HHS awards $90M contract for Unified Financial Management System support to Deloitte Consulting LLP

Contract Overview

Contract Amount: $89,725,043 ($89.7M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Health and Human Services

Start Date: 2024-09-27

End Date: 2027-01-20

Contract Duration: 845 days

Daily Burn Rate: $106.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIXED PRICE REDETERMINATION

Sector: IT

Official Description: BASE YEAR AWARD THE DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS), ASSISTANT SECRETARY FOR FINANCIAL RESOURCES (ASFR), UNIFIED FINANCIAL MANAGEMENT SYSTEM (UFMS), SYSTEMS INTEGRATION (SI) AND HOSTING ADMINISTRATION (SIHA) POP 09/27/2024-09/26/2025.

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $89.7 million to DELOITTE CONSULTING LLP for work described as: BASE YEAR AWARD THE DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS), ASSISTANT SECRETARY FOR FINANCIAL RESOURCES (ASFR), UNIFIED FINANCIAL MANAGEMENT SYSTEM (UFMS), SYSTEMS INTEGRATION (SI) AND HOSTING ADMINISTRATION (SIHA) POP 09/27/2024-09/26/2025. Key points: 1. The contract focuses on systems integration and hosting administration for HHS's financial management system. 2. Deloitte Consulting LLP, a major federal contractor, secured this award. 3. The contract is a delivery order under a larger contract vehicle. 4. The base year award is substantial, indicating significant ongoing support needs. 5. The fixed-price redetermination contract type suggests potential for cost adjustments. 6. The contract duration is over two years, implying a long-term need for these services.

Value Assessment

Rating: good

The base year award of approximately $90 million for computer systems design services appears to be within a reasonable range for large-scale federal IT support contracts. Benchmarking against similar contracts for financial system integration and hosting would provide a more precise value assessment. The fixed-price redetermination structure allows for some flexibility while aiming for cost control, but requires careful monitoring of the redetermination process to ensure fair pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of three bidders suggests a competitive environment, which generally leads to better pricing and service offerings for the government. The specific details of the bidding process and the evaluation criteria would further illuminate the effectiveness of the competition.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives down costs through market forces and encourages innovation among potential bidders, ensuring the government receives the best value.

Public Impact

Federal employees within HHS will benefit from improved financial management systems, leading to more efficient operations. The contract ensures the continued availability and integration of critical financial systems supporting HHS's mission. The services provided are essential for the accurate tracking and management of federal funds across the department. The contract supports IT professionals and system administrators, potentially creating or maintaining jobs in these fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The fixed-price redetermination contract type can introduce cost uncertainty if not managed rigorously.
Reliance on a single vendor for critical system integration and hosting could pose long-term risks if not properly overseen.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that likely yielded favorable terms.
The contract is a delivery order under a larger vehicle, implying established procurement processes and potentially pre-vetted capabilities.
The base year award is substantial, indicating a significant investment in a critical system, suggesting a commitment to its long-term viability.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a significant segment of the federal IT market. This sector encompasses a wide range of services, including custom software development, IT integration, and hosting. Spending in this area is consistently high across federal agencies as they modernize legacy systems and adopt new technologies to improve operational efficiency and service delivery. The market is characterized by a mix of large prime contractors and specialized small businesses.

Small Business Impact

The contract was awarded through full and open competition and does not indicate a small business set-aside. While the prime contractor is Deloitte Consulting LLP, a large business, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on the prime contractor's strategy and the specific requirements of the systems integration and hosting tasks.

Oversight & Accountability

Oversight for this contract will likely be managed by the Assistant Secretary for Financial Resources (ASFR) within HHS, given its focus on the Unified Financial Management System. The contract's delivery order structure suggests it falls under an existing contract vehicle, which would have its own oversight mechanisms. Transparency will depend on the reporting requirements within the contract and the agency's commitment to public disclosure of contract performance data.

Related Government Programs

HHS Financial Management Systems
Federal Financial Management Systems
IT Systems Integration Services
Cloud Hosting Services
Enterprise Resource Planning (ERP) Systems

Risk Flags

Potential for cost overruns due to fixed-price redetermination.
Vendor lock-in risk for critical financial systems.
Performance degradation impacting financial operations.
Cybersecurity vulnerabilities in integrated systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $89.7 million to DELOITTE CONSULTING LLP. BASE YEAR AWARD THE DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS), ASSISTANT SECRETARY FOR FINANCIAL RESOURCES (ASFR), UNIFIED FINANCIAL MANAGEMENT SYSTEM (UFMS), SYSTEMS INTEGRATION (SI) AND HOSTING ADMINISTRATION (SIHA) POP 09/27/2024-09/26/2025.

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 $89.7 million.

What is the period of performance?

Start: 2024-09-27. End: 2027-01-20.

What is Deloitte Consulting LLP's track record with HHS and similar federal financial management systems?

Deloitte Consulting LLP is a major federal contractor with extensive experience in IT services, including systems integration, cloud hosting, and financial management solutions for various government agencies. Their past performance with HHS and other departments on large-scale financial system modernization projects would be a key factor in their selection. A review of past performance evaluations and any contract disputes or awards would provide further insight into their reliability and capability in delivering complex IT services for critical financial infrastructure.

How does the $90 million base year award compare to historical spending on the Unified Financial Management System?

To assess the value, historical spending data for the Unified Financial Management System (UFMS) prior to this award would be crucial. Comparing the $90 million base year award to previous annual expenditures on UFMS support, maintenance, and upgrades can indicate whether this represents an increase, decrease, or stable level of investment. Understanding the scope of work covered by this award versus previous periods is also important; if this award encompasses expanded services or a new phase of development, a higher cost might be justified. Without historical context, it's difficult to definitively state if this award represents a favorable or unfavorable financial commitment.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks include potential cost overruns due to the fixed-price redetermination structure, performance issues in systems integration or hosting, and vendor lock-in. Mitigation strategies likely involve rigorous oversight of the redetermination process, clearly defined performance metrics and service level agreements (SLAs), and contingency planning for system failures. The government's ability to manage these risks effectively will depend on the expertise of the contracting officers and technical monitors assigned to the contract.

How effective is the Unified Financial Management System (UFMS) in supporting HHS's mission?

The effectiveness of the UFMS is critical to HHS's ability to manage its vast financial resources and execute its mission. While this contract focuses on the technical support (SI and Hosting), the underlying system's performance, user satisfaction, and its ability to meet evolving regulatory and operational requirements are paramount. Assessing UFMS effectiveness would involve examining metrics related to financial reporting accuracy, transaction processing times, system uptime, and user feedback from HHS personnel. The continued investment in its support suggests it is considered vital, but its overall impact on mission delivery requires a broader evaluation.

What is the typical duration and cost for similar federal IT systems integration and hosting contracts?

Federal IT contracts for systems integration and hosting can vary significantly in duration and cost depending on the complexity and scale of the systems involved. Contracts can range from one to five years, with options for extensions. Costs can range from a few million dollars for smaller projects to hundreds of millions or even billions for large enterprise-wide systems. The $90 million base year award for an 845-day period (approx. 2.3 years) for a department-wide financial system suggests it is a significant but not exceptionally large contract within the federal IT landscape, aligning with typical investments in critical infrastructure.

Industry Classification

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

Solicitation ID: C-116771-O

Offers Received: 3

Pricing Type: FIXED PRICE REDETERMINATION (A)

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: $343,550,469

Exercised Options: $89,725,043

Current Obligation: $89,725,043

Actual Outlays: $17,181,999

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $68,492,817

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HHSN316201200018W

IDV Type: GWAC

Timeline