The contract falls under the 'Computer Systems Design Services' category, indicating specialized IT support. 6. The significant dollar value points to a substantial project within the agency's IT infrastructure.

Value Assessment

Rating: good

Benchmarking the value of this $108.5 million contract requires comparison to similar large-scale IT service contracts within the federal government, particularly those for computer systems design. Given the duration and scope, the pricing appears to be within a reasonable range for a firm fixed-price agreement with a major contractor. However, a detailed cost breakdown and comparison against industry benchmarks for specific services rendered would be necessary for a more precise value assessment. The absence of specific performance metrics in the provided data makes a definitive value-for-money judgment challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 4 bids suggests a moderate level of competition for this significant IT services requirement. A higher number of bidders might typically lead to more aggressive pricing, but the fixed-price nature of the contract and the specialized requirements could influence the number and competitiveness of the bids received. The agency's decision to use full and open competition is generally a positive sign for price discovery.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing achieved through a broad solicitation process. This approach increases the likelihood that the government is obtaining services at a fair market value, minimizing the risk of overpayment.

Public Impact

The Department of Health and Human Services (HHS) and its National Institutes of Health (NIH) are the primary beneficiaries, receiving critical IT systems design services. The contract supports the ongoing operations and potential modernization of NIH's IT infrastructure. Services delivered likely include system analysis, design, integration, and potentially implementation of computer systems. The geographic impact is primarily within Virginia, where the contractor is located, but the IT services support a national health research agency. Workforce implications may include employment opportunities for IT professionals within Deloitte and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in due to the long contract duration and specialized nature of IT services.
Reliance on a single large contractor may limit flexibility in adapting to rapidly changing technological needs.
Ensuring continued cost-effectiveness over the multi-year term requires diligent oversight and performance management.

Positive Signals

Awarded through full and open competition, indicating a robust and fair bidding process.
Firm Fixed Price contract type provides cost certainty and budget predictability for the agency.
The selection of a well-established contractor like Deloitte suggests a focus on proven capabilities and reliability.
The contract duration allows for sustained support and development of critical IT systems.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computer systems design. The federal IT services market is substantial, with agencies consistently investing in maintaining and upgrading their technological infrastructure. This contract represents a significant portion of spending within the specialized niche of systems design, which is crucial for developing and integrating complex IT solutions. Comparable spending benchmarks would involve looking at other large, multi-year IT system design and integration contracts awarded by agencies like HHS, DOD, or GSA.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this contract. This suggests that the primary focus was on securing the necessary technical expertise and capabilities, likely from larger, established firms. There is no explicit information on subcontracting plans for small businesses. Without specific subcontracting goals, the direct impact on the small business ecosystem for this particular award is likely minimal, though larger prime contractors may engage small businesses for specialized support.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the National Institutes of Health (NIH). Performance monitoring, adherence to the firm fixed-price terms, and delivery of services according to the contract statement of work are key accountability measures. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected or identified during the contract's performance.

Related Government Programs

IT Professional Services
Computer Systems Design
Health Information Technology Services
Federal Civilian IT Contracts
Department of Health and Human Services IT Spending

Risk Flags

Long-term contract duration may pose risks related to technological obsolescence.
Firm Fixed Price contracts can be challenging to manage if scope evolves significantly.
Reliance on a single large contractor could limit future flexibility.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $108.5 million to DELOITTE CONSULTING LLP. IT SERVICES

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING LLP.

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 $108.5 million.

What is the period of performance?

Start: 2021-12-16. End: 2027-01-23.

What is Deloitte Consulting LLP's track record with the Department of Health and Human Services, particularly on similar IT service contracts?

Deloitte Consulting LLP has a significant history of contracting with the Department of Health and Human Services (HHS) across various IT and professional services. Analyzing past awards reveals a pattern of Deloitte securing large, complex contracts related to health IT modernization, data analytics, and systems integration. For instance, they have been involved in projects supporting agencies within HHS like the Centers for Medicare & Medicaid Services (CMS) and the Food and Drug Administration (FDA). Their track record generally indicates a capacity to handle substantial federal IT requirements. However, a deeper dive into specific performance reviews, past performance evaluations, and any documented issues on prior HHS contracts would be necessary to fully assess their suitability and reliability for this particular $108.5 million award.

How does the awarded price of $108.5 million compare to similar large-scale IT systems design contracts awarded by federal agencies in the past two years?

The $108.5 million award for IT systems design services over approximately five years (from December 2021 to January 2027) places it in the category of significant federal IT procurements. To benchmark this value, one would compare it against other firm-fixed-price contracts for similar services (e.g., computer systems design, IT integration, enterprise architecture) awarded to large system integrators by agencies like HHS, GSA, or DOD. For example, contracts in the $20-50 million annual range for comprehensive IT support are common. A $108.5 million contract, averaging over $20 million per year, suggests a substantial scope, potentially encompassing enterprise-wide system design, development, and integration. Without specific details on the deliverables and labor mix, a precise comparison is difficult, but the price appears commensurate with the scale and duration typical for such major federal IT endeavors.

What are the primary risks associated with a long-term (1864 days) firm-fixed-price IT services contract of this magnitude?

A primary risk with long-term, firm-fixed-price IT contracts is the potential for scope creep or evolving technological requirements that may not be adequately captured in the initial agreement. If the contractor is locked into a fixed price for services that become more complex or require new technologies, it can lead to disputes or a decline in service quality if not managed proactively. For the government, the risk is paying for outdated solutions or services that no longer meet the agency's needs by the end of the contract term. Conversely, if the contractor significantly underestimates the effort or costs, they may incur losses, potentially impacting their financial stability and ability to deliver. Effective contract management, clear change control processes, and regular performance reviews are crucial to mitigate these risks.

How effective is 'full and open competition' in ensuring competitive pricing for specialized IT services like computer systems design?

Full and open competition is generally considered the most effective method for ensuring competitive pricing, as it allows all responsible sources to submit proposals. For specialized IT services like computer systems design, this means a wider pool of potential contractors can compete, theoretically driving down prices through market forces. However, the effectiveness can be influenced by the specificity of the requirement. If the need is highly specialized, the number of capable bidders might be limited, reducing the competitive pressure. Furthermore, the structure of the competition (e.g., best value vs. lowest price technically acceptable) and the clarity of the evaluation criteria play a significant role. While full and open competition provides the framework, the actual outcome depends on the market dynamics and the agency's procurement strategy.

What historical spending patterns exist within HHS for computer systems design services, and how does this award fit within them?

The Department of Health and Human Services (HHS) consistently allocates substantial funds towards IT services, including computer systems design, to support its vast mission. Historical spending data reveals a trend of significant investments in modernizing health IT infrastructure, data management systems, and research computing capabilities. Awards for computer systems design often range from moderate to very large, depending on the scope, such as enterprise-wide system overhauls or the development of new research platforms. This $108.5 million contract aligns with HHS's pattern of awarding large, multi-year contracts to capable vendors to address complex IT needs. It suggests a continued strategic focus on enhancing the technological backbone that supports public health initiatives and medical research.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: C-86998-O

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Deloitte Financial Advisory Services LLP

Address: 1725 DUKE ST, ALEXANDRIA, VA, 22314

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $138,207,685

Exercised Options: $108,514,293

Current Obligation: $108,514,293

Actual Outlays: $83,290,792

Subaward Activity

Number of Subawards: 18

Total Subaward Amount: $27,831,731

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSN316201200018W

IDV Type: GWAC

Timeline