ARC WORLDWIDE INC. awarded $199.8M contract for services, with significant duration and full and open competition

Contract Overview

Contract Amount: $199,815,616 ($199.8M)

Contractor: ARC Worldwide Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2001-09-28

End Date: 2010-09-17

Contract Duration: 3,276 days

Daily Burn Rate: $61.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Healthcare

Official Description: VERB - FRANKEL

Place of Performance

Location: ATLANTA, DEKALB County, GEORGIA, 30341, UNITED STATES OF AMERICA

State: Georgia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $199.8 million to ARC WORLDWIDE INC. for work described as: VERB - FRANKEL Key points: 1. Contract awarded through full and open competition, suggesting a robust market for these services. 2. The contract's long duration (3276 days) indicates a need for sustained service delivery. 3. The Cost Plus Fixed Fee (CPFF) pricing structure may present cost control challenges if not closely managed. 4. The contract was awarded to a single entity, ARC WORLDWIDE INC., highlighting their role in fulfilling this requirement. 5. The contract's performance period spans nearly a decade, from 2001 to 2010. 6. The contract was awarded by the Centers for Disease Control and Prevention (CDC), a key agency within HHS.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific service details and comparable contract data. The CPFF structure can lead to cost overruns if not meticulously monitored, potentially impacting value for money. However, the long duration and full and open competition suggest that the government likely sought competitive pricing initially. Further analysis would require understanding the specific services rendered and their market rates during the contract period.

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 offers. This typically leads to a wider range of proposals and potentially more competitive pricing. The fact that it was competed fully suggests that the government did not identify any specific limitations that would restrict participation.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation, leading to better value for public funds.

Public Impact

The Centers for Disease Control and Prevention (CDC) benefits from sustained services essential for its public health mission. Services delivered likely support critical public health initiatives and operational needs of the CDC. The contract's geographic scope is noted as Georgia (GA), suggesting a focus on services within that state. Workforce implications may include employment opportunities for individuals with specialized skills required by the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Fixed Fee (CPFF) contract type can incentivize the contractor to incur more costs to increase their fixed fee, potentially leading to higher overall expenditures if not managed stringently.
The extended duration of the contract (over 9 years) increases the risk of scope creep or evolving requirements that may not have been fully anticipated at the outset, potentially impacting cost-effectiveness over time.
Lack of specific details on performance metrics and deliverables makes it difficult to assess the contractor's performance and the overall effectiveness of the services provided.
The absence of small business subcontracting goals (sb: false) might limit opportunities for small businesses to participate in this contract's execution.

Positive Signals

The contract was awarded through full and open competition, indicating a competitive bidding process that likely secured a reasonable initial price.
The long contract duration suggests a stable and predictable need for the services, allowing for efficient planning and resource allocation by the contractor.
The award to a single entity implies a potentially streamlined management and delivery process for the government.
The contract's performance period is clearly defined, providing a framework for accountability and evaluation.

Sector Analysis

This contract falls within the broad category of government services, likely supporting administrative, operational, or specialized functions for the Centers for Disease Control and Prevention. The federal spending on such services is substantial across various agencies, with IT, healthcare support, and professional services being major components. Benchmarking requires comparing this contract's value and scope to similar service contracts awarded by HHS or other public health organizations.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false). Furthermore, the absence of specific subcontracting plans or goals suggests that small business participation may not have been a primary focus of this award. This could limit opportunities for small businesses to engage in subcontracting roles, potentially impacting the broader small business ecosystem involved in federal contracting.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Health and Human Services and the Centers for Disease Control and Prevention. Specific oversight mechanisms would likely include contract performance reviews, financial audits, and adherence to the terms and conditions of the Cost Plus Fixed Fee agreement. Transparency would depend on the agency's reporting practices and the public availability of contract performance data. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Public Health Services
Health Information Technology Services
Medical Research and Development Support
Government Administrative Support Services
Centers for Disease Control and Prevention Operations

Risk Flags

Potential for cost overruns due to CPFF structure
Risk of scope creep over the long contract duration
Potential for service obsolescence due to extended timeline
Limited visibility into specific performance metrics and outcomes

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $199.8 million to ARC WORLDWIDE INC.. VERB - FRANKEL

Who is the contractor on this award?

The obligated recipient is ARC WORLDWIDE INC..

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Disease Control and Prevention).

What is the total obligated amount?

The obligated amount is $199.8 million.

What is the period of performance?

Start: 2001-09-28. End: 2010-09-17.

What specific services were provided under this $199.8 million contract awarded to ARC WORLDWIDE INC. by the CDC?

The provided data does not specify the exact services rendered under this contract. However, given the awarding agency (Centers for Disease Control and Prevention - CDC), the services likely pertained to public health initiatives, research support, data management, administrative functions, or operational logistics crucial for the CDC's mission. The contract's duration of over 9 years (3276 days) suggests a need for ongoing, potentially complex services that required a long-term commitment. Without more detailed contract documentation (e.g., Statement of Work), the precise nature of the services remains unspecified.

How does the Cost Plus Fixed Fee (CPFF) pricing structure of this contract potentially impact its overall cost-effectiveness for taxpayers?

The Cost Plus Fixed Fee (CPFF) structure means the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fixed fee provides some cost certainty for the contractor's profit, the 'cost plus' component can incentivize the contractor to incur higher costs, as their profit is tied to the fee amount, not necessarily the efficiency of cost management. This structure requires robust government oversight to ensure costs are reasonable and allocable. For taxpayers, this means a higher risk of cost overruns compared to fixed-price contracts if the government's oversight is not diligent in controlling the 'cost' portion of the contract. The long duration of this contract amplifies this risk over time.

What does the 'full and open competition' designation imply about the bidding process and potential value for money achieved?

The 'full and open competition' designation signifies that the contract solicitation was made available to all responsible prospective contractors, and any responsible source could submit an offer. This is generally considered the most effective method for achieving best value for the government and taxpayers. It implies that the government actively sought a competitive marketplace, which typically drives down prices, encourages innovation, and ensures a wider pool of qualified bidders. The fact that this contract was awarded under such a competitive process suggests that the initial pricing and terms were likely the result of a robust market evaluation, although ongoing oversight is still crucial for sustained value.

Considering the contract's duration (3276 days), what are the primary risks associated with long-term service contracts like this one?

Long-term service contracts, such as this one spanning over nine years, present several inherent risks. Firstly, the risk of scope creep is significant; requirements can evolve over the contract's life, potentially leading to increased costs and deviations from the original intent if not managed carefully. Secondly, technology and market conditions can change dramatically over such a long period, potentially making the contracted services or solutions obsolete or less efficient than newer alternatives. Thirdly, maintaining consistent performance and contractor engagement over an extended duration can be challenging. Finally, the longer the contract, the greater the potential impact of any inefficiencies or cost overruns, making diligent oversight paramount throughout its lifecycle.

What is the significance of the contract being awarded to a single entity, ARC WORLDWIDE INC., despite full and open competition?

The award to a single entity, ARC WORLDWIDE INC., following full and open competition, suggests that this contractor was deemed the most advantageous offer based on the evaluation criteria set forth in the solicitation. This could be due to a combination of factors such as the best price, superior technical approach, extensive relevant experience, or a combination thereof. While full competition ensures a broad initial selection pool, the final award to one entity indicates that, in this instance, the government determined that consolidating the requirement with one provider offered the best overall value. It implies that ARC WORLDWIDE INC. successfully demonstrated its capability to meet the government's needs comprehensively.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 2001N00048

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 35 W. WACKER DR, CHICAGO, IL, 60601

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $4,199,841,144

Exercised Options: $4,199,841,144

Current Obligation: $199,815,616

Timeline