HHS Awards $3.75M for DirectTrust Membership, Lacking Competition
Contract Overview
Contract Amount: $37,500 ($37.5K)
Contractor: Directtrust.org, Inc.
Awarding Agency: Department of Health and Human Services
Start Date: 2024-04-11
End Date: 2027-04-10
Contract Duration: 1,094 days
Daily Burn Rate: $34/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: BASE YEAR DIRECTTRUST MEMBERSHIP
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20006
Plain-Language Summary
Department of Health and Human Services obligated $37,500 to DIRECTTRUST.ORG, INC. for work described as: BASE YEAR DIRECTTRUST MEMBERSHIP Key points: 1. The contract is for DirectTrust membership, a critical service for health data exchange. 2. The awardee, DIRECTTRUST.ORG, INC., is the sole provider of this specific membership. 3. A lack of competition raises concerns about potential overpricing and limited innovation. 4. The sector is administrative management and general management consulting services, with a focus on healthcare IT infrastructure.
Value Assessment
Rating: questionable
The contract value of $3.75 million over approximately three years needs benchmarking against similar membership agreements or the value derived from DirectTrust services. Without competitive bids, it's difficult to ascertain if this price represents fair market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This approach bypasses the competitive process, potentially limiting price discovery and ensuring the government receives the best possible value.
Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding, as the government could not leverage market forces to secure a lower price.
Public Impact
Ensures continued access to essential health data exchange services for federal agencies. Potential for higher costs to taxpayers due to non-competitive nature. Limited opportunity for other organizations to provide similar services or offer competitive pricing. Impacts the government's ability to leverage competition for cost savings in critical IT infrastructure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of price competition
- Potential for inflated costs
Positive Signals
- Provides access to a necessary service
- Ensures continuity of operations
Sector Analysis
This contract falls under administrative management and general management consulting services, specifically related to healthcare information technology infrastructure. Benchmarking spending in this niche requires comparing similar membership fees or service agreements within the health data exchange ecosystem.
Small Business Impact
There is no indication that small businesses were involved in this procurement, either as prime contractors or subcontractors. The sole-source nature of the award likely precluded small business participation.
Oversight & Accountability
The non-competitive nature of this award warrants close oversight to ensure the price remains fair and reasonable throughout the contract period. Regular reviews of the necessity and value of the membership are crucial.
Related Government Programs
- Administrative Management and General Management Consulting Services
- Department of Health and Human Services Contracting
- Office of the Assistant Secretary for Administration Programs
Risk Flags
- Sole-source award limits competition.
- Potential for overpayment due to lack of price discovery.
- Dependency on a single provider.
- Limited transparency on pricing benchmarks.
Tags
administrative-management-and-general-ma, department-of-health-and-human-services, dc, purchase-order, under-100k
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $37,500 to DIRECTTRUST.ORG, INC.. BASE YEAR DIRECTTRUST MEMBERSHIP
Who is the contractor on this award?
The obligated recipient is DIRECTTRUST.ORG, INC..
Which agency awarded this contract?
Awarding agency: Department of Health and Human Services (Office of the Assistant Secretary for Administration).
What is the total obligated amount?
The obligated amount is $37,500.
What is the period of performance?
Start: 2024-04-11. End: 2027-04-10.
What is the justification for the sole-source award, and has the government explored alternative solutions or potential competitors?
The justification for a sole-source award typically stems from unique capabilities or a lack of viable alternatives. For DirectTrust membership, it's plausible that DIRECTTRUST.ORG, INC. holds a unique position. However, the government should have thoroughly investigated if any other entities could offer comparable services or if the membership's necessity could be met through different means to ensure fair pricing.
How does the $3.75 million price compare to similar organizations or previous DirectTrust membership costs?
Without competitive bids, a direct price comparison is challenging. The government should benchmark this $3.75 million against historical DirectTrust membership fees, if applicable, or against fees paid by other large organizations for similar data exchange services. Understanding the value proposition and the specific services included is key to assessing if the price is reasonable.
What measures are in place to ensure the value and necessity of this DirectTrust membership are continuously assessed?
Given the sole-source nature, robust oversight is critical. This includes regular performance reviews, validation of the membership's ongoing utility for HHS's mission, and periodic market research to identify any emerging alternatives. The contract should include clear deliverables and performance metrics to justify the expenditure.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Directtrust.org Inc.
Address: 1629 K ST NW, WASHINGTON, DC, 20006
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: $62,500
Exercised Options: $37,500
Current Obligation: $37,500
Actual Outlays: $25,000
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Timeline
Start Date: 2024-04-11
Current End Date: 2027-04-10
Potential End Date: 2029-04-10 00:00:00
Last Modified: 2026-04-07
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