SAIC awarded $45.5M for AHLTA/CHCS critical fixes and support, a 4-year contract

Contract Overview

Contract Amount: $45,533,386 ($45.5M)

Contractor: Science Applications International Corporation

Awarding Agency: General Services Administration

Start Date: 2011-02-14

End Date: 2015-02-13

Contract Duration: 1,460 days

Daily Burn Rate: $31.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: AHLTA AND CHCS CRITICAL FIXES AND SUPPORT

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22041

State: Virginia Government Spending

Plain-Language Summary

General Services Administration obligated $45.5 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: AHLTA AND CHCS CRITICAL FIXES AND SUPPORT Key points: 1. Contract value appears reasonable for a 4-year support and critical fix effort for complex healthcare IT systems. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract type is Cost Plus Fixed Fee, which can introduce cost overrun risks if not managed closely. 4. This contract supports the Department of Veterans Affairs (VA) healthcare IT infrastructure. 5. The contractor, Science Applications International Corporation (SAIC), has a significant presence in federal IT services.

Value Assessment

Rating: good

The contract value of approximately $45.5 million over four years averages to about $11.4 million annually. This is a moderate amount for supporting critical healthcare IT systems like AHLTA and CHCS, which are known for their complexity and importance to patient care. Benchmarking against similar large-scale IT support contracts for federal health systems suggests this pricing is within a reasonable range, assuming the scope of work includes significant development, integration, and maintenance activities. The Cost Plus Fixed Fee (CPFF) structure means that while the contractor's fee is fixed, the government bears the risk of cost overruns, necessitating strong oversight.

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 healthy level of competition for this requirement. A competitive process like this generally leads to better price discovery and potentially more innovative solutions as contractors vie for the award. The government received multiple proposals, allowing for a comparative evaluation of technical capabilities and pricing.

Taxpayer Impact: Taxpayers benefit from a competitive award process that aims to secure the best value for the government by encouraging multiple bidders to offer competitive pricing and technical solutions.

Public Impact

Veterans and healthcare providers benefit from the continued availability and improved functionality of critical healthcare IT systems (AHLTA and CHCS). Ensures the stability and performance of systems essential for patient care, medical records management, and clinical decision-making within the VA. Supports the operational readiness of the VA's IT infrastructure, impacting healthcare delivery across numerous facilities. The contract likely supports IT professionals and technical staff, contributing to employment within the federal IT services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type introduces potential for cost overruns if not rigorously managed.
Reliance on a single contractor for critical system fixes could pose risks if performance degrades or issues arise.
The complexity of AHLTA and CHCS means that unforeseen technical challenges could lead to schedule delays or increased costs.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
The contract duration of four years provides stability for critical system support.
The contractor, SAIC, is a large and experienced federal IT services provider with a track record in complex systems.

Sector Analysis

This contract falls within the broader federal IT services sector, specifically focusing on computer systems design and related services for healthcare applications. The market for federal healthcare IT is substantial, driven by the need to modernize legacy systems, improve data interoperability, and enhance patient care through technology. Comparable spending benchmarks for large-scale IT support and modernization contracts within agencies like the Department of Defense and the Department of Veterans Affairs often run into tens or hundreds of millions of dollars annually, reflecting the complexity and criticality of these systems.

Small Business Impact

This contract was awarded under full and open competition and does not indicate any specific small business set-aside. The prime contractor, Science Applications International Corporation (SAIC), is a large business. There is no explicit information provided regarding subcontracting plans for small businesses. The impact on the small business ecosystem is therefore neutral to potentially limited, unless SAIC proactively engages small businesses for specialized support or components.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA) and the specific program offices within the Department of Veterans Affairs (VA) that utilize AHLTA and CHCS. As a Cost Plus Fixed Fee contract, rigorous financial oversight is crucial to monitor costs and ensure the fixed fee is earned appropriately. The VA's Office of Inspector General (OIG) would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract. Transparency is generally maintained through contract award databases and reporting requirements.

Related Government Programs

AHLTA (Armed Forces Health Longitudinal Technology Application)
CHCS (Composite Health Care System)
Veterans Health Administration IT Modernization Programs
Federal Electronic Health Records (EHR) Systems Support
Department of Defense Healthcare IT Contracts

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Complexity of legacy healthcare IT systems can lead to unforeseen challenges.
Potential for vendor lock-in if contractor becomes indispensable for critical fixes.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $45.5 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. AHLTA AND CHCS CRITICAL FIXES AND SUPPORT

Who is the contractor on this award?

The obligated recipient is SCIENCE APPLICATIONS INTERNATIONAL CORPORATION.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $45.5 million.

What is the period of performance?

Start: 2011-02-14. End: 2015-02-13.

What is the historical spending trend for AHLTA and CHCS support and maintenance by the VA?

Historical spending data for AHLTA and CHCS support by the VA reveals a consistent and significant investment in these critical healthcare IT systems. Over the years, the VA has awarded numerous contracts, both large and small, for the maintenance, sustainment, and enhancement of these platforms. Annual spending has fluctuated based on specific modernization efforts, critical bug fixes, and evolving healthcare IT requirements. For instance, prior to this $45.5 million award, there would have been preceding contracts covering similar support functions. Analyzing the aggregate spending over the past decade would likely show a multi-billion dollar investment in these core systems, reflecting their central role in veteran healthcare delivery. This sustained investment underscores the ongoing need for robust IT infrastructure to manage patient records, facilitate clinical workflows, and ensure data security within the VA.

How does the Cost Plus Fixed Fee (CPFF) structure impact risk for this contract compared to other contract types?

The Cost Plus Fixed Fee (CPFF) structure places a significant portion of the financial risk on the government. In a CPFF contract, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing their profit. This contrasts with fixed-price contracts, where the contractor assumes more risk for cost overruns. For a contract involving critical fixes and support for complex systems like AHLTA and CHCS, where unforeseen technical challenges are common, the CPFF structure can provide flexibility. However, it necessitates stringent government oversight to ensure costs are reasonable and allocable. If not managed effectively, the government could face substantial cost increases beyond initial estimates. Other contract types, like Firm-Fixed-Price (FFP), would incentivize the contractor to control costs more aggressively but might lead to less willingness to address emergent, complex issues if they fall outside the original scope.

What is SAIC's track record with VA healthcare IT contracts?

Science Applications International Corporation (SAIC) has a substantial and long-standing track record of supporting the Department of Veterans Affairs (VA) with a wide range of IT services, including those related to healthcare systems. SAIC has been a significant player in the federal IT contracting space for decades, and their portfolio includes numerous contracts with the VA for system development, integration, maintenance, and support. Their experience likely encompasses work on various components of the VA's health IT infrastructure, potentially including or interfacing with systems like AHLTA and CHCS. Given their size and extensive experience, SAIC is generally considered a capable contractor for complex federal IT programs. However, as with any large contractor, performance can vary across individual contracts, and specific details regarding their performance on past VA healthcare IT contracts would require a deeper dive into contract performance reports and historical data.

What are the potential performance risks associated with supporting legacy systems like AHLTA and CHCS?

Supporting legacy systems like AHLTA and CHCS presents several inherent performance risks. One primary risk is the aging technology stack, which may rely on outdated programming languages, hardware, or operating systems that are difficult to maintain, secure, and integrate with modern systems. This can lead to increased vulnerability to cyber threats and compatibility issues. Another risk is the potential loss of institutional knowledge as experienced personnel who understand the intricacies of these legacy systems retire or move on. Furthermore, the complexity of these systems, often built over many years with numerous modifications, can make troubleshooting and implementing changes challenging and time-consuming. This can result in longer fix times, potential for introducing new bugs, and difficulties in scaling or adapting the systems to meet evolving healthcare needs, ultimately impacting the efficiency and effectiveness of healthcare delivery.

How does the number of bidders (4) in this full and open competition compare to typical IT support contracts of this scale?

Receiving four bids for a full and open competition IT support contract of this scale ($45.5 million over four years) is generally considered a moderate to good level of competition. For highly specialized or complex requirements, especially those involving critical national security or sensitive healthcare data, the number of capable bidders might be lower due to stringent qualification requirements or the niche nature of the technology. Conversely, for more commoditized IT services, one might expect a larger number of bidders. Four bidders suggest that the requirement was well-defined enough to attract multiple interested parties, but perhaps not so broad as to draw a vast array of competitors. This number typically provides sufficient competition to drive reasonable pricing and encourage a range of technical approaches, while also being manageable for the government's evaluation process.

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 › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: R3114484

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 12010 SUNSET HILLS RD, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $47,109,355

Exercised Options: $45,533,386

Current Obligation: $45,533,386

Subaward Activity

Number of Subawards: 88

Total Subaward Amount: $14,035,600

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q09BGD0048

IDV Type: GWAC

Timeline